10 Types of Entrepreneurial BMs

8/3/2019 10 Types of Entrepreneurial BMs

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B y - D r . V a n i t a J o s h i

S O M , S I M S

10 Entrepreneurial

BusinessModels11



Introduction-Business Model

A business model describes the rationale of how anorganization creates, delivers, and captures value.

On the other hand, a business plan is how you executethe business model. If the business model does not

work, the business is unlikely to do well.

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The Four-Box Business Model

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Customer Value Proposition

The overall value of a CVP depends on these three key metrics:

1. How important the ‘job’ or the problem is to the

customer2. How satisfied are the customers with the current

solutions

3.

What is the relative advantage of the new offering,compared to the previous offerings

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Nike id

Click to edit Master text stylesSecond level● Third level●

Fourth level● Fifth level

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Profit Formula

Revenue model

Cost structure

Target unit margin

Resource velocity

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Key Resources

People

Technology

Raw materials

Equipment

Information

Channels

Partnerships and alliances

Funds

Licenses or permits

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Key Processes

Processes

Business rules and success metrics

Behavioural norms

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Osterwalder’s Business Model Canvas

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How canvas differs from 4-box

Introduction of ‘Strategic partnerships’

Splitting customers into:

Customer segments

Customer relationships

Channels

Costs and revenues are in different components

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Types of Business Models

Currently Employed1111



Niche

Compatibility of niche needs and product features

Size of niche

Willingness to pay

accessibility

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Perfint

Vision:

Become a respected emerging player in providing'Niche Imaging Solutions' that help address Clinical

Productivity needs

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Long Tail

Make everything available

Have a low price

Help find products

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Flipkart

Founded by Sachin and Binny Bansal in October 2007

Both had worked for Amazon

Growth:

4 cr (2009)

20 cr (2010)

75 cr (2011)

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Mass Customisation

Combines the low unit costs of mass productionprocesses with the flexibility of individualcustomization

Modularize productsDelay assembly

Use configurators to capture customer preferences

Assemble and deliver

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Myantra.com

Started by Mukesh Bansal and Sankar Bora in 2006

Started as a site for personalised products

Now into sales of branded clothing

One of the top 10 e-commerce sites in India

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Freemium

Feature limited

Time Limited

Capacity limited

Seat limited

Customer Class Limited

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Zoho

Based in Chennai

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Unbundling

Breakup a product into independent components

Strip away add-ons

Sell components as a complete product

Up sell add-ons

Increase in prices is possible

2020



Zoho

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1. Zoho Assist

2. Zoho Business

3. Zoho Books

4. Zoho Calendar

5. Zoho Challenge

6. Zoho Chat

7. Zoho Creator

8. Zoho CRM9. Zoho Discussions

10. Zoho Docs

11. Zoho Gadgets

12. Zoho Wiki

16. Zoho Viewer

17. Zoho Meeting

18. Zoho Mobile

19. Zoho Notebook

20. Zoho People

21. Zoho Personal22. Zoho Planner

23. Zoho Polls

24. Zoho Projects

25. Zoho Recruit

26. Zoho Reports

27. Zoho Search

28. Zoho Share

29. Zoho Sheet

30. Zoho Show

31. Zoho Support



Bundling

There are economies of scale in production,

There are economies of scope in distribution,

Marginal costs of bundling are low

Production set-up costs are high,

Customer acquisition costs are high.

Consumers appreciate the resulting simplification

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Yusuf Motiwala’s Tringme

Enterprise wide telephony and messaging solutions

Mobile VOIP

Audio conferencing

IVR & Voice PHP

Pricing encourages purchase of bundled solutions

Tringme now has client like IBM, Facebook, AOL, etc.

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No Frills

Low prices are driven by low costs

Rarely will small firms have lower costs than largefirms

Decrease costs by removing ‘frills’ which are costly butare not valued much by customers

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No Frills-Nano & Air Deccan


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Premium

Premium

Uber Premium

Mass Class

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Charges a premium of about two lakhs over theprice of a Royal EnfieldClick to edit Master text styles

Second level●

Third level● Fourth level● Fifth level

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Vardenchi



Open Business Models

Open source software

Crowd sourcing

Crowdfunding

Crowdcreation

Crowdvoting

Crowd wisdom

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Advantage of using a Crowd sourcingmodel

Problems can be explored at comparatively little cost,and often very quickly

Payment is by results or even omitted

The entrepreneur can tap a wider range of talent

Entrepreneurs gain first-hand insight on theircustomers' desires

The community may feel a brand-building kinship with the entrepreneur

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I Am


400 people financedthe movie by Onir Dhar

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Multi Sided Platforms

The entrepreneur acts like a go-between

To be effective, a sufficiently large pool is needed on both sides.

A strong value proposition needs to be crafted for bothsides

Usually there are high network effects

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Redbus

Turnover of 150 crores

Walked into a space other had failed in

Success after they realised that bus operators were

customers too

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Social Enterprises

Working on business-minded solutions to socialproblems

Vijay Mahajan – “Single goal optimization is a 20th

century anacronism”

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Social Enterprises

Click to edit Master text stylesSecond level● Third level● Fourth level●

Fifth level

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Business Model Innovation

There are five strategiccircumstances that often

need a change in businessmodel:

The opportunity to addressthe needs of a group of

customers who have been

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10 Types of Entrepreneurial BMs

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