The Business Model tool

Cristina Boari- BS 2021-22

 Our questions :
● How can we describe and classify a firm and its
business?
● How can we help managers and entrepreneurs to
create, manage and innovate ?
● How can we present a firm for investigation?

Cristina Boari- BS 2021-22

 The business model
• A tool that spread very
quickly
• Other tools in the past:
• Business idea-Norman
• Business definition-Abel
• Different structures of
Business model
available
• Can be used to think,
design and test
• Business model versus
strategy

Cristina Boari- BS 2021-22

 Business model (Osterwalder, Pigneur, 2010)

Cristina Boari- BS 2021-22

 Customer segments
We create value for:
● Mass market ?
● Niche market ?
● Different segments ?
● Very diverse segments ?
● Are segments
interdependents

Cristina Boari- BS 2021-22

 Value proposition
Why should customers
choose our
product/service?
• Newness
• Price
• Customization
• Cost reduction
• Improved performance
• Risk reduction
• Accessibility
• Design
• Status
• ……..it is related to the offer
of the firm

Cristina Boari- BS 2021-22

https://www.artsy.net/
Cristina Boari- BS 2021-22
 Channels
How can we reach
the customer?
• From customers’ awareness
to evaluation, purchase,
delivery and after sales
• Own / partner channels
• Direct / indirect
• Independence/ integration of
channels

Cristina Boari- BS 2021-22

 Customer relationship
How do we keep
relationships with
customers?
• Personal assistance
• Dedicated personal assistance
• Self service
• Automated services
• Communities
• Co-creation

Cristina Boari- BS 2021-22

 Revenue streams
• How are customer paying?
• One-time payment
• Subscription fee; renting/leasing; licencing; usage fee;
after sale; brokerage fee; advertising
• Fixed and dynamic pricing
• How would they be willing to pay?

Cristina Boari- BS 2021-22

 Key resources
● Which resources
contribute most to
the value proposition?
○ Human
○ Physical
○ Financial
○ Digital
○ Knowhow

Cristina Boari- BS 2021-22

 Key activities
● Which activities
contribute most
to the value
proposition?
○ Production,
Marketing, R&D
○ Problem solving
○ Platform
management

Cristina Boari- BS 2021-22

 Key partnerships
● Which is the network
of partners that allow
the fulfillment of the
value proposition for
our customers?
● Who are they?
● What do they
provide?
○ Access to resources
○ Access to
status/legitimacy
○ Uncertainty reduction

Cristina Boari- BS 2021-22

Cristina Boari- BS 2021-22
 Cost structure
• The impact of resources and activities on
our costs?
– Depending on our value proposition
• Cost or value driven
– Fixed versus variable costs
– Access to different economies of costs
(economy of scale, scope, experience)

Cristina Boari- BS 2021-22

 Business model (Osterwalder, Pigneur, 2010)

Cristina Boari- BS 2021-22

 Business Model Archetipes

● Un-bundling
● Multi-sided
● Long tail
● Free
● Open

Cristina Boari- BS 2021-22

 Un-bundling Business Model
From large telecommunication firms to:

● Companies gain a
competitive
advantage by Equipment manufacturers

● Bundling
● Unbundling some
of the activities.
● It depends on
● Technological Mobile business

evolution
● Firm’s position
Content providers

Cristina Boari- BS 2021-22

 Multi-sided platform business model
• Two or more interdependent GOOGLE
customer segments
• The created value depends on:
– Interactions between ● A service: AdWords for
segments advertisers
– New attracted customers ● AdSense : allows third parties
• Key resource: the platform to earn a portion of Google’s
• Major cost: the platform adv. revenues, by displaying
management google
• Different revenue streams for
different segments

Cristina Boari- BS 2021-22

The Long Tail Business Model

• From targeting most profitable clients to ….

• …..selling small quantities to many niches, less profitable individually
• New value proposition + Key activities and resources+ Cost of platform

Cristina Boari- BS 2021-22

Cristina Boari- BS 2021-22
 Free Business Model
• One Customer segment
benefits from a free-of-charge – The large majority of
offer
Spotify users
• Non-paying customers are
financed by other customer
subscribe to the free
segments or another part of the service
business model – Subscribers to
Premium “finance”
other customers

Cristina Boari- BS 2021-22

Open Business model
• Focus on new ideas and innovations
• In-house innovation is a limited portion of the R&D effort
• Create value by sistematically collaborating with outside firms and institutions
• A large number of strategic partnerships

Cristina Boari- BS 2021-22

https://www.desall.com/Contests?page=1
Cristina Boari- BS 2021-22