UNDERSTANDING YOUR BUSINESS MODEL & DEVELOPING

Transcript:UNDERSTANDING YOUR BUSINESS MODEL & DEVELOPING:
UNDERSTANDING YOUR BUSINESS MODEL & DEVELOPING STRATEGY Chapter 5 Your first steps are to… Select a business model Determine a basic strategy category Differentiation Low cost Niche Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 2 Create your business model Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 3 Amazon’s revenue & cost model requires high volume Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© Other Revenue Media Electronics & Merchandise Cost of Sales Operating Expenses 4 Be First (or very early) into the Market Quickly Capture a Large % of the Market Create Switching Costs To Succeed as a First Mover, Entrepreneurs Must… First movers rarely win and its an expensive strategy to take Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 5 First Mover’s are Often Surpassed Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 6 To win, your strategy must be to be one, or more, of these… Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 7 Your People are your Advantage Founders need to create a culture and align the employees they select with the values and structure of the company Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 8 Benchmark Devise Initial Market Test Create a Platform Develop your Entry Strategy Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 9 Benchmark your Competition: The JetBlue Example Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 10 Growth Strategy Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© New ventures should focus on testing the market and refining the business model; however, it is never too early to start thinking about growth. 11 Franchising has 3 main benefits Replicability Established and proven methods New sources of revenue Royalties and fees from franchisees New capital to fund growth Franchising works best with service businesses that are easy to replicate. Be sure to monitor franchisees to maintain brand purity. Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 12 Source: The 20 most successful Fast Food Chains in America, Business Insider, August 8, 2015 Top 10 US Franchisors Perform Well Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, 2017© 13 Tangential & Adjacent Products What new products make sense with your current offerings? Current customers? Spread Existing Costs over Larger Product Base Accelerate Revenue Faster than Increase in Costs Leverage your Firm’s Experience Distribution Channels Supplier Relationships Customer Relationships Drive