1.3 Defining the terms of a business model
While some of the terms used in the three models of business – the traditional product-oriented system, McKinsey’s value delivery system and the business model canvas – may be familiar or obvious to you, it may be useful to check on your understanding in Activity 1 before continuing.
Activity _unit4.2.1 Activity 1 Describing the business model canvas
First watch the short video which defines a number of terms and brings the business model canvas to life. Then match the definitions to the terms, which follow.
Two lists follow, match one item from the first with one item from the second. Each item can only be matched once. There are 9 items in each list.
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Value proposition
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Customer segments
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Key resources
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Key partners
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Customer relationships
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Key activities
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Cost structure
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Channels
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Revenue streams
Match each of the previous list items with an item from the following list:
a.The bundles of products and services that are designed to appeal to and provide value to different customer segments
b.How and through which activities you will capture value in your business
c.People or organisations with expertise or the ability to do essential things you rely upon but cannot do for yourself, cost effectively
d.Where costs arise in the business
e.What things you absolutely need to do very well
f.The groups of people with a distinct need or use for your products or services
g.The touchpoints – places or means of distributing your product or service
h.Defines how you will relate to your customers (e.g. loyalty schemes or discounts, rewards, recognition of greatest need etc.)
i.What assets (e.g. people, equipment, premises) are absolutely necessary to deliver value
- 1 = a,
- 2 = f,
- 3 = i,
- 4 = c,
- 5 = h,
- 6 = e,
- 7 = d,
- 8 = g,
- 9 = b
Hopefully you have found the models useful to prompt your thinking about some of the things you will need to plan and set up for your enterprise.
Next you will look at how your business model can help you to differentiate yourself from others to gain an advantage.