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BU121- january 15th.docx

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Laura Allan

th BU121- January 15 2013 Top hat monocle: read case/case analysis content in LAB MANUAL BIZ MODELS: how you intend to make money with your idea…turning your idea into a profitable business or sustainable not-for-profit Building a biz plan simply around an idea is not enough. GEL Analysis by Don Debelak (in Lab Manual)- Great customers, easy sales, long life The objective is to find-tune your idea so that it delivers all the GEL factors and you’ll be able to develop a better business model and write a great business plan How do we “massage” the plan into a sensible one? These factors branch out into subfactors and other criteria (COPY SLIDE)- memorize broken-down GEL Table! Desired levels for ALL factors likely don’t happen for businesses Ideally, there should be many opps for repeat sales…if not, how do you compensate?...minimizing sales support…customers should perceive that the price is low relative to value; Entry Points: ways that they can buy from you…using exlusive distributorship should only be done for a REASON Sales support required should be low, to avoid spending too much…same with marketing… High Profit margins are a MUST (the gap between price and cost)- biggest determinant of profitability Upselling and Cross-Selling opps are important- upselling to added features, extended warranty- Cross selling Is selling another product…i.e. surround sound for a TV Ongoing product costs should be low (i.e. tech support, repairs) Investment required should be low RELATIVE to the cost of business R&D spending should make your products/services stay on the cutting edge *Why it’s important/When it’s a Key Concern/How to Compensate i.e. you need more and more customers to grow and expand your sales? A key concern arises when price and volume are both low; or when one-time sales apply- Give them a reason to want to buy from you. Example: AWAKE chocolate GEL Assignment- Page 17 of lab manual Page 17, 32, 47, 60-70! 6 paragraphs explaning the 6 GEL factors! Explain how your business idea meets the desired level on each of the 3 criteria relevant to that subfactor “A business model describes the rationale of how an organization creates, delivers and captures value” -Alex Osterwaleder- Biz Model Generation  How a company intends to make money  How your idea actually becomes a business that makes money/social venture that is sustainable Different companies can have similar offerings but different business models Model affects strategy/ways of operating Consumer Reports and Time Magazine  CR is
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