Criminology Chapter 4
Criminology Chapter 4
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This 4 page Class Notes was uploaded by Gordo Ramsey on Wednesday February 17, 2016. The Class Notes belongs to at 1 MDSS-SGSLM-Langley AFB Advanced Education in General Dentistry 12 Months taught by in Summer 2015. Since its upload, it has received 9 views.
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Date Created: 02/17/16
Chapter 4: Developing a Business Model I. Developing a Business Model A. Business Concept 1. Concise description of an opportunity that contains four essential elements a. The value proposition and compelling story b. The definition of the customer c. A description of the product/service d. The distribution channel II. The Business Concept A. The Value Proposition 1. A compelling story illustrates the benefit that the customer drives from the product or service a. The benefit is often intangible, yet usually easily described 2. A compelling story answers the questions a. Why the interest? i. A little drama is ok here! b. What problem does this solve? B. The Customer Definition 1. The customer is the one who pays 2. The end-user is as important as the intermediary customer a. Ex: If I am a mother who buys my children clothing. I am the clothing retailers’ customer. However, the end-user of the clothing is my child C. The Product/Service 1. What does the customer need? 2. What is the team’s core competency? D. The Distribution Channel 1. How will the benefits be delivered to the customer? a. Or is the distribution channel the innovation, in, and of itself? E. Concept Quick Test 1. Am I really interested in this business opportunity? 2. Is anyone else interested? 3. Will people pay for what is being offered? 4. Why me? 5. Why now? III. The Value Chain and the Concept A. Activities 1. Upstream activities a. Those related to the production of a product or service, which may include product development, raw material, manufacturing, and warehousing 2. Downstream activities a. Those associated with selling the product or service such as customer acquisition, sales transactions, installation, and logistics B. Forces Affecting the Value Chain 1. The Internet a. Reduced transaction costs b. Disintermediation 2. Scarcity of raw materials 3. Snags in Distribution C. Characteristics of an effective distribution channel 1. Inventory 2. Ownership 3. Financing and payment 4. Risk management 5. Member power D. Distribution strategy 1. Evaluate strategies of similar companies 2. Look for the opportunity gaps E. Factors affecting the choice of strategy 1. Cost 2. Market coverage 3. Speed and reliability IV. The Business Model A. How to make money from the products and services offered 1. How will value be created for stakeholders? a. Jobs? b. Dividends? c. Capital gains? d. Timely loan payments? e. Superior product or service? 2. How will competitive advantage be achieved? 3. How can the efficacy of the model be sustained over time? B. Why do business fail? 1. Flawed logic 2. Limited strategic choices 3. Imperfect value creation and capture assumptions 4. Incorrect assumptions about the value chain a. Inaccessibility of raw materials, commodity inflation, poor distribution strategy C. Building a Business Model 1. What are the size and importance of the revenue streams that the business model can generate? 2. What costs most affect the model, and what is their size and importance to the model? a. In other words, what are the cost drivers for the business? b. Are there any costs/sole-source vendors that can “shut you down”? 3. How much capital is required to execute the business model and what is the timing of the cash needs? a. Cash is not income i. Cash is King 4. What are the critical success factors to achieving the goals of the business model? a. Does some outside event have to happen before you can fully or profitably execute your plan? i. Do oil and gas prices have to stay high or get higher for your model for a wind energy company to work?
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