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Dr. Tran Thi Thu Hai

LO2.1 Present the structure and elements of a business

model.
LO2.2 Analyze and apply business planning tools such as
Canvas, SWOT. 1

LO2.3 Design a business model suitable for the target

market.
LO2.4 Evaluate the feasibility and sustainability of a business
model

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STRUCTURE

1 Business model and key components

2 Business plan

2.1. BUSINESS MODEL AND KEY COMPONENTS

Business Model The Important Role

Describes how an organization creates, delivers, and captures value. A well-defined business model is central to strategic success,
It provides a comprehensive overview of how the business operates, helping to transform ideas into specific operating systems. This
detailing its value proposition, target customer segments, key model serves as the foundation for strategic planning, fundraising,
activities, and revenue streams, thereby connecting internal and and flexible adaptation to market changes.
external factors

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BUSINESS MODEL CANVAS

The Business Model Canvas is a powerful conceptual framework. It offers a structured approach to visualizing and analyzing a business model,
and has since been adopted as a cornerstone tool for strategic planning among entrepreneurs

Concept Structure

The Business Model Canvas is a Consists of nine blocks that

visual tool for designing and describe how an organization
visualizing business models, creates, delivers, and captures
developed by Alexander Osterwalder value.
and Yves Pigneur in 2010

Advantages
Intuitive, easy to understand, easy to share, flexible to adjust, supports
assumption testing.

BUSINESS MODEL CANVAS

1. Value Propositions 2. Customer Segments 3. Channels

A unique value proposition that resolves a key The groups of individuals/organizations that a How a business communicates with and
problem for a defined customer segment business aims to reach and are the primary reaches its customer segments to deliver its 3

source of its revenue value proposition

4. Customer Relationships 5. Revenue Streams

Form of business relationship established with The amount of cash the business generates
customers to build and maintain long-term from each customer segment, including
relationships. revenue model and pricing tactics.

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BUSINESS MODEL CANVAS

6. Key Partnerships 7. Key Activities 8. Key Resources 9. Cost Structure

A network of suppliers and Key Activities are the most The most critical assets a Describes all costs incurred to
partners is essential to the important actions a business business must have to create operate a business model. These
efficient operation of the must undertake to successfully and deliver its value proposition. costs are typically categorized
business model. These partners execute its business model. These resources typically into fixed costs (which remain
play a vital role in optimizing These activities include creating encompass physical, financial, constant regardless of output)
operations, mitigating risks, and the value proposition, reaching intellectual, and human capital and variable costs (which
providing necessary resources. the market, maintaining fluctuate with the volume of
customer relationships, and production)
generating revenue

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UNBUNDLING BUSINESS MODELS

This business model is built on the strategic specialization of distribution channels, with the goal of achieving
superior value delivery and operational efficiency. According to Osterwader and Pigneur (2010), businesses
should focus on one of three core value principles.

Product innovation
Innovate and develop attractive, unique products.
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Customer Relationship Management

Building sustainable relationships

Infrastructure Management
Focus on efficiency and process standardization.

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THE LONG TAIL

The Long Tail model, developed by Chris Anderson (2004), focuses on selling a variety of niche products in small quantities, but with
total sales that are as profitable as traditional best-sellers.

Origin & Operation Case Study: LEGO's Long Tail

• Focus on niche products with low demand. • In 2005, LEGO launched LEGO Factory.
• Businesses expand their portfolio and generate large revenues. • The platform allows customers to design and order
• This model requires effective warehouse management and personalized puzzles.
robust technology for product search, and personalization • Expanded offerings from a handful of best-selling toy sets
• E-commerce and digital technology help reduce distribution to a wide variety of designs.

costs. • Meet personalized tastes, optimize profits from unique

products.

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MULTI-SIDED PLATFORMS
Multi-Sided Platforms create value by connecting distinct groups of users, typically suppliers and consumers. The platform operator functions as an intermediary,
coordinating interactions without necessarily owning the underlying assets.

Interaction Layer
Design how users find each other, communicate
and transact on the platform.

