Business model/Modelo de negocios

Business Model

Presentado por:Marcus A. Sullivan, MBA, CVA

Sullivan Consulting, Inc

What is a Business Model ?

© 2013 Sullivan Consulting, Inc.

> Defines exactly what the company does and how it makes money.

> Reflects the company’s plan about what customers need and want and how much are they willing and able to pay.

> Identifies and targets market segments.

> Presents how the company engages and reaches out to potential clients.

> Finds key resources, activities and partners.

> It is part of the strategy and represents the core business functions.

Why have a Business Model ?

© 2013 Sullivan Consulting, Inc.

> Serves as a platform to execute business strategies in an integrated, cost-effective and orchestrated way.

> Integrates strategy, operations and finance.

> Helps entrepreneurs optimize the way a business operates and how it adds value.

> Demonstrates how a company generates revenues, manages costs and turns sales into profits.

> Connects the value proposition with the action plan.

How to Create a Business Model?

© 2013 Sullivan Consulting, Inc.

> A business model can be created by answering the following questions:

> What is the value proposition? Why should customers buy from us? What pains are we solving?

> Who are our customers? What are their needs?

> What is the best method to reach and maintain strong relationships with our customers, will it be cost effective?

> What key resources and activities will be required to sustain our value proposition?

> What are the expected revenues, costs and profits?

Building a Business Model

© 2013 Sullivan Consulting, Inc.

The Canvas business model is the most commonly used method. It is composed of 9 key building blocks:

> Value Proposition

> Customer Segments

> Customer Relationships> Distribution Channels> Revenue Streams> Cost Structures> Key Activities> Key Resources> Strategic Partners

© 2013 Sullivan Consulting, Inc.

Key Partners

ChannelsKey Resources

CustomerRelationships

Value Proposition

Key Activities

Cost Structure

Revenue Streams

CustomerSegments

ManufacturersSuppliersWholesalersSales repVendors

PresentationsMeetingsPhone CallsEmailsRecruitingAcquisitions

EmployeesInvestorsAccountantsBanksSuppliers

PriceServiceBrand StatusCustomizationInnovationAccessibilityUsability

Personalized Service

Self-Service

CustomizedService

AutomatedService

InternetAdvertisingCollaboratorsSocial Media

HospitalsGovernmentPYMESNot-for-profit

Fixed CostsOverhead CostsVariable CostsDirect/Indirect Costs

CommissionsContractsSales

Business Model Canvas

© 2013 Sullivan Consulting, Inc.

Key Partners

ChannelsKey Resources

CustomerRelationships

Value Proposition

Key Activities

Cost Structure

Revenue Streams

CustomerSegments

ManufacturersSuppliersWholesalersSales repVendors

TrainingMeetingsPhone CallsEmailsRecruitingAcquisitions

InvestorsAccountantsBanksSuppliers

PriceServiceBrand StatusCustomizationInnovationAccessibilityUsability

Personalized Service

Self-Service

CustomizedService

AutomatedService

InternetAdvertisingTelevisionSocial Networks

HospitalsGovernmentLogisticiansIT Companies

Fixed CostsOverhead CostsComputer SoftwareAdvertising

CommissionsContractsSales

How? Who?

What?

$$$

Business Model Canvas

> What value do we offer our customers?

> Price> Service> Quality> Branding> Customization> Innovation

> How does our value proposition stand out from competitors, is it hard to imitate?

> Are customers satisfied with the product/service, is it meeting expectations?

> How can we tailor the product/service to meet our customer’s needs?

© 2013 Sullivan Consulting, Inc.

Value Proposition

> Differentiation from competitors is crucial to build and maintain a competitive position

> Business models are useless if they are easy to copy by competitors and the customer does not recognize the value proposition

> A differentiation strategy protects a company’s future and growth opportunities

> Value differentiation strategy involves all of the variables that affect the how, what and who in the business model

© 2013 Sullivan Consulting, Inc.

Differentiation in Value Proposition

> Who are our customers?> Business > Consumer> Government> Not-for profit> Academic

> What are their needs, demands and behavior as consumers?

> What motivates them to buy?

> How much are they willing to spend?

> What alternatives do they have?© 2013 Sullivan Consulting, Inc.

Customer Segment

> What relationships with customers will achieve the highest perceived value?

> Personalized service> Fast service> High-quality service> Automated service> Innovative service

> What type of relationships do customers expect to have?

> What type of relationships better fit our customers needs as well as our business model?

© 2013 Sullivan Consulting, Inc.

