These 9 building blocks are:
Let us discuss one by one all these.
2. Value propositions – After taking feedbacks from target customer segments, we have to propose that what product/service we will be creating and delivering. How will it be different from others? What all solutions will it offer to the existing problems faced by the customers at present? Here we define as to what will be the form of our services/products and what all best features will it have and how different will it be from existing ones. One should have a clear cut idea about the final deliverables or value propositions.
3. Channels -Now the product or services are in well-defined form. Now we need to define the channels through which we reach to customers for advertising, for ex., reaching through internet advertisements etc. Then through which channel customers will reach us in order to place an order and through which channel orders will be delivered to the customers. How sales team will reach the customers and vice-versa in case of any after sales or problems during the useful life of the product or services. How to get in touch for an Annual Maintenance Contracts etc. These all requirements should well be mapped in advanced.
4. Customer Relationships -What type of relationship does each Customer Segmentexpect us to establish and maintain with them? This building block deals with the customer acquisition and customer retention requirements. How to create a trusted and authentic relationship with the customers. There should be a new innovative concept of value deliverable in order to acquire customers. Research shows that customer retention pays off more than customer acquisition. There are many examples in the past where retained customers put up efforts in order to save the business or re-establish the business after a drop from a position in the market.
5. Revenue Streams – This building block will tell us the sources from where we capture the value. This deals with the fixing up of cost on which the customer segment is willing to pay for the services/products. This can never be standalone, it depends on various competitors in the markets offering the same kind of services/products. This also deals with strategic decisions regarding discount prices offered to various categories to acquire customers of various segments.
6. Key Resources – These are the assets required to create & deliver the services/products. These resources could be other than monetary resources. This building block involves arranging space for plant/office/warehouse, requirements of machinery, requirements of vehicle and other useful assets like furniture for offices and allied equipments for day-to-day functioning. It also requires to plan for the human resources internal or on contractual basis. More strong and detailed the planning will be, the more robust will be the chances of business to succeed.
7. Key Activities –These are the most critical activities required to create and deliver value propositions. We can always categorize the activities in terms of departments that a new venture should have. These activities could be broadly divided into Operations, Sales and Marketing, Finance and administration, planning, purchase etc.
8. Key Partnerships-Businesses are result of a team driven approach. Here we need to consider whether the product/service be delivered alone or through some Strategic alliances or joint ventures. It is often necessary to tie up especially in case of a new technology transfers or new ventures. The similar experiences could help us save time and save cost on R&D and other expenses.
9. Cost Structure - The cost structure required to create and deliver value. These could be of 2 types. Cost driven or Value driven. Cost Driven is one cost structure which focuses on the cost optimization like the minimum requirements to develop a product/service. Moreover, Value driven is one which focuses on giving value to customers without bothering about the cost for example, Luxury Cars. Evaluation of cost structure is a key step before starting of a new venture.
Though success is a non-defined term and depends on several factors of which some could be categorized and some could not even be thought of that is why many people start well and fail and many people get success without much of the planning. Still, we could do whatever is in our hands and that is deep product research, deep market analysis, deep customer analysis, financial feasibility analysis and environmental study so that we can be best assured of what could be planned and left with only dynamic situations to be handled during execution. This business model data collection and analysis helps in better planning of the startup.