Value Layer 6

The basic unit of value that users exchange

(videos, articles, products, services).
Core Layer
Technological system supports, quality controls
and security for the entire platform.

Ability to create interactive networks, which benefit from a network. Additionally, it is an asset-light structure, allowing for flexible scaling.
For example, Grab does not own cars, and Airbnb does not own hotels

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FREEMIUM
The freemium model is a strategic approach in which a company offers a basic product for free, aiming to attract a large user base. Revenue is derived
from a minority of users who upgrade to a premium version for additional functionalities or benefits.

Example
10%
• Spotify: a free, ad-supported service and a paid, premium service.
Conversion rate
typically low, often below 10%, which necessitates an optimal strategy. • Duolingo: Free, revenue from ad-free experience and access to
advanced content.

0 Challenges

Supply cost • Risk of dependence on advertising and pressure to maintain technical

infrastructure.
For each free user, the cost of service delivery is low, approaching zero • It is necessary to correctly identify potential customer segments and
design a clear value upgrade roadmap.
Freemium's main objective is to drive user adoption and community
growth with a free offering. The model generates revenue by converting
a subset of these users into paying customers. This strategy is
commonly applied to software, video games, and mobile apps

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Direct to Consumer (D2C) Model

The D2C model involves companies selling their goods directly to the final consumer. This strategy grants businesses
the advantage of managing the entire value chain and building a more direct relationship with their customers.

Value chain management Cost & Profit Optimization

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Full control from production to the customer experience, Eliminating intermediary costs allows for lower prices
ensuring consistent quality and brand messaging for consumers and higher profit margins

Building Relationships
Directly interact to better understand customer
needs, thereby building loyalty.

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Key Success Factors for D2C

For D2C to succeed, businesses need to leverage technology and data to personalize the customer experience.

• Digital technology applications: Integrating technology

into marketing, sales, and post-sales services.

• Effective online channels: Utilizing websites, social

networks, and e-commerce platforms to maximize
reach and engagement.

• Personalize Customer Experience: Use Big Data and

AI to to create a unique and customized shopping
journey for every customer.

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Key Challenges of D2C

Despite its numerous benefits, the D2C model also faces significant challenges that require careful preparation.

High Digital Advertising Costs

Fierce competition on digital platforms has increased the
cost of customer acquisition.

Complex Logistics Management

Businesses must manage their own logistics and delivery,
requiring efficient operating systems.

Brand Content Creation

It is necessary to continuously create creative content to
attract and retain customer attention in a competitive
environment.

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Lean Startup Model

The Lean Startup model is a modern entrepreneurial approach that prioritizes building a minimum viable product (MVP), conducting
rapid experiments, and engaging in continuous learning to minimize waste.

Measure Feedback
Systematically collect and analyze data
from users.
Building MVP
Develop a Minimum Viable Product
(MVP) to collect early feedback.

Learn & Adjust

Learn from data to improve products or
change strategies.

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Advantages of Lean Startup Model

Save Cost & Time Flexibility and Speed Risk Management Promoting Innovation

Significantly reduce Enables businesses to Decisions are made based Encourage continuous
development costs and respond quickly to market on real data from MVP, testing and product
shorten time to market changes and customer minimizing the chance of improvement based on user
through rapid iterations. needs based on continuous failure and optimizing feedback, fostering a spirit
feedback. strategy. of innovation.

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Challenges of the Lean Startup Model

The Risk of
Ineffective measurement Impatience
Misunderstanding MVP
Can lead to developing a If user feedback is not The process of trial, error
product that is too sketchy, collected or analyzed and continuous learning
fails to meet the minimum properly, the learning requires persistence, and a
need, or misrepresents the process is disrupted and lack of patience can lead to
core value. effectiveness is reduced. premature quitting.

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2.2 Business Plan

A business plan is a formal document for presenting a business idea and

outlining how to execute it. A comprehensive business plan typically
integrates all key functional activities, such as marketing, finance,
operations, and human resource management

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"A business plan is more than just a description of an idea; it is a critical

tool that helps a business formulate its strategy, mitigate risks, and
attract investment capital."