Customer Relationships

> What channels can we use to better reach our customers?> Internet> Direct> Brokers> Social Media

> How can we make our product/services more accessible to customers?

> What channels are the most effective?

> Which is the most efficient way?

© 2013 Sullivan Consulting, Inc.

Distribution Channels

© 2013 Sullivan Consulting, Inc.

Value Proposition

Value TheCustomer

Valu

e

Valu

e

valu

e

Customer Relationships

(Trust and loyalty)

DistributionChannels

(access and fast response)

TargetMarket (highly

specialized)

How can we Generate Value?

> What key resources are involved in the value proposition?

> Company assets (equipment, machinery)> Intellectual (technology, R&D)> Human (employees, advisors, investors)> Financial (capital)

> What resources are critical to sustain the value proposition?

> How can we improve performance?

> What additional resources do we need to add value? Are these justifiable (ROI)?

© 2013 Sullivan Consulting, Inc.

Key Resources

> What activities sustain our value proposition?> Management> Operations> Sales and marketing> Training> Innovation (technology, R&D)

> How efficient are the activities, can we eliminate, reduce or add new activities?

> What activities differentiate us from our competitors?

> How can we improve activities to deliver more value to our customers?

© 2013 Sullivan Consulting, Inc.

Key Activities

> Who are our partners and collaborators ?

> Advisors and consultants> Investors> Suppliers> Distributors> Advertising agencies

> What key activities, services and resources do our key partners provide us with?

> Which partnerships and strategic alliances can be established and add the most value?

> Can we leverage on key partners to improve our competitive positioning?

© 2013 Sullivan Consulting, Inc.

Key Partners

> How are we generating revenue?

> Direct sales transactions> Brokerage fees > Licensing fees > Franchising fees> Freemium

> How much are customers willing to pay?

> How sustainable and profitable are we?

> How are competitors generating revenues?

> How do they prefer to pay?

© 2013 Sullivan Consulting, Inc.

Revenue Streams

> What cost are involved in delivering value to customers?> Fixed cost> COGS> Operating costs> Financing> Commissions

> What activities/resources are the most expensive and can they be reduced?

> How competitive are we? How are costs compared to our competitors’?

© 2013 Sullivan Consulting, Inc.

Cost Structure

© 2013 Sullivan Consulting, Inc.

Usability - to create a revenue model by using targeted adds that don’t interfere with the web-search experience.

Innovation - developed the world’s largest search engine using keywords and links arranging information to users based on degree of relevance.

Accessibility - provides users with free internet applications and tools such as, Google Earth, Maps, Books, Gmail Google Chrome and Desktop Search.

Value through Differentiation

© 2013 Sullivan Consulting, Inc.

Price – focus on a low-price model Cost reduction – create value using

a reduced cost structure. Accessibility – high performance

and punctuality to maximize flight rotation

Usability – crowded airplanes to increase profitability

Design – simple, versatile, clean, interactive easy to use, and fun

Innovation – Mac OS and software’s, Mac laptops, IPod, IPhone, tablets, App Store, ITunes

Brand/status – managed to stay on top of current trends

Value through Differentiation

© 2013 Sullivan Consulting, Inc.

Customize Service – name your own price option for customers providing them trade-off opportunities

Self Service – internet based travel booking agency

Optimizing Channels – puts mayor travel suppliers in contact with customers

Self Service – e-commerce, Internet, fulfillment and logistics platform

Optimizing Channels – direct to customer online model offering over 40 categories of merchandise

Value through Differentiation

© 2013 Sullivan Consulting, Inc.

Accessibility – positioned strategically with great variety

Low-cost model – cut down on company costs to deliver competitive low prices

Accessibility – free social media interactive platform

Customization – able to create your own personal profile

Usability – excellent advertising and marketing tool for business owners and entrepreneurs

Value through Differentiation

© 2013 Sullivan Consulting, Inc.

Canvas Business Model

> A business model is an essential tool that defines how a company delivers value to its customers and generates profits

> The business model canvas is a useful method which helps understand , create and manage a sustainable business model

> Value differentiation is an important factor to give your model a competitive edge

> All segments in the business model must interrelate in order to generate value to its customers

© 2013 Sullivan Consulting, Inc.

Summary

Marcus A. Sullivan, MBA, CVASullivan Consulting, Inc.

Centro Internacional de MercadeoTorre II, Suite 402

Guaynabo, PR 00968787.708.6800

www.sullivanconsultingpr.com

© 2013 Sullivan Consulting, Inc.