MIT Enterprise Forum of Pakistan

7th Annual BAP – 2013Workshop: “Writing an Effective Business Plan”

Azhar Rizvi

[Idea Titile]

Business Plan Presentation

[Presentor_name][Other_Team_Members_name]

Note: • Slides should not exceed 7 (including this and the thank you slide) • Total Time – 7 mins (5 mins presentation & 2 min Q&A)• Give a 30 sec Elevator Pitch on this slide

Market Need

What is the problem or unmet need that your plan solves

• Value creation– Does this technology or scientific idea create something of value for

customers?

• Value capture– Can we capture the economic value inherent in this idea in the face of

competition

Value Creation

• What is your value proposition?• What does this idea do for a group of customers?• Valuable attributes belong to products not technologies

Technology Product/solution

Market

Value Capture

• Can we protect our competitive advantage (value proposition)?• How will we deliver value to customers?

Technology Product/solution

Market

What protective layer can we wrap around our technology, product & customers?

Market Analysis

• Market Size • Target Market• Opportunity Size

Customer Focus

• List the type of customers who want a solution to the problem

• For each type of customers indicate the market size and also the total size

• Roadmap for Future

Your Solution

• Briefly describer your solution• Describe your competitive advantage• Describe the Value Proposition – What

economic benefit does your solution provide to the customers

Business Model, Go-to-Market Strategy and key Risks

• Describe your business Model – Especially how will you make money

• Describe your Go-to-Market Strategy – how will your target customers find out what you are offering (product/service)

• Indicate Key risks to your business and the mitigation strategies for the same

The Business Model

def: A method by which a firm uses its resources (cash, technology and people) to offer its customers better value than its competitors and make money doing so.

It tells who pays, how much and how often.

Highly Complex

Simplified

Your Business Model is NOT your Business

Business Model Innovation is critical to developing a quality business,

attacking new markets and driving profitability

Components of the Business Model

Components of the Business Model

1. Value Proposition 2. Market Segment 3. Value Chain Structure 4. Position in the Value Network 5. Revenue Generation and Margins 6. Competitive Strategy 7. Stage of Development

Value Proposition

• A description of the customer problem• The solution that addresses the problem• The value of this solution from the customer's

perspective (price, speed, design)

Market Segment

• The target audience• Recognizing that different market segments

have different needs

Value Chain Structure

• The firm's position in the value chain • Activities in the value chain• How the firm will capture part of the value

that it creates in the chain.

Position in the Value Network

• Identification of competitors• Identify complementary companies and

technology• Identify network-effects that can be utilized

to deliver more value to the customer.

Revenue Generation and Margins

• How revenue is generated (sales, leasing, subscription, support, etc.)• The cost structure• Target profit margins.

Competitive Strategy

• How will the company attempt to develop a sustainable competitive advantage?

• How will it use that advantage to improve the competitive position in the market?

Different types of Customer Segments

Mass Market

Niche Market

Segmented Market Diversified

Multi-sided Platforms

Different Types of Customer Segments &Different Models to Evaluate

Different Models to Evaluate

Direct Mass Media

Retail Telemarketing/ Phone Sales

Channels, Distributors and Partners

Trade Shows and Conferences

OEM Channels Internet - Web

Direct SalesConsumer or Business

Positives:• High Contact• Customer relations• More Control• Multi Purpose • Experts in the field

Negatives:• Free Consulting• May not like rep or rep

leaves firm• High Cost• Retention

Distributors & Channel Partners

Positives:• Cost of Sale is Low• Hands-off Sales• Exposure in new

markets• Credibility• Competitive Edge

Negatives:• Up-front fees• No control• Distant clients• Performance• Technical Pressure• Require lots of

attention and training

OEM Channels(Original Equipment Manufacturer)

Positives:• Prestige and

Publicity• List Sharing• Royalties / steady

revenue stream• Increase Market

Presence• Technical Control

Negatives• Competitor envy• Technical pressure• Channel Conflict• Your reputations

are linked

Other Examples

• Retail• Internet• Service Providers…….

What Business Model and Why?

What Business Model and Why?

• Apple - Dell• Citibank - American Express• SouthWest - Virgin Air• Patek Philippe - Swatch• Cuisinart – Nespresso• Bentley – Cadillac• Vertu – Nokia• AT&T vs. SKYPE

Standard Coffee Maker vs. Keurig

Nespresso…

Swatch vs. Movado…

Super high end

Financials and Exit Strategy

• Exit Strategy – Sale, Merger, IPO

• Financial Projections Year 1 Year 2 Year 3Total Revenues Gross Profit Net Income

Investment Needed

Thank you

Q & A