Innovation for Entrepreneurs: From Idea to Marketplace
Quiz Week 1 Quiz Answer
Question 1
What is the Value Proposition that your company or organization offers to solve customer problems and satisfy their needs? Your response should address value proposition items to include a distinct mix of elements catering to a customer segment’s needs. Values may be quantitative, such as price or speed of service, or qualitative, such as design or customer experience. Please respond with one paragraph.
Answer for Question 1
Value proposition describes the bundle of products or services that create value for a specific customer segment. Examples are such as what value do we deliver to the customer? Which customer needs are we satisfying? And, what are we offering to each customer segment? Value propositions exist in quantitative and qualitative areas. Quantitative areas include price, cost reduction, risk reduction, convenience and usability. Qualitative areas include newness, performance, design, brand, and customization
Question 2
What are the Customer Segments that your company or organization serves? Your response should address customer segment items to include the needs and wants of customers, distribution channels, types of relationships, different profitabilities, and the customers' willingness to pay. Please respond with one paragraph.
Answer for Question 2
Customer segments define the different groups of people or organizations to serve. They have separate segments if customer needs require and justify distinct offer, of if customer reached through different channels, requires different types of relationships, are willing to pay for different aspects, and have different profitabilities. Customer segments may exist in different types. Mass market is one large group comprising only one segment, niche market is specific, specialized customer group, segmented is a slightly different customer groups, diversified is having multiple unrelated customer segments and multi-sided markets.
Question 3
What Channels does your company or organization utilize for communication, distribution, and sales? Your response should address some or all of the five distinct channel phases which include awareness, evaluation, purchase, delivery, and after sales. Please respond with one paragraph.
Answer for Question 3
Channels describe how a company communicates with and reaches its customer segments to deliver a value proposition. Channels helps in raising awareness of the products and services, helping customers evaluate the value proposition, allowing customers to purchase, delivering a value proposition, and providing post-purchase customer support. Channels demand consideration of key questions. For example, through which channels do our customer segments want to be reached? How can we integrate our channels? And, what measures define which channels work best?
Question 4
What are the Customer Relationships that your company or organization plans to establish with its customer segments? Your response should address customer relationships that may include customer acquisition, customer retention, and upselling. Please respond with one paragraph.
Answer for Question 4
A customer relationship describes the types of relationships a company establishes with specific customer segments. It is driven by motivations to include customer acquisition, customer retention and upselling.
Question 5
What are the Revenue Streams that your company or organization will generate? Your response should address at least one of the following transaction revenues resulting from one-time customer payments or recurring revenues resulting from ongoing payments. Please respond with one paragraph.
Answer for Question 5
A revenue stream represents the cash a company generates from each Customer Segment. Revenues minus costs equals to profits. There are different types of revenue streams. The first is transaction revenues resulting from one-time customer payments. Another type is a recurring revenues resulting from ongoing payments to either deliver a value proposition to customers and/or provide post-purchase customer support. Revenue stream opportunities require you to ask several core questions. For what value are customers really willing to pay? For what do they currently pay (competitors)? And, how will this change in the future? Ways to generate revenue streams includes buying (asset sale), renting, subscription, licensing and advertising.
Question 6
What are the Key Partnerships that your company or organization utilizes? Your response should describe the company or organization’s network of suppliers and partners. Examples of partnerships include strategic alliances, co-opetition, joint ventures, and buyer-supplier relationships. Please respond with one paragraph.
Answer for Question 6
Key partnership describes the network of suppliers and partners that make the business model work. There are different types of partnerships which includes strategic alliances between non-competitors, joint ventures to develop new businesses, buyer-supplier relationships, and co-opetition which is a strategic partnership between competitors. Several motivations to create partnerships includes optimization and economy of scale, which is the most basic form of partnership or buyer-supplier relationship designed to optimize resources and activities (i.e. reduce cost). Another is an acquisition of particular resources and activities, to extend capabilities by relying on other firms to furnish particular resources or perform certain activities, and motivated by needs to acquire knowledge, licenses, or access to customers. Lastly is to reduce risk and uncertainty.
Question 7
What Key Resources are required to make the business model work? Your response should address key resources that can be physical, financial, intellectual, and/or human. Please respond with one paragraph.
Answer for Question 7
Key resources describe the most important assets required to make a business model work. It can be physical, financial, intellectual, or human. Key resources can be owned or leased by the company or acquired from key partners.
Question 8
What are the Key Activities your company or organization must perform? Your response should describe the most important activities a company must perform to operate successfully. Key activities will differ depending on type of business. These activities may be outsourced or completed within the organization. Please respond with one paragraph.
Answer for Question 8
Key activities are the most important things a company must do to make its business model work. For example, for PC manufacturer Dell, key activities include supply chain management. And for consultancy McKinsey, key activities include problem solving.
Key activities are the most important things a company must do to make its business model work. For example, for PC manufacturer Dell, key activities include supply chain management. And for consultancy McKinsey, key activities include problem solving.
Question 9
What is the Cost Structure of your company or organization? Your response should describe all costs incurred to operate the business model. Two types of cost structures are cost-driven and value-driven; many business models fall somewhere in between these two models. Please respond with one paragraph.
Answer for Question 9
A cost structure is all costs incurred to operate a business model. By creating and delivering value, maintaining customer relationships, and generating revenue all incur costs. Costs can be calculated relatively easily after defining key resources, key activities, and key partnerships Cost-driven business models focus on minimizing costs wherever possible. They aim at creating and maintaining the leanest possible cost structure, using low price value propositions, maximum automation, and extensive outsourcing. Value-driven companies are less concerned with the cost implications, and instead focus on value creation. They offer premium value propositions and a high degree of personalized service usually characterize value-driven business models.
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