The Nuts and Bolts of Business Plans MIT - IAP 15

Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,The Nuts and Bolts of Business Plans,MIT-IAP 15.975,Business Models,Richard P Kivel,CEO,TheraGenetics Inc.,January 15,th,2009,The Right Ingredients,A Team with Relevant Experience,Market Size,Technology,Reasonable Projections,Competitive Advantage,Exit Strategy,Stage of Growth/Development,Stage 1:Early Growth,Sales Driven,Flexible/Agile/Creative,Loose controls and procedures,Stage 2:Rapid Growth,Delegation team changes,Operations Driven heavy P&L focus,Focus is internal on growth-clients,Stage 3:Late Growth,What worked earlier no longer does.,Systems become obsolete,.,Lose touch with customers,Focus externally,M&A or International Markets expansion,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.,Simple and Elegant,Business model design template,Osterwalder model:,Six Components of the Business Model,Henry Chesbrough and Richard S.Rosenbloom,Value Proposition,Market Segment,Value Chain Structure,Revenue Generation and Margins,Position in the Value Network,Competitive Strategy,Value Proposition,A description of the customer problem,The solution that addresses the problem,The value of this solution from the customers perspective,Market Segment,The group to target,Recognizing that different market segments have different needs.,Value Chain Structure,The firms 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.,Revenue Generation and Margins,How revenue is generated,(sales,leasing,subscription,support,etc.),The cost structure,Target profit margins.,Position in the Value Network,Identification of competitors,Identification complementors,Identify network effects that can be utilized to deliver more value to the customer.,Competitive Strategy,How will the company attempt to develop a sustainable competitive advantage?,How will it use that advantage to improve the enterprises competitive position in the market?,Different Models to Evaluate,Direct,Mass Media,Retail,Telemarketing/Phone Sales,Channels,Distributors and Partners,Trade Shows and Conferences,OEM Channels,Internet-Web,Three Examples,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,Partner Sales,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,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.,FedEX,What Business Model and Why?,Citibank vs-American Express,Jet Blue-vs-Virgin Air,Wal-Mart(1962)-vs-Neiman Marcus(1907),Dell-vs-e-Machines,Piaget-vs-Swatch,Amazon -vs-Barnes&Noble,Summary:Six Components,Value Proposition,Market Segment,Value Chain Structure,Revenue Generation and Margins,Position in the Value Network,Competitive Strategy,Simple and Elegant,Thank you,