BMC: a Visual Representation of the Business Model
The term “business model” refers to a company’s profit-making strategies. It specifies the product or service to be sold by the company, the target market, and the estimated expenses, among other things. Business models are important for both new and existing companies. They assist new companies in attracting funding, recruiting talent, and motivating management and employees. Established companies must update their business plans on a regular basis or they will be unable to foresee future trends and obstacles.
Business models are classified into numerous types, including B2C, B2B, C2C, and C2B.
- B2C (Business to Customer): a business model that directly connects business people and customers, and is typically more known because we utilize goods with this business model in our daily lives, such as Gojek.
- B2B (Business to Business): a business model that takes place between business people. Ralali.com is an example of a B2B enterprise in Indonesia.
- C2C (Customer to Customer): a business model in which a seller in an e-commerce sells things to buyers in the same e-commerce. Both the seller and buyer are both users of an e-commerce that makes it called C2C. Some examples of businesses that use this model are Shopee, Tokopedia, BliBli, etc
- C2B (Customer to Business): a business model in which customers sell their goods and services to businesses. A social media influencer who provides their talent to corporations looking to market their products is an example of this business model. Raditya Dika, Tasya Farasya, and others are examples of well-known Indonesian influencers.
Of the four business models mentioned above, it can be developed into various forms, some of which are affinity club, brokerage, bundling, cell phone, crowdsourcing, disintermediation, fractionalization, freemium, leasing, low-touch, negative operating cycle, pay as you go, razor/blades, reverse razor/blades, reverse auctions, product to service, standardization, subscription, and user communities.
We may use numerous frameworks to set up a business model, one of which is the BMC or business model canvas. The business model canvas is the most commonly used business model since it encompasses all areas of the firm, from manufacturing to distribution to customer hands. In order to cover all areas of the business, BMC has nine components that define all parts of the business and transform them into a full strategy in one document.
1. Customer Segment
Customer segment is the group of people who will or are likely to become our customers. We must clearly describe the features of the target market to be targeted in this part.
2. Customer Relationship
We can communicate with customer segments through customer relationships. It is beneficial to create community bonds among customers. This allows them to get to know one another, maybe solve one another’s issues, and provides businesses with a greater insight of their client base.
3. Channel
We approach clients through channels. Channel components include distribution systems until the product/feature reaches the client. Channels may be effective for increasing client awareness of a company’s products and services as well as presenting a value proposition.
4. Value Proposition
Value proposition is the value we provide to consumers. The strengths of our goods over rivals must be stated in the value proposition. The value proposition in the business model must be able to address the following components: newness, performance, customization, getting the job done, design, brand, price, cost reduction, risk reduction, accessibility, and convenience.
5. Key Activities
The term “Key Activities” refers to the most significant activities that a firm must perform in order for its business model to generate the value proposition delivered.
6. Key Resources
Physical, intellectual, human, and financial resources are examples of important resources that we must have in order to carry out key activities to provide value propositions to consumers.
7. Key Partner
The relationships you have with other businesses, governments, or non-consumer entities that assist your business model succeed are known as key partners. These might be your company’s relationships with its suppliers, manufacturers, business partners, and so on.
8. Revenue Stream
Revenue streams component of the Business Model Canvas comprises the money that the organization produces with each previously specified customer segment. However, this does not refer to the “profit” gained, but to the money flow involved.
9. Cost Structure
The cost structure of a business defines the costs that occur during its operations in order to provide a value proposition. These include workers, infrastructure, expenditures connected with all operations, and sourcing through key partnerships.
Overall, I was instructed to create a business model canvas from the Binar Academy platform, mapping the flow chart from the Binar Academy platform, and mapping the data flow diagram from the Binar Academy platform for challenge 2. You can access the entire file by clicking on the following link: