Business Model Canvass

The term business model refers to a company's plan for making a profit. It identifies the
products or services the business plans to sell, its identified target market and any
anticipated expenses (Kopp, 2020). Additionally, as defined in the presentation, business model
is a conceptual framework that describes how a company creates, delivers and extracts value
(Week 08, slide 3). Business models are said to be essential for entrepreneurs as it helps them
to value and scale their business. Aside from business models, another thing under the
business model canvas is a formal document that provides the background and financial
information about the company, outlines your goals for the business, and describes how you
intend to reach them is called a business plan (Week 08, slide 3).
Business Models are divided into four parts, first is the offering, associated with this is
the Customer Value Proposition (CVP), a statement which consists of what the business offers
and sells to the customers and how they’re going to communicate with the consumers. The next
part is the customers, it is simply the people or consumers targeted by the business and how
the business can maintain its relationship with the buyers. Third is, the infrastructure, this
includes all the business resources such as technology, products, suppliers, people, facilities,
cash, and etc.) that an entrepreneur must have to deliver the customer value proposition. Lastly,
financial viability is described as the revenue and cost structures needed by the business to be
able to tent to its operating expenses and financial obligations.
Business Model Canvas (BMC) is a type of visual plan that depicts the business on one
page by filling in nine blocks of a business model (Week 08, slide 6). Under the four-part of the
business model are the 9 blocks of BMC, CVP from the offering part, the second part involves
customer segments, channels, and customer relationships, rooted from infrastructure part are
key activities, key resources, and key partners, finally, financial viability includes cost structures
and revenue streams. CVP is designed to meet a customer need, customer segment answers
the question, “Who are your most important customers?”, channels are concerned with how the
value proposition is delivered and customer relationships is responsible for building a sense of
customer identity. Key activities are where the company participates to get the job done, key
resources are the resources needed to develop the business, create products and services, and
deliver CVP, and key partners are the suppliers, associates and distributors as examples, these
three keys are under the infrastructure. Revenue streams are generated if successful value of
proposition is delivered while cost structures are the expenses required to execute and run the
business model, concerned by the financial viability part.
Plan is a written description of the future you envision for your business, including what
you plan to do and how you plan to do it (Week 9, slide 2). A planning tool that identifies the
types of people needed for the team, resources available and needed, details of the idea, and
potential market for the product or service is called the TRIM (Team, Resources, Idea, Market)
Framework. Team is about who needs to be on the team, the role of each member and their
network. Resources are regarding to what you currently have to get started, the assets needed
to start, as well as your primary expenses. Idea relates to what is the clearest and most simple
description of the idea, how is it unique and differentiated and also the trends that supports the
idea. Lastly, market is about who your primary customers are, how you will reach them, and
their feedback.
There are seven types of plans used by entrepreneurs, the simplest of all is sketching
out the idea on the back of a napkin, this idea is named as Back of a Napkin. Sketching your
idea by hand on a blank paper or doing it electronically is the second type of plan, it is called
sketches on a page. Third is the business model canvas or the BMC as stated about, it is the
type of business plan that depicts the 9 blocks under the four parts of the business model. A
business brief, the fourth type of plan is a 2 to 3-page document outlining the company
overview, value proposition, customer and milestones, it is less visual than the two previous
types of plans. Fifth, feasibility study, created to assess the viability of a business concept. Next
is the pitch deck also known as the launch plan, a short presentation highlighting many of the
essential elements found in a feasibility study and a business plan. Lastly, the business plan,
supports the business model by outlining the steps necessary to attain the necessary goals
(Week 9, slide 11).
There are 10 types of revenue model, a revenue model explains how entrepreneurs will
make money and capture value from delivering on the customer value proposition. Unit Sales
Revenue Model, Advertising Revenue Model, Data Revenue Model, Intermediation Revenue
Model, Licensing Revenue Model, Franchising Revenue Model, Subscription Revenue Model,
Professional Revenue Model, Utility and Usage Revenue Model, and Freemium Revenue Model
are the types of Revenue Models. Further, there are four revenue drivers, these are: customer,
frequency, selling process and the price.
Finally, there are 11 types of Pricing Strategies, Competition-Led pricing, Customer-Led
pricing, Loss leader, Introductory Offer, Skimming, Psychological Pricing, Fair Pricing, Bundled
Pricing, Cost-Led Pricing, Target-Return Pricing, and the Value-Based Pricing.
Overall, from the weeks 8 and 9, I’ve learned how to create an effective business plan
and the factors to consider in order to start a business with a high probability to succeed. I’ve
learned that plans are important as it is a great tool to help us achieve our every goal. Business
plans, models, and pricing strategies are instruments that is essential to entrepreneurs or
aspiring entrepreneurs if we want proceed to success.