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The Role of a Business Plan

A robust business plan serves as the foundation for success, helping to guide the venture's
strategic direction, establish its market position, and mitigate potential risks.

Operational Orientation
Identify goals, opportunities, challenges, and resources needed to start a business.

Business Idea Positioning

Help entrepreneurs understand the uniqueness and feasibility of their ideas

Risk Management
Research and assessment of difficulties and challenges before implementation.

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Requirements For An Effective Business Plan

Clear & Concise Comprehensive
Logical, easy-to-understand content, avoiding complex Covers all important aspects: market, operations, finance.
terminology.

Feasible & Practical Flexible

Assumptions based on reliable market research data. Anticipate risks and have timely response plans.

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Measurable Goals Suitable for Target Audience

Define specific goals that can be measured with indicators. Tailor the content to highlight the aspects that are most
relevant to each audience of interested parties

Quantitative Ensuring competitive advantage

Quantify clearly with specific figures to enhance Clearly demonstrate competitive advantage
persuasiveness.

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CONTENTS OF
A BUSINESS PLAN

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1. Executive Summary
The Executive Summary is the most critical section of the business
plan. It must present a short but complete overview of the key
topics, which include the business idea, target market, revenue
model, management team, financial plan, and capital requirements.

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This section provides a complete project overview in just 1-2 pages.

Its purpose is to make a strong first impression and pique the
reader's interest to learn more.

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2. Business Idea
Products/Services
Describe in detail the core products/services that the business provides.

Market Demand
Identify the specific pain points and needs that your offering addresses for its
intended users

Unique Selling Point (USP)

Highlight USP over competitors

A strong business idea that effectively solves a real-world problem is the key to building a
thriving company

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3. Market and Target Customer Analysis

Competitor
1

2 Customer 13

3 Industry

Industry analysis (size, trends), customer segments (characteristics, behaviors, needs), competitors (strengths, weaknesses,
strategies). SWOT/PESTEL.

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4. Marketing Plan
Price
Pricing strategy Place
Distribution
channel

Product
Promotion
Product/service Communication and
features and benefits.
advertising strategy

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5. Business Type and Legal Structure

Select Type
Choose the right business entity (a sole proprietorship, an LLC, or a joint-stock
company,…) that aligns with your goals and the nature of your venture

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Ownership Structure
Clarify ownership structure, division of rights and responsibilities among parties.

Capital Needs
Determine the initial capital and legal factors related to charter capital.

Choosing the right type of business is a key factor that affects legal responsibilities and growth
opportunities.

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Other Important Aspects of a Business Plan

6. Operation 7. Human Resources and Organization

Production/supply processes, locations, technology and Organizational structure, key roles, recruitment needs and
management systems. talent development.

8. Cost and Financial Planning 9. Sources of Funding

Forecast revenue, expenses, profits, cash flow and break- Total initial investment, purpose of use and sources of capital
even point for 3-5 years. mobilization.

10. Risk Management 11. Appendices

Identify potential risks (financial, legal, market) and solutions. Legal documents, team profiles, contracts, survey results.

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Finalizing the Business Plan

Finalizing a business plan necessitates a careful consideration of its intended audience and a tailored presentation strategy to
secure support and investment.

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Audience Presentation

• Businessman: Deep understanding of technology and innovation. • Cover & Title: Professional, contains basic information.
• Market: Detailed market information, determine market • Length: Keep it short (15-25 pages) to keep attention.
share. • Executive Summary: 1-2 page
• Investors: Focus on reliable financial forecasting. • Table of Contents: Clearly organize sections and page numbers.

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SUMMARY
1 Fundamental knowledge and practical tools
Design, evaluate business models, and create feasible business plans.

2 The role of business models

Create, deliver, and capture value from the market

3 Popular business models

Canvas, Unbundling, Long Tail, Freemium, D2C, Platform, Lean startup.

4 Building a business plan

Understand the requirements, from defining the market and conducting a competitive analysis to financial planning

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