Table of Contents
Customer Problem and Solution
Customer Benefits Importance
Business Model Canvas
The Nine Components Of BMC
The Idea: Representation In Bmc
Business Model Canvas
Every innovative idea or business plan need to get tested or being represented in some form. The traditional methods of representing any idea are very time taking are length to cover. Therefore the Business model canvas plays a vital role in representing any business idea while covering all the essential aspects that play a significant role in business planning or helps to find out the loops holes (Joyce, & Paquin, 2016). It gives a visual representation of all the elements on the single piece of paper. It helps the organisation to figure out the business concept, the problems related to the different fields and also to find the relevant solutions. It helps to understand the right customer population for the products and services. It helps to focus on the essential aspects like value proposition and the customer segment.
The world is always in need to get new opportunity to get the services or to serve the services in better ways. Technology is developing day by day at a tremendous speed, whether it is about the working field or entertainment. The idea is based on the software service that serves a combined package of entertainment from the best video/movies experience to the best music/podcast experience. People use different apps for both purposes, but this app will serve them both on the same platform. The idea would be represented in the business model canvas form to understand the significant aspects of the business and understand the roles of the different section to get a better understanding related to the idea.
A business model is a plan that describes how a business going to work and how it would make money. It contains different sections like who would be your customer base, how would you serve to them and details related to financing etc. For all these purposes experts use business model canvas to draw everything on one single page. Business model canvas is used to visualise your idea and test your business model, which is an integral feature while someone is developing a business idea. Business Model Canvas is a term used for the representation of the business idea on the piece of paper. It allows the person to understand the loopholes and weaker sections of the business plan they have and test whether it can work (Ojasalo, & Ojasalo, 2018). This model was developed by the computer scientist Yves Pigneur and the Swiss economic theorist Alexandra Oster alder in 2005. BMC has been introduced in the book, and since then it has earned the popularity among business planners.
Knowing the customer is a significant milestone for a business endeavour. A service provider needs to always take care of two significant factors: identifying the customer/ market problems and getting a rigid solution for that. To understand the problem of the targeted customers, one should understand the market first and then analyse how could they solve the issue of the customers as well as make revenue out of the solution. A customer always looks for the product/service that stands best on expectation and convenient as per their needs and budget. However, only focusing on the needs of the customer and ignoring the other factors would also fail the innovation, a business person should always use the customer's input as the basis of innovation. The solution to the problem is talking to prospects and target market users.
Nevertheless, only focusing on what prospects tell and delivering what the next customer increase the revenue need would but lose the market opportunity. It is critical to solving the market and customer problems at the same time, but it is not impossible, the company needs to focus on the current market needs and the evolution in the customers' need and innovate according to those factors. Sometimes customers are unaware of their own needs, and those silent needs of the customers need to get identifies by the service provider because it would help to innovate the idea that would work the best and cross all the hurdles. To sell the targeted customers' problems, the service provider first must identify the root cause and then innovate the idea for the solution.
Customer value is essential for any service provider. The quality of service represents the brand quality, values and image. The main aim of any innovative idea of the service provider is to satisfy the needs of the customers and ultimately benefits them. However, if the idea is serving the needs as well as the interest of the customer, it will increase the efficiency, market share, loyalty, and decreases the errors, which ultimately leads to higher profits. When the customers are satisfied, they recommend the brand to others also, which will increase the customer engagement that will strengthen the network and reach of the brand. With an increased number of customers, there would be an increase in sales as well; which ensures more revenue that ultimately improves the cash flow and profits the service provider to expand the business. Customer benefits are essential for the growth of any business regardless of what scale it is providing the service.
The business model canvas is a tool that helps to do the strategic management in the business and allows visualizing and assessing the idea/concept. It is a one-page presentation of the business plan that contains different fundamental elements of the company represented in 9 boxes( Pigneur & Oster alder, 2005). The right and left hemisphere of the canvas focuses on customers or the market and the business, respectively. The middle section explains the exchange of values between the customer and the company.It is very efficient and easy to present as well as understanding model.
5.a CUSTOMER SEGMENT: when the company set the target on the particular type of the customers or the companies to sell their product. Segmenting them based on the common traits such as age, gender, regional distribution, etc. it enhances the opportunities to serve for them. On the basis of segmenting the company can choose what kind of customer they can help and whom they can ignore (Keane, Cormican, & Sheahan, 2018). Many times customer segments are mutually dependent. Such as work funders of Asian population would only engage only if the company has Asian people in the company's following.
5.bCUSTOMER RELATIONSHIPS: this aspect explains about the relationships the customers expect from the company and vice versa. It works according to the values of the company. E.g. 1) Personal assistance 2) Dedicated personal service
Channels are the contact points that let the company communicate and interact with its customers. Channels raise awareness about products or service among the consumers and provide customers an avenue to purchase products or services and to enable support after purchase.The types of channels are:Partner channels, Owned channels
5.d Revenue streams:Revenue streams are sources of generating money for the company by sale of service or goods to consumers. A revenue stream can be based on transaction or Recurring revenue
5.e Key Activities
This section describes all the key activities needed to be done to make the business model work. These key activities are focused on reaching consumer segments and maintaining relationships with customers (Umar, Sasongko, & Aguzman, 2018)., fulfilling value proposition and generating revenue.
5.f Key Resources
This section describes key resources or the main input needed to carry out key activities for creating value propositions.
5.g Key Partners
Key partners are the external suppliers or companies that help in carrying out key activities (Sparviero, 2019). These alliances are forged to acquire resources and reduce risks. Types of partnerships are: Joint ventures, Buyer-supplier relationships, Strategic alliance and Competition
5.h Cost structure
This block identifies all the expenditure associated with operating the business model.
Focus should be on evaluating the cost of creation and delivery of the value propositions, generating revenue streams, and maintaining relationships with consumers (Toro-Jarrín, Ponce-Jaramillo, & Güemes-Castorena, 2016).
5.i Value propositions
This represents the unique solution (product or service) identified for a difficulty faced by a customer segment, or one that creates value for the customer segment.
If a new product is being offered, it should be innovative. If offering a product that already exists, it should stand out with better features.
5.j Exemplary image:
The new generation is fond of music and visual content. There is various software present in the market that deals with needs. However, there is no single platform that provides both musical and visual entertainment on the same software—the business model of the software idea.
BMC helps to understand the major aspects of the business idea or plan which is very essential while any organization is planning strategies to increase their growth or reach. It helps to reduce the gap between the customer’s need and company services. As BMC highlights the key points which help in detecting the loopholes and finding solution for them. The customer-organization communication and relationships are the two major pathways which leads any startup or organization to success. The BMC is flawless as a base to let company's contemplations run free(García-Muiña, Medina-Salgado, Ferrari, & Cucchi, 2020). A company can likewise test elective models for their business thought and find new mix prospects. With the BMC, new companies can introduce their business thought. Corporates can likewise utilize the BMC for new activities. The BMC can again show conditions or clashes of destinations with current cycles.
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