1. Prepared by: Avinash Ramsubhag
BUSINESS MODEL
Prepared by: Avinash Ramsubhag

2. DEFINITION
The rationale of how an organization creates, delivers and captures value. (Osterwalder and Pigneur, 2010)

3. COMPONENTS OF A BUSINESS MODEL
Value Proposition – The benefit the firm intends to deliver
Beneficiary – Who is your target market
Operations – The structure or systems within which the firm can be a source of strength or weakness
Product Differentiation – Finding a way to stand out from competitors
Income Generation – How do you intend to make money
Growth Model – medium and long term prospects

4. VALUE PROPOSITION
The Product Offering - The actual good or service (or combination) that will be sold
Standardized or Customized – Is it one set product or can you customize to the needs of the customer
Distribution – Are you using direct or indirect distribution channels
Make or Buy – Would you make the product yourself or buy and resell

5. BENEFICIARY
What type of relationship is it? – Business to Business (B2B), Business to Customer (B2C), Business to Government (B2G) or a combination?
Geographical Scope – Local, regional or international?
Market – General or Niche?

6. OPERATIONS
Organizational Structure / Culture – does your structure or culture facilitate the kind of product you would like to produce
Skills – There may be unique skills or experiences amongst the owner or staff that give them an advantage
Technology – the firm may have efficient or up to date technology
Intellectual Property – there may be intellectual property rights that may give the firm a competitive advantage
Resources – The can be other resources that the firm may acquire that may give them a competitive advantage such as their location, brand manager or agent etc

7. PRODUCT DIFFERENTIATION
Operational Excellence – The way the firm works and its ability to deliver a superior customer experience
Product Quality – Delivering a better product that customers value
Innovative Leadership – The organizations prides itself on their ability to be innovative and creative
Cost – Being efficient and keeping costs down
Networks – Differentiate through the use of collaborative networks

8. INCOME GENERATION
Operating Leverage – How best to use the finance that is available to manage cash and protect profits
Volume and Margins – Are you aiming for high volume and lower margins or low volume with higher margins
Pricing – What pricing strategy are you using? Cost plus, competitor based, price discrimination, fixed pricing, variable pricing, market skimming, market penetration etc.
Revenue Sources – How exactly will you be generation revenue. Is there one source or multiple sources?

9. GROWTH MODELS
Subsistence Model (Survival) – Enters into entrepreneurship strictly for the purpose of survival
Income Model (Lifestyle) – Focus is on enjoying a specific lifestyle.
Growth Model – focus is on a long-term vision for the growth of the business. Short-term milestones are set in order to achieve these long-term goals
Speculative Model – The entrepreneur does not necessarily have a long term plan. A contingency based approach for exploiting an attractive opportunity

10. BUSINESS MODEL CANVAS

11. SAMPLE FACEBOOK BUSINESS MODEL CANVAS

12. GOOGLE SAMPLE BUSINESS MODEL CANVAS

13. SKYPE SAMPLE BUSINESS MODEL CANVAS

14. ACTIVITY
In groups of 5, choose a company that you know and prepare a business model canvas for it.

15. THE END