10 Entrepreneurial Business Models

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By- Dr. Vanita Joshi SOM, SIMS

Introduction-Business Model
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A business model describes the rationale of how an organization creates, delivers, and captures value. On the other hand, a business plan is how you execute the business model. If the business model does not work, the business is unlikely to do well.

The Four-Box Business Model

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Customer Value Proposition

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The overall value of a CVP depends on these three key metrics:

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How important the job or the problem is to the customer How satisfied are the customers with the current solutions What is the relative advantage of the new offering, compared to the previous offerings

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3.

Nike id
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Profit Formula
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Revenue model Cost structure Target unit margin Resource velocity

Key Resources
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People Technology Raw materials Equipment Information Channels Partnerships and alliances Funds Licenses or permits

Key Processes
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Processes Business rules and success metrics Behavioural norms

Osterwalders Business Model Canvas

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How canvas differs from 4-box

Introduction of Strategic partnerships Splitting customers into: Customer segments Customer relationships Channels Costs and revenues are in different components
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Types of Business Models Currently Employed

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Niche
Compatibility of niche needs and product features Size of niche Willingness to pay accessibility
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Perfint
Vision:
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Become a respected emerging player in providing 'Niche Imaging Solutions' that help address Clinical Productivity needs

Long Tail
Make everything available Have a low price Help find products
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Flipkart
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Founded by Sachin and Binny Bansal in October 2007 Both had worked for Amazon Growth: 4 cr (2009) 20 cr (2010) 75 cr (2011)

Mass Customisation
Combines the low unit costs of mass production processes with the flexibility of individual customization Modularize products Delay assembly Use configurators to capture customer preferences Assemble and deliver
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Myantra.com
Started by Mukesh Bansal and Sankar Bora in 2006 Started as a site for personalised products Now into sales of branded clothing One of the top 10 e-commerce sites in India
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Freemium
Feature limited Time Limited Capacity limited Seat limited Customer Class Limited
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Zoho
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Based in Chennai

Unbundling
Breakup a product into independent components Strip away add-ons Sell components as a complete product Up sell add-ons Increase in prices is possible
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Zoho
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Zoho Assist Zoho Business Zoho Books Zoho Calendar Zoho Challenge Zoho Chat Zoho Creator Zoho CRM Zoho Discussions Zoho Docs Zoho Gadgets Zoho Wiki

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16. 17. 18. 19.

Zoho Viewer Zoho Meeting Zoho Mobile Zoho Notebook

20. Zoho People 21.

Zoho Personal

22. Zoho Planner 23. Zoho Polls 24. Zoho Projects 25.

Zoho Recruit

26. Zoho Reports 27.

Zoho Search

28. Zoho Share 29. Zoho Sheet 30. Zoho Show 31.

Zoho Support

Bundling
There are economies of scale in production, There are economies of scope in distribution, Marginal costs of bundling are low Production set-up costs are high, Customer acquisition costs are high. Consumers appreciate the resulting simplification
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Yusuf Motiwalas Tringme

Enterprise wide telephony and messaging solutions Mobile VOIP Audio conferencing IVR & Voice PHP Pricing encourages purchase of bundled solutions Tringme now has client like IBM, Facebook, AOL, etc.
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No Frills
Low prices are driven by low costs Rarely will small firms have lower costs than large firms Decrease costs by removing frills which are costly but are not valued much by customers
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No Frills-Nano & Air Deccan

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Premium
Premium Uber Premium Mass Class
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Vardenchi
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Charges a premium of about two lakhs over the Click to edit price of a Royal Enfield Master text styles
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Open Business Models

Open source software Crowd sourcing Crowdfunding Crowdcreation Crowdvoting Crowd wisdom
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Advantage of using a Crowd sourcing model 29

Problems can be explored at comparatively little cost, and often very quickly Payment is by results or even omitted The entrepreneur can tap a wider range of talent Entrepreneurs gain first-hand insight on their customers' desires The community may feel a brand-building kinship with the entrepreneur
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I Am
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400 people financed the movie by Onir Dhar

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Multi Sided Platforms

The entrepreneur acts like a go-between To be effective, a sufficiently large pool is needed on both sides. A strong value proposition needs to be crafted for both sides Usually there are high network effects
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Redbus
Turnover of 150 crores
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Walked into a space other had failed in Success after they realised that bus operators were customers too

Social Enterprises
Working on business-minded solutions to social problems Vijay Mahajan Single goal optimization is a 20th century anacronism
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Social Enterprises
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Business Model Innovation

There are five strategic circumstances that often need a change in business model: The opportunity to address the needs of a group of customers who have been

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