Agenda

1
Agenda

• Silence Cell Phones, Please!
• Q A
• Learning Objectives
• Chapter 5, Business Models
• Reminders

2
Announcements

• Review Phase 1? Phase 2? Bring Them to me as You
  Finish Them

3
Previously in Entrepreneurship

• Developed Innovative Business Concepts
• Learned Overview of How to Study Feasibility of
  Concepts
• Reviewed Phase 1 and Phase 2
• Primary Market Research
• Secondary Market Research

4
Learning Objectives

• Understand Importance of Business Models
• Describe Your Companys Value Chain
• Identify Four Components of a Business Model
• Apply Concepts to Feasibility Report

5
Definition Business Model is

• Plan For How Your Business Creates Value By
• Competing Successfully
• Using Resources Effectively
• Structuring its Relationships
• Interfacing With Customers

6
Models Are Important Because

• Serve As On-Going Feasibility Study (Does
  Business Continue to Make Sense?)
• Focuses Attention on Key Elements
• Describes Why Network Partners Are Willing to
  Work Together
• Articulates Companys Core Logic
• Example Dominos Pizza http//phx.corporate-ir.ne
  t/phoenix.zhtml?c135383pirol-whydominos

7
Value Chain (Page 104) Where Can You Add Value?

• Primary Activities
• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing
• Service
• Support Activities
• Administration
• HR
• Technology
• Resource Procurement

8
Where In Value Chain Does Dominos Add Value?

• Review Figure 5.2 on page 104.
• Half of Class Identify Dominos Primary
  Activities That Create Value
• Other Half of Class Identify Dominos Support
  Activities That Create Value
• Company Activity Create Your Value Chain

9
Fatal Flaws Disaster!

• Completely Misread Customers
• Utterly Unsound Economics
• Skim or Read What Went Wrong? P. 107
• What Was Their Flaw?
• How Can You Avoid Flaws?

10
Four Components of a Business Model - Overview

• Core Strategy
• Strategic Resources
• Partnership Network
• Customer Interface

11
Core Strategy (How a Firm Competes)

• Mission Statement
• Dominos http//www.dominos.com/Public-EN/SiteCon
  tent/Secondary/InsideDominos/
• Product/Market Scope
• Basis For Differentiation
• Cost Leadership
• Differentiation
• Company Activity
• Write Your Mission Statement
• Identify Product/Market Scope
• Determine Cost Leadership or Differentiation

12
2. Strategic Resources/Assets

• Core Competency Unique Source of Firms
  Sustainable Competitive Advantage
• Strategic Assets
• Plant and Equipment Location Brands
  Patents
• Customer Data Staff
• Distinctive Partnerships
• Company Activity
• Identify Your Core Competency
• List Your Strategic Assets

13
3. Partnership Network

• Suppliers Dominos http//www.dominos.com/Public-
  EN/SiteContent/Secondary/InsideDominos/Domino's
  Suppliers/
• Other Key Relationships
• Strategic Alliances
• Joint Ventures
• Trade Association
• Other Networks
• Company Activity
• Identify Key Suppliers and Other Partners

14
4. Customer Interface

• Target Market
• Fulfillment and Support
• Pricing Structure
• Dominos http//www.dominos.com/Public-EN/SiteCon
  tent/Secondary/InsideDominos/PizzaParticulars/
• Company Activity
• Identify Target Market
• Review Fulfillment and Support

15
Learning Objectives How Did We Do?

• Understand Importance of Business Models
• Describe Your Companys Value Chain
• Identify Four Components of a Business Model
• Apply Concepts to Feasibility Report

16
Reminders

• Next Chapter 6
• Research, Research, Research!
• Network, Too!