Business Model Generation - Essay Example

Business Model Generation Customer Segments This illustrates the main target groups for the Facebook business. These include individuals who use the social site for socialization and connections with friends and people around the world. The other target group is the online business organizations that use the Facebook platform to reach to their clients and business partners (Osterwalder & Pigneur, 2010). The online companies use the Facebook platform to makes their advertisements and sales to clients globally. Other physical business also creates blogs and pages on the Facebook for their product promotions and customer connections (Osterwalder & Pigneur, 2013). Through the creation of jam on their sites; they can attract customers. The activities These are some of the mandatory duties that are carried out by the Facebook management to create value and services to their esteemed clients. The activities relate to the value proportions that are important things provided by the company for the convenience of the clients. Some of the activities in Facebook business include the increase of customer base. This is done by expanding the limit number of contacts that an individual can have on their wall (Shih, 2013).The management also increases the limit number of blogs and pages that a company or organization can have on the platform (Osterwalder & Pigneur, 2013). The Facebook Company also creates links that their clients can connect with in other sites such as Twitter. This attracts more people to the site and eventually increasing their revenue due to economies of scale. Other possibility that Facebook Company has created is the ability to make online Facebook calls (Lillqvist & Salminen, 2015). Business Model Canvas for Facebook Business Customer Segments: Customers Individuals Online Companies Business Organization The Activities Increasing client base Creating online links Making it more dynamic Value Proportion Platform for socialization Platform for advertising & product promotion Customer Relationships: Signings Cheap & easy accessibility Provision of favorable & variety of services Key Partners Google LinkedIn Instagram Resources: Creation of personal profile Identification of brand and connections Channels Internet services Cost Structure: General maintenance cost Administrative Costs Revenue Streams: Making likes on platforms internet bundles Payments for connections product promotions and advertisements Value proportion These are the products provided by the company for the convenience of its users. One of them includes the platform for socialization by individuals. Most individuals use Facebook to socialize by connecting to new people around the globe, getting new connections and ideas from other online friends (Lillqvist & Salminen, 2015). Creation of such platform has enhanced Facebook use. The Facebook platform is also used by most organizations for advertising & product promotion of their products (Osterwalder & Pigneur, 2010). They use the platform to create awareness of the new product in the market or increase the clientele for the new products already in the market. Customer Relationships This involves the connections between the organization and their clients. It highlights that individuals get involved in Facebook and how the Company wins their spirit to continue holding them (Lillqvist & Salminen, 2015). One way in which individuals join Facebook is through creating a personal account and updating a profile. This process is free, and therefore individuals can easily access it. The Facebook facility is easily available and accessible from individuals comfort through their phones; computers and tablets (Shih, 2013).The services provided by the Company are also very favorable and affordable besides being of variety. The Partnerships These are other sites that work in partnership with the Facebook Company in creating a larger platform for activities. These partnerships help increase the client base and provide opportunities that help connections and ability to share. Individuals can connect through LinkedIn and share ideas through Facebook. Similar is possible in Instagram and Google Plus. This helps in reducing the administrative cost for the Facebook Company and increases its scope of operations (Lillqvist & Salminen, 2015). Resources These are materials used by the company to produce or create the services provided to the clients. Since Facebook is an online Company, it may not involve a lot of material resources but ideas and some necessities. For an individual or company to get involved in Facebook, he should be able to create the personal profile. This will facilitate communication (Osterwalder & Pigneur, 2010).For a Company doing promotion, it should be able to create brand identification and start connections to the sites for clients. Channels This is the medium through which the organization gets connected to the clients. In any online business, the medium of communication and transport is the internet. People can do online shopping and make payments through wire transfer (Lillqvist & Salminen, 2015). Connections are facilitated by the use of the internet. Cost Structure These are expenses incurred by the company in operating their activities and maintaining their clients. The main types of costs incurred by Facebook Company are General maintenance cost Administrative Costs. The general maintenance costs are variable because they depend on the amount of maintenance to be done (Osterwalder & Pigneur, 2013). Most of the administrative costs are fixed because they are like the standing operational charges of the organization. Revenue Streams These are the amount of income generated by the company from its users that use the platform for varied reasons. Most of the income for the company arises from making likes on individuals’ and companies posts, internet bundles consumed by users and payments for product promotions and advertisements (Osterwalder & Pigneur, 2010). Business Model Canvas for Facebook’s New Innovative Approach. Customer