Scribd Logo
Upload

Welcome to Scribd!

  • 582 views

    Business Plan by Raj Sankar

    Uploaded by

    Senthilkumaran Piramanayagam
    The document discusses business models and their importance. It defines a business model as the core logic of how a business creates and captures value. An effective business model clearly outlines the value proposition, resources, activities, customer segments, distribution channels, and cost and revenue streams. Developing a strong business model is important before creating a business plan as it provides a practical framework for how the business will operate and be profitable. The document also presents several common business model types such as razor/razorblade models and reviews the key components of an effective business model.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Business Plan by Raj Sankar

    Uploaded by

    Senthilkumaran Piramanayagam
    582 views22 pages
    The document discusses business models and their importance. It defines a business model as the core logic of how a business creates and captures value. An effective business model clearly outlines the value proposition, resources, activities, customer segments, distribution channels, and cost and revenue streams. Developing a strong business model is important before creating a business plan as it provides a practical framework for how the business will operate and be profitable. The document also presents several common business model types such as razor/razorblade models and reviews the key components of an effective business model.

    Original Description:

    Raj Sankars' Business Plan Model from the book Entrepreneurship: Theory and Practice

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses business models and their importance. It defines a business model as the core logic of how a business creates and captures value. An effective business model clearly outlines the value proposition, resources, activities, customer segments, distribution channels, and cost and revenue streams. Developing a strong business model is important before creating a business plan as it provides a practical framework for how the business will operate and be profitable. The document also presents several common business model types such as razor/razorblade models and reviews the key components of an effective business model.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    582 views22 pages

    Business Plan by Raj Sankar

    Uploaded by

    Senthilkumaran Piramanayagam
    The document discusses business models and their importance. It defines a business model as the core logic of how a business creates and captures value. An effective business model clearly outlines the value proposition, resources, activities, customer segments, distribution channels, and cost and revenue streams. Developing a strong business model is important before creating a business plan as it provides a practical framework for how the business will operate and be profitable. The document also presents several common business model types such as razor/razorblade models and reviews the key components of an effective business model.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 22

    Business Model

    Raj Shankar
    ichiban Group

    Purpose of A Business

    The main purpose of a business is to create value

    Purpose of A Business

    The main purpose of a business is to create value

    What is a Business Model?


    A Business Model is a link between social domain where economic rents
    are generated and creative domain where products and services are
    conceptualized- Craig S. Fisher and Babette E. Bensoussan
    A Business Model is a core logic of value creation
    Details how the business will make money

    Business Model & Business Plan- Key Differences


    Business Model

    Business Plan

    Ascertains how a business


    works in reality

    Provides a section wise


    details of your business

    Creates an opportunity map


    for your business idea

    The business plan is drawn


    up based on your business
    model

    It gives different shapes to


    a single business idea and
    more practical in terms

    It is more literary in terms


    and does not reflect the
    practical shape that a
    business would take in
    reality

    Why should we model before the plan?


    Profitability is designed from the inside of the business

    Most industries are moving from single dominant models


    to multiple models

    Allows clear visualization of Cost and Price Equilibrium


    Studies the economics of business and viability of the
    business
    6

    Functions of a Business Model


    Value Creation
    Enterprise exist because they create value
    Success of the enterprise is predicated on how many consider the
    value generated useful
    Customers are willing to pay a price based on how important they
    consider this value

    Value Capture
    How much of earnings that the enterprise can retain to carry on and
    deliver this value?
    What are the broad margins that an enterprise can earn through
    conducting the business?
    7

    Ubiquitous Business Model

    The Barter System


    Exchange of goods between two people is one of the old models

    The Kirana Stores


    They have certain credit cycles built into products

    The Razor Blade Model (Gillette)

    The Reverse Razor Blade Model (i-Tunes)

    Business Model Double Ellipse

    Double Elipse
    The product needs to be made available to the customer for purchase

    Value Creation :Businesses exist only when they create value


    Distribution
    Activities
    Resources : Businesses
    will use resources to create this value that the customers find useful
    Channels

    Customer

    PRICE
    ELLIPSE

    Value
    Proposition

    COST
    ELLIPSE

    Resources

    Communication
    Management
    TheCustomer
    value that: the
    business
    offers
    needs
    to
    be
    communicated
    Businesses
    need someone to feel the usefulnesstoofthethecustomer
    value
    Channels
    To
    activities
    one wouldhas
    need
    level
    of management
    Tocoordinate
    deliver thethe
    value
    the organization
    to appropriate
    execute some
    activities
    resources and controls
    10

    Business Influencer
    Industry
    Distribution
    Channels

    Customer

    Price
    Ellipse

    Activity

    Value
    Proposition

    Communication
    Channels

    Cost
    Ellipse

    Resources

    Management

    Competition
    11

    Attributes

    Customer
    Value Proposition
    Resources
    Communication channels
    Distribution channels
    Activity
    Management

    Influencers

    Industry
    Competition

    12

    Value Proposition
    Value proposition is defining the value being created and
    delivered to the customer

    From customers perspective


    What will it help the customer achieve
    Should be narrow
    Should identify with one of the three value discipline

    13

    Customer
    Defining the beneficiary of the value

    Understanding User / Sponsor and Influencer


    Characteristics of ideal customer
    Typical buying cycle
    Customer Volumes

    14

    Communication Channels
    Communication channels are used to inform the
    customer about the proposed value that is being
    delivered by the service or the product so that they can
    make a well informed purchase
    Points of aggregation
    Cost of communication
    Level of customer maturity

    15

    Distribution Channels
    Distribution channel should consider how the product or
    service can be delivered:
    Number of levels
    Need for partners
    Supply chain costs

    16

    Resources
    These are the resources needed for delivering the value

    Nature of resource (man / material / ip / infrastructure etc)


    Partners
    Is the resource differentiated?
    Resource criticality
    Access / Owned / Leased

    17

    Activity
    To create value the resources have to be involved in
    executing certain activities
    Functional Activities ( S&M / HR / Accounts etc)
    Operational Activities (Manufacturing / Customer relationship
    management / purchase / infrastructure management etc)
    Strategic Activities ( Outsourcing / Partnering etc)

    18

    Management
    Management means positions, designation, utilisation of
    resources to deliver value, overseeing of activities,
    involvement in activities, etc
    Structure
    Over heads
    Board / Advisory

    19

    Business Model- Interpretation


    Business design is a constant state of stretching and
    skewing between the two ellipses - the price ellipse and
    the cost ellipse

    20

    Benefits of a Business Model


    Articulate the
    value
    proposition
    in a clear
    manner
    Formulate
    a good
    competitiv
    e strategy

    Identify the
    market
    segments
    profitable to
    operate

    Business
    Model
    Position
    the firm
    within the
    overall
    ecosystem

    Structure
    the value
    chain
    Estimate
    the cost
    structure,
    revenue
    and profit
    models

    21

    Thank You..

    Key Source: Entrepreneurship Theory and Practice, Raj


    Shankar
    For all your queries and suggestions,
    Please contact: [email protected]

    22

    You might also like