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Lecture

BU111 Lecture Notes - Making Money, Value Proposition


Department
Business
Course Code
BU111
Professor
Jim Mc Cutcheon

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L1 BU121 12/10/2011
What is a Business Model
“a business model describes the rationale of how an organization
creates, delivers, and captures value”
how a company intends to make money
how your idea actually becomes a business that makes money
different companies can have similar offerings but different business
models
model affects strategy/ways of operating
Magazine: advertising based vs subscription based
Theatres: making money on refreshments
cleanliness and people skills
efficiency
Razors vs Shavers
Razor: make money off steady supply of razor blades
quality of blades
Electric Shaver: make money up front
Brick-and-Mortar Broker vs E-trade
Brick-and-Mortar: commission-based
high portfolio target market
E-trade: low fixed amount per trade
people who trade often
Building your Business Model
4 main areas:
customers=>who?
Customer segments
channels
customer relationships
offer=>what?
Value proposition
infrastructure=>how?
Key resources
key activities
key partnerships
financial viability=>how much?
Revenue streams
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