TECHNOLOGICAL UNIVERSITY OF THE PHILIPPINES - CAVITE CAMPUS

CARLOS Q. TRINIDAD AVE., SALAWAG, DASMARINAS CITY, CAVITE

DEPARTMENT OF INDUSTRIAL TECHNOLOGY

BET6-TECHNOPREUERSHIP

TOPIC: BUSINESS MODEL DEVELOPMENT

GROUP 4:
CASTRO, LATRELL D.
LAROZA, JEALIAN KRIS L.
ROSALES, TRINA LOUISE R.

BET CT 4B

INSTRUCTOR:
MS. MYLENE BILIBLI

DATE:
OCTOBER 2024
 VALUE PROPOSITION

Reporter: Jealian Kris Laroza

I. What is a Value Proposition

A value proposition expresses why a customer should choose your products and
examines your company’s benefits. These are commonly associated with marketing
strategies, and while they are part of marketing, they also have a much larger influence on
both a company and its consumers. Good value propositions reflect on the “why” and “how”
behind a company. Why should a customer invest their time and finances into a company?
And how will a company solve a problem for a consumer and enrich their lives?

A value proposition refers to the value a company promises to deliver to customers

should they choose to buy their product. A value proposition is part of a company’s overall
marketing strategy – ALEXANDRA TWIN

A value proposition is part of a company’s overall marketing strategy, and it explains

the relevancy of the product—how it solves a customer’s problems, the quantified value—
specific benefits it provides, and its differentiation—why customers should buy from that
company instead of its competitors.”

It is a clear statement that offers three things:

 The Problem – What problem or need does your product solve?

 The Solution – How does your product solve the problem?
 Differentiation – What makes your product unique compared to competitors.

II. Value proposition benefits

Besides the prospect of gaining more customers, value propositions offer you and your
company many other benefits:

 Clear organizational direction

Developing a well-written value proposition factors into your overall business
plan. Before writing a value proposition, you must identify your target audience, your
company values, and what makes your company special. Answering these questions
will give you a foundation on which your company and its employees can refer to
with all future business endeavours.
 Strong customer base
Customers are looking for much more these days than just good products. In
fact, 79% of consumers develop deep connections with brands that share similar
values with them. Showcase your brand’s value and purpose, and customers will be
more likely to become loyal followers.
  Better marketing strategies overall
Lastly, crafting value propositions can aid you with finding success with other
marketing efforts, including email, social media, or SEO marketing. For instance, you
can use your value proposition in email marketing to attract customers and drive
traffic and sales.

III. Key Components of Value Proposition – FAB Framework

A strong value proposition is clear, communicates concrete results, and avoids hype. It
highlights key features, advantages, and benefits (FAB). Let’s break that down.”

 Features (F) – What’s included in the product? What does it do?

 Advantages (A) – What makes it better than the competition?
 Benefits (B) – How does it solve the customer’s problem or fulfil a desire? Benefits
often create positive feelings or offