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Business model: How to write a business model?

Description of elements

It is the best solution to complete the model in accordance to an agreed order (however, if you cannot fill any given field, you may move on and return to it later):

1. Customers

Each organization serves a certain group of customers. These may be individual customers and enterprises, those that the company benefits from and those, for which the services are provided for free, representatives of niche or mass markets, etc. Before taking any action, an organization should identify the type of customers that it wants to present its offer to. This will influence the values, distribution channels and relationships determined later.

Here, you need to answer a question about who the most important customers are, and who the created value should reach.

2. Value

The value offer (or the offered value) is a reason, why a customer chooses an offer of a given company and not of its competition. In other words, it is a benefit that a customer obtains while choosing this offer. A value offer can be of innovative character, but it does not need to be so.

An offer may e.g. fulfill a new type of customers’ needs, be adjusted to their specific expectations, distinguish with a low price, quality, be more available, provide a person, who chooses it with prestige, etc.

In this field, you specify the customers’ needs that will be fulfilled thanks to your product, what problem you are helping them to solve, and why it is important for them.

3. Channels

These are the manners of communication between the company and the customers. Here, you need to specify how and when the contact with a customer will be established. The channels not only enable to purchase the product, but also to find information about it, to produce one’s own opinion, or to obtain support after the purchase. These may be of indirect (e.g. partnership) or direct character (e.g. a salesman in a company’s headquarters).

It is worth to think about the channels that will be the most effective and beneficial, how the performed actions can be interconnected to make them compliant.

4. Relationships with customers

You need to specify the type of relationships between the company and its customers (e.g. is there is personal or automated support), and what is the purpose of its establishment, whether it is about winning new customers or maintaining the existing ones and encouraging them to spend more money. The type of relationship may also change in relation to the group of customers. You need to take into account the cost of maintaining a specific relationship.

5. Income

The company should point how much the customers will pay for a specific value, and how this payment needs to be performed. The income may be divided most generally into: this obtained one time from a customer (e.g. sales of a car) and this obtained periodically (e.g. car service). The income is obtained from e.g. sales, rent, agency, license charge. You need to think about how the customers would want to pay, for what and how much they can pay.

6. Key resources

Here, you will specify key resources, which will be applied so the undertaking can be successful, e.g. qualified specialists, finances, buildings, etc. They need to be considered in relation to offer of value, distribution channels, relationships with customers, sources of income.

7. Key actions

These are the most significant actions that a company needs to take so the business model is effective and the company may operate. They may be divided into categories, e.g. production, sales, service, problems solving.

8. Key partners

It is a network of suppliers, coworkers, thanks to cooperation with whom the company obtains additional benefits. You need to identify main partners of the company, and to thinks about which key resources may be obtained from them and which key actions they could perform.

9. Costs

Costs may be estimated on the basis of the defined key resources, actions and partners. They encompass all expenses, which will be incurred in accordance with realization of the business model.



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