I.

Customer Segments
Customers are the heart of any business model.
Without profitable customers, you wont
survive for long.
An organization must make a conscious decision
about which segments to serve and which to
ignore.
Once this decision is made, a business model can
be designed around a strong understanding of
specific customer needs.

Types of Customer
Segments
Mass Market: Business models focused on mass markets
dont distinguish between Customer Segments.

Niche Market: Business Models targeting niche markets

cater to specific, specialized Customer Segments.

Segmented: Some business models differentiate

between market segments with slightly different needs

and problems.

Diversified: An organization with a diversified business

model serves two unrelated Customer Segments with
very different needs and problems.

Multi-sided Platforms (or multi-sided markets): Some

organizations serve two or more interdependent
Customer Segments.

Your Key Customer

Who is your key customer?

Can you imagine others up or

downstream from your
primary customer?

II. Value Propositions

What value do we deliver to the
customer?
Which one of our customers
problems or needs are we solving?
What bundles of products/services
do we offer to each Customer
Segment?

Value Propositions

(cont.)

Each Value Proposition consists of a selected

bundle of products and/or services that
caters to the requirements of a specific
Customer Segment.
In this sense, the Value Proposition is an
aggregation of benefits that a company
offers customers.
Some value propositions may be innovative
and represent a new or disruptive offer.
Others may be similar to existing market
offers, but with added features and
attributes.

Characteristics of Value
Newness
Propositions
Performance
Customization
Getting the Job Done
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability

Your Value Proposition

What is your value proposition for
your lab or research?

What is the bundle of benefits

you offer to your customers?

III. Channels
The Channels building block describes how a
company communicates with and reaches
its Customer Segments to deliver a Value
Proposition.
Communication, distribution, and sales
Channels comprise a companys interface
with customers.
Channels are customer touch points that
play an important role in the customer
experience.

Channels
How will you create touch points
with your customers?

Touch points serve multiple

purposes:

Raising awareness
Selling to a customer
Delivering to a customer
Post-sale customer support

Channel phases:
1. Awareness
How do we raise awareness about our companys
products and services?
2. Evaluation
How do we help customers evaluate our
organizations Value Proposition?
3. Purchase
How do we allow customers to purchase specific
products and services?
4. Delivery
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support?

Your Channels?
How do you communicate your
product/results to your customer
segments to show that you deliver
your value proposition?

What are your touch points, your

interface with customers?

IV. Customer Relationships

What type of relationship does
each of our Customer
Segments expect us to
establish and maintain with
them?
How costly are they?
How are they integrated with
the rest of our business model?

Categories of Customer Relationships

Personal Assistance: human interaction via point of

sale, call centers, email,
Dedicated Personal Assistance: customer rep assigned
specifically to a customer.
Self-service: no direct relationship. Company provides
the means for customers to help themselves.
Automated Service: more sophisticated form of selfserve; automated services tailored to individuals.
Communities: many firms utilize user communities to
help each other, interact, and expand knowledge base.
Co-creation: Many now go beyond the traditional
customer-vendor relationship to co-create value with
customers. Amazon invites customer reviews; others
invite customers to design products; youtube solicits
content.

Your Relationships
You identified your customers but
what kind of relationships do you
maintain with them?
How do you communicate with
them?
How much information / product do
they want?
How close do they want to be? Hightouch or more distant relationship?

V. Revenue Streams
For what value are our customers
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?

Revenue Streams

Types:
Asset sale
Usage fee
Subscription Fees
Lending/Renting/
Leasing
Licensing
Brokerage fees
Advertising

Fixed pricing
List Price
Product
feature
dependent
Customer
segment
dependent
Volume
dependent

0 Dynamic

pricing
0 Negotiation
(bargaining)
0 Yield
Manageme
nt
0 Real-timeMarket

Your Revenue Streams

What are your revenue streams?
One or multiple streams?
How secure are they?
How do you find new ones? And
what will they need to give you
more funds? How do you prove
they should invest more in your
operation?

VI. Key Resources

The Key Resources building block describes
the most important assets required to
make a business model work. Every
business requires Key Resources. They
are what we have to have.

They allow an enterprise to create and

offer a value proposition, reach markets,
maintain relationships with Customer
Segments and earn revenues.

Key Resources

(cont.)

Key resources can be physical, financial,

intellectual, or human.
Key Resources can be owned, leased, or
acquired from key partners.
Different Key Resources are needed
depending on the type of business
model.

Your Key Resources

What are the key resources in
your operation?
Physical
Financial
Intellectual
Human

VII. Key Activities

The Key Activities building block
describes the most important things a
company must do to make its business
model work.

Key Activities are required to create and

deliver a Value Proposition, reach
markets, maintain Customer
Relationships, and earn revenues.

Categories of Activities
Production
Problem Solving
Platform/Network

Key Activities

(cont.)

Key Activities are different for different

business model types.
For software maker Microsoft, Key Activities
include software development.
For Walmart, Key Activities include supply
chain management.
For consultant McKinsey, Key Activities
include problem solving.

Your Key Activities

What are the key activities in
your lab/research/teaching?
What is it you do?

VIII. Key Partnerships

The Key Partnerships building block
describes the network of suppliers and
partners that make the business model
work.

Companies increasingly create alliances

to optimize their business models,
reduce risk, or acquire resources.

Motivations for
partnerships:
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and
activities

Your Key Partners

Who are your partners? Who do you
need to make your research go?
Who supports your lab, your
teaching, your research?
Who is critical to getting the
funding, the support, who runs
interference, who will take the
blame and give you the credit, ?

IX. Cost Structure

The Cost Structure describes all costs
incurred to operate a business model.
Creating and delivering value, maintaining
Customer Relationships, and generating
revenue all drive costs.
What are the most important costs in your
business model?
These costs can be calculated relatively
easily after defining Key Resources, Key
Activities, and Key Partnerships.

Costs
Is your business
more:
Cost Driven (leanest
cost structure, low
price value proposition,
maximum automation,
extensive outsourcing)
Value Driven ( focused
on value creation,
premium value
proposition)

0 Sample cost

characteristics:
0 Fixed Costs (salaries,
rents, utilities)
0 Variable costs
0 Economies of scale
0 Economies of scope

Your Costs
What are your key cost drivers?

Can you manage them, minimize

costs, partner for some of them,
co-opt for them,
Do you have control over your
costs?