Business Models

Knowledge Transfer | Accelerating Innovation V. Nilsen

Business model is a buzzword that everybody
used (or overused) during the dotcom boom.

In fact, poorly thought out business models were

the downfall of many dotcoms.

However, the business model dates back to the

earliest days of business; it merely describes the
way in which a company makes money.

www.investopedia.com

Knowledge Transfer | Accelerating Innovation V. Nilsen

Knowledge Transfer | Accelerating Innovation V. Nilsen
Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Key Resources Channels

Cost Structures Revenue Streams

Source: Business Model Generation, A. Osterwalder

Knowledge Transfer | Accelerating Innovation V. Nilsen

Value Proposition
What distinguish your business from the competitor?
What is the value you provide the customer?
• Newness
• Performance
• Customization
• "getting the job done”
• Design
• Brand/status
• Price
• Risk reduction
• Convenience/usability

Knowledge Transfer | Accelerating Innovation V. Nilsen

Value Proposition

Knowledge Transfer | Accelerating Innovation V. Nilsen

Customer Segments
Who are your main customers?
• Mass Market
• Niche
• Segments
• Multi-Sided

Knowledge Transfer | Accelerating Innovation V. Nilsen

Channels
How do you distribute the value proposition to
your customers?
• Online
• Retail Stores
• Partners
• App

Knowledge Transfer | Accelerating Innovation V. Nilsen

Customer Relationship
What is the relationship the business have with
its customers?
• Personal Assistance
• Dedicated Personal
Assistance
• Self Service
• Automated Services
• Communities
• Co-creation

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Activities
The most important activities in executing a
company's value proposition

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Resources
The resources that are necessary to create
value for the customer
• Human
• Financial
• Physical
• Intellectual

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partners
Which partners are necessary for making the
business work?

Knowledge Transfer | Accelerating Innovation V. Nilsen

Revenue Stream
How the company makes income
• Selling a product
• Usage Fee
• Subscription
• Renting/Leasing
• Licensing
• Brokerage Fees
• Advertising

Knowledge Transfer | Accelerating Innovation V. Nilsen

Cost Structure
What are the cost associated with running the
business and how does it scale with sales
• Fixed Costs
• Variable Costs
• Economies of Scale
• Economies of Scope

• Cost-Driven vs. Value-Driven

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Key Resources Channels

Cost Structures Revenue Streams

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Key Resources Channels

Cost Structures Revenue Streams

Knowledge Transfer | Accelerating Innovation V. Nilsen

Knowledge Transfer | Accelerating Innovation V. Nilsen
Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Content
Easy Online
Providers
access to
Content content People who
owners binge watch
when you tv shows
Key Resources want it Channels

Distribution Digital
platform platform

Cost Structures Revenue Streams

Royalties Salaries Bandwidth Subscription

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Payment Platform Cheap way Online

maintenance community
providers of getting
Customer
an unique Phone
Travel travel Travelers
support support
networks experience
Key Resources Channels

Platform Home
Rent out owners
your extra
space Online
Brand

Cost Structures Revenue Streams

Platform
Insurance % Fee
costs

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships
Marketing
People
Platform Online living/workin
development support g abroad
Exchange
Payment money from
Support
providers one currency
to another at Frequent
Key Resources Channels users of
better rates
exchange
Brand services

Trust Web platform

Platform

Cost Structures Revenue Streams

Platform % Fee
development
Support Insurances

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships
Maintaining
platform Online
Publishers Online and
Logistics Platform
phone
support
Price Mass
Suppliers and Marketing
manufacturers market
Key Resources Channels
Selection
Network of Warehouses
sellers Brand
Convenience/
Amazon.com
Platform Speed

Cost Structures Revenue Streams

Commission
Platform, Logistics, Marketing, Sales Subscription
on sales
Physical Storage,

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships
Platform
development and Connect with Online Internet Users
maintenance friends, share
content …
Advertising sales
Content and analytics
Advertisers and
Providers Reach a specific marketers
target group with
Key Resources your advertising
Channels

Users
Small businesses
Facebook adds,
Brand Facebook pages

Platform

Cost Structures Revenue Streams

Bandwidth Sales

Add Revenue
Platform

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships
Production
Communities
Logistics Price Individuals
Self-service
Suppliers Sales Simplicity
Key Resources Channels
Convenience
Appliance Brand Businesses
producers IKEA
Customization
Physical
Resources Web sales

Cost Structures Revenue Streams

Marketing Product
Production
and sales sales

Knowledge Transfer | Accelerating Innovation V. Nilsen

Basic Models
• Brokerage • Pay as you go
• Bundling • Razor/blades
• Crowdsourcing • Product to service
• Disintermediation • Standardization
• Freemium • Subscription
• Leasing • Negative operating
• Low-touch cycle

Knowledge Transfer | Accelerating Innovation V. Nilsen

Knowledge Transfer | Accelerating Innovation V. Nilsen
Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships
Clean Shave
Marketing Built-in
R&D Simple “lock-in”
Logistics

Manufacturers People who

Retailers shave
Key Resources Channels
Razor Handle

Brand Retail
Patents Blades

Cost Structures Revenue Streams

Razor Handle
Marketing
Manufacturing
Logistics, R&D Blades

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Key Resources Channels

Cost Structures Revenue Streams

Knowledge Transfer | Accelerating Innovation V. Nilsen

Knowledge Transfer | Accelerating Innovation V. Nilsen
 Building your own
business models

Knowledge Transfer | Accelerating Innovation V. Nilsen

Key Partnership Key Activities Value Propositions Customer Customer Segments
Relationships

Key Resources Channels

Cost Structures Revenue Streams

Knowledge Transfer | Accelerating Innovation V. Nilsen

Source / Learn more

Knowledge Transfer | Accelerating Innovation V. Nilsen