Manual for a workshop on Business Model Generation & Innovation. You wish to enable your organization to meet new realities head-on but lack a clear strategy to distinguish your company from others? Has your current business model been weakened by external forces and events? Have a look at these slides.

1. October 2017
Business Model Generation
Harry Bruintjes
CREATING NEW REALITIES
Business Model Generation &
Innovation
Harry J. Bruintjes

2. 2
Business model
What is it?
A Business Model describes the rationale of how an
organization creates, delivers and captures value*.
The concept must be simple, relevant,
and intuitively understandable.
Covering four areas:
Customers, Offer, Infrastructure and Financial Viability
* The approach is based on the book ‘Business Model Generation’, written
by Alexander Osterwalder and Yves Pigneur.

3. 3
Business model
Nine building blocks
Cost Structure Revenue Streams
Strategic
partnerships
Key activities Value proposition
Key resources
Customer
relationships
Channels
Customer segments

4. 4
Customer segments
The starting point
Customer
segments
• For whom are
we creating
value?
• Who are our
most important
customers?
How do we define a customer segment?
ü Their needs require and justify a distinct offer.
ü They are reached through different distribution
channels.
ü They require different types of relationships.
ü They have substantially different profitabilities.
ü They are willing to pay for different aspects of the
offer.
Some examples:
• Mass market
• Niche market
• Segmented
• Diversified
• Multi sided platforms

5. 5
Value propositions
The bundle of products and services that create value
Some examples:
A. Quantitative
• Performance
• Price
• Cost reduction
• Risk reduction
•
B. Qualitative
• Newness
• Customization
• Getting the job done
• Design
• Brand/Status
• Accessibility
• Convenience/Usability
Value proposition
A. What value are we delivering
to the customer?
B. Which one of our customer’s
problems are we helping to
solve?
C. Which customer needs are we
satisfying?
D. What bundles of products and
services are we offering to
each customer segment?

6. Awareness Evaluation Purchase Delivery After sales
6
Channels
The way we communicate and reach customer segments
Channels
• Through which channels do our
customer segments want to be
reached?
• How are we reaching them
now?
• How are our channels
integrated?
• Which ones work best?
• Which ones are most efficient?
• How are we integrating them
with customer routines?
What is our impact in the different channel phases?
Channel types
Own
Partner
Direct
Indirect
Sales force
Web sales
Own stores
Partner
Stores
Wholesaler
Channel functions
• Raising awareness among
customers about a company’s
products and services.
• Helping customers evaluate a
company’s value proposition.
• Allowing customers to
purchase specific products
and services.
• Delivering a value proposition
to customers.
• Providing post-purchase
customer support.

7. 7
Customer relationships
The type of relationship we establish with each segment
Customer relationships
• What type of relationship
does each of our
customer segments
expect us to establish and
maintain with them?
• Which ones have we
established?
• How costly are they?
• How are they integrated
with the rest of our
business model?
Examples
• Personal assistance
• Dedicated personal
assistance
• Self-Service
• Automated Services
• Communities
• Co-creation

8. 8
Revenue Streams
The cash we generate from each segment
Examples
• Asset sale
• Usage fee
• Subscription fees
• Lending/Renting/Leasing
• Licensing
• Brokerage fees
• Advertising
Revenue Streams
• For what value are customer really willing
to pay?
• For what do they currently pay?
• How are they currently paying?
• How would they prefer to pay?
• How much does each revenue stream
contribute to overall revenues?
Fixed menu pricing Dynamic pricing
List price Negotiation
Product feature
dependent
Yield management
Customer segment
dependent
Real time market
Volume dependent Auctions

9. • Owned
• Leased
• Acquired by
partners
9
Key resources
The most important assets
categories
• Physical
• Intellectual
• Human
• Financial
Key resources
• What key resources do our Value
Propositions require?
• Our distribution channels?
• Customer relationships?
• Revenue Streams?

10. 10
Key activities
The most important things to make the business model work
categories
• Production
• Problem solving
• Platform/Network
Key activities
• What key activities do our value
propositions require?
• Our distribution channels?
• Customer relationships?
• Revenue Streams?

11. Motivations
• Optimization and economies
of scale
• Reduction of risk and
uncertainty
• Acquisition of particular
resources and activities
11
Key partnerships
The network partners that make the business model work
Types
• Strategic alliances between non-
competitors
• Coopetition: strategic partnerships
between competitors
• Joint ventures to develop new
business
• Buyer-supplier relationships to assure
reliable supplies
Key partnerships
• Who are our key partners?
• Who are our key suppliers?
• Which key resources are we acquiring
from partners?
• Which key activities do partners perform?

12. 12
Cost Structure
The cost incurred to operate the business model
Cost Structure
• What are the most important costs
inherent in our business model?
• Which key resources are most expensive?
• Which key activities are most expensive?
Cost driven Value driven
Fixed costs
Variable costs
Economies of scale
Economies of scope

13. MERGERS &
PARTICIPATIONS
GROWTH &
STRATEGY
RECOVERY
ACQUISITIONS
THANK YOU FOR
YOUR ATTENTION
BUSINESS
VALUATION &
OPTIMIZATION
+31 (0)85 2006244
+31 (0)6 19407782
harry.bruintjes@crossings-advisory.com
www.crossings-advisory.com
drs. Harry J. Bruintjes RAB RV
Partner

14. 14
Appendix
• Business environment: trends and forces
• Three core business types
• The golden circle
• Value proposition canvas

15. Business environment
Trends and forces
Key trends
Market
forces
Macro
economic
forces
Industry
forces
15

16. 16
Three core business types
Different economic, competitive and cultural imperatives
Product
Innovation
Customer
Relationship
Management
Infrastructure
Management
Economics
Early market entry
enables charging
premium prices and
acquiring large
market share; speed
is key
High cost of customer
acquisition makes it
imperative to gain
large wallet share;
economies of scope
are key
High fixed costs make
large volumes
essential to achieve
low unit costs;
economies of scale
are key
Competition
Battle for talent; low
barriers to entry;
many small players
thrive
Battle for scope;
rapid consolidation;
a few big players
dominate
Battle for scale; rapid
consolidation; a few
big players dominate
Culture
Employee centered;
coddling the creative
stars
Highly service
oriented; customer-
comes-first mentality
Cost focused; stresses
standardization,
predictability, and
efficiency

17. 17
The golden circle
How will your audience relate to your vision?
‘The golden circle defines the different
entities or stages of your business model
and how your audience relates to your
vision or message.’

18. 18
Value Proposition Canvas
Improving your value proposition
• Functional
• Emotional
• Social
Negative emotions, risks,
cost or situations a
customer would like to
avoid.
Positive emotions,
advantages or situations a
customer customer would
like to realize.
What do we offer
to satisfy the needs
of our customers?
How can we avoid negative
emotions, cost or negative
situations?
How can we realize positive
emotions, advantages or situations?

19. 19
Contact(s)
The Hague, The Netherlands
+31 (0)6 19407782
+31 (0)85 2006244
harry.bruintjes@crossings-advisory.com
www.crossings-advisory.com
drs. Harry J. Bruintjes RAB RV
Partner
Alexander Osterwalder and Harry
Bruintjes – Business Model Innovation –
Berlin 2019