9 QUADRANTS [OR BUILDING BLOCKS] OF THE BUSINESS MODEL CANVAS EXAMPLE Amazon’s Business Model Canvas Logistics Partner Affiliates Authors and Publishers Network of sellers
Merchandising
Convenience
Production and Design
Physical warehouses
Automated Service
Instant fulfillment with eReader
Affiliates
Vast selection
Application interfaces
Low Cost structure IT and fulfillment infrastructure
Economies of Scale
Customers: Who will buy your products or services?
2
Customer Relationships: What kind of relationships do you want to have with your customers? a. Personal assistance b. Automated c. Self service, etc.
3
Value Proposition: What distinguishes your product or service vs. the competition and provides value to your customers by providing a solution to their pain points?
4
Channels: Which touchpoints are you interacting with customers to deliver value? a. Website b. Retail store c. Partner owned website, etc.
5
Key Partners: Since you will not be able to do everything yourself, who will you need to have perform key activities that will provide value to your customers?
6
Key Resources: These are the key assets needed to make your business model work: a. Physical b. Financial c. Intellectual d. Human
7
Key Activities: What will your company need to do to fulfill your businesses purpose (e.g. make money)? a. R&D b. Production c. Inventory control d. Advertising, etc.
8
Cost Structure: All the costs incurred to operate your business model a. Salaries b. Advertising and marketing c. Website development and maintenance
9
Revenue Streams: All the various ways your company will make money—you should have more than one revenue stream.
Self service
Price
Human: Web application & development
1
Individual Leverage Group Leverage Global consumer market
Amazon.com
Sale of Assets
E books and content
Commission on reseller sales
Acquisition and Investment
Prime monthly subscriptions fees
Leslie Fleuranges, is the former director of Upstream Innovation and New Products at Hill’s Pet Nutrition where she led a marketing team that developed and expanded new products in the wellness and therapeutic segments of the pet food business.
Photo by STEPHEN SMITH
I have used both the Value Proposition Design and the Business Model Canvas to develop a new business venture that is scheduled to open before the end of the year. In the process, I held a workshop with former colleagues, friends and local Topeka business leaders to help me define my company model. I successfully used this process at the Hill’s Pet Nutrition Company as the Director of Upstream (Long Term) Innovation. I looked at trends and market disruptions to develop strategies for new cat and dog food product innovations. Once a developmental area was determined, I immediately identified prospective customers and pain points which led to innovative product solutions to address their problems. To summarize, make sure your idea is unique vs. others, will be widely embraced by your customer and who will be willing to pay the price you intend to charge. TK
FALL 2018
TK Business Magazine
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