Segments: Mass market The Activities Creation of video platform Value Proportion platform for company advertisements convenience Customer Relationships creation of more visit times. Key Partners You tube Google + Channels Facebook Profiles Resources: Creation of new video ads Creation of video cards Cost Structure Creation of search engines Creation of the video platform Revenue Streams Advertisements fee Site visits fee The Epicenter of the Business Model An ideation process is whereby several business model ideas are created to help find a solution to a company’s pressing problem, then selecting the best one for implementation. It involves two main stages that are idea generation and synthesis. The business building blocks are the driving force in the ideation process. For a good innovation process, there are four epicenters that act as the guiding principle for innovation. These are resource-driven, offer-driven, customer-driven and finance-driven (Osterwalder & Pigneur, 2010). In our case, for Facebook Company to counter the challenges of launching the Facebook video, the best to be epicenter adopted is that of Offer-driven as described by Osterwalder & Pigneur (2010). The main competitor of Facebook video is the YouTube and therefore for Facebook to reposition their market and ensure good competitiveness, they need to ensure that their video platform has wide customer base and the target population uses the sites and takes more time at the sites. To capture this, their products must be offer-driven. The Canvas model gives the illustration of the new innovation that Facebook Company has adopted to expand their scope of operation and solve some advertisement challenges (Osterwalder & Pigneur, 2010). Illustration of the items in the Canvas Customer Segments Facebook Company targets the wide range of individuals from different social classes in the global market who has wide use of social sites. The company, therefore, has a wide variety of market scope that uses their platform (Lillqvist & Salminen, 2015). Activities To ensure the efficiency of the Facebook video, the main activity carried out by the company is the creation of the video platform in the individuals’ profiles so as to provide easy away to add videos by individuals in their walls. The creation of this new platform will increase the number of Facebook users especially the firms that want to advertise their products online (Osterwalder & Pigneur, 2010). Value Proportion The innovation of the video platform creates an opportunity for organizations to reach a wide clientele in the comfort of their residences or firms. The features of the platform make it easy to post a video thereby countering that provided by YouTube or other video platforms. Besides the uniqueness that comes with the new video platform, it also provides privacy of the content being posted by individuals and the identity of the individuals themselves (Osterwalder & Pigneur, 2010). This, therefore, gives confidence to the users. This is because it has several features that serve the variety of customer needs. Another value created by the product is convenience (Shih, 2013). The user can access their business operations and monitor their activities from their mobile phones. Customer Relationships The company creates more visit times to ensure customer relationships and to retain them at the sites for at least ten seconds to view various adverts. This is facilitated by creating enticing features in the sites (Shih, 2013). Partners For the efficient provision of the products, Facebook Company seeks the collaboration with other companies such as Google+. This is aimed at expanding their audience and creates awareness of the innovation. It also connects with the competitor firm YouTube to borrow some ideas of online video business (Lillqvist & Salminen, 2015). Resources The innovation of the new platform will also require resources such as Creation of new video ads and Creation of video cards. The company creates new ads in individual’s profiles to provide the opportunity of uploading a video from individual’s profile. Another resource required is video cards that give the opportunity of advertisements. The video cards help individual’s posting and provide revenue to the firm when subscribed. This enhances the privacy of any product posted (Osterwalder & Pigneur, 2013). Channels The main channel of the new innovation is the individuals’ profiles in the Facebook platform. This helps solve the challenge of content privacy because the individuals can choose whom to share the video with (Lillqvist & Salminen, 2015). Cost Structure The company incurs the cost of creating search engines when individuals use the engines to find various videos (Shih, 2013). The other cost incurred is that of creating the Facebook video platform to all their clients’ profiles. Revenue Streams The company accumulates revenues from the advertising fees they charge other organizations or individuals that use their video platforms for advertisements. Other revenues also stream from the number of visits made by individuals to the video sites posted and took at least ten seconds on the videos. These form the main source of revenues for Facebook from their innovation (Osterwalder & Pigneur, 2010). References Lillqvist, E., & Salminen, L. (2015). Facing Facebook: Impression Management Strategies in Company-Consumer Interactions, Journal of Business and Technical Communication, 3-30. Osterwalder, A., & Pigneur, Y. (2010). Business model generation, Business Model Canvas, explanation and concept of the Business Model canvas, 89-107. Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers, New Jersey, John Wiley & Sons. Osterwalder, A., & Pigneur, Y. (2013). Designing business models and similar strategic objects: the contribution of IS, Journal of the Association for Information Systems, 14(5), 237-244. Shih, C. (2013). The Facebook era: Tapping online social networks to build better products, reach new audiences, and sell more stuff, New York, Prentice Hall Appendix: THE IDEATION PROCESS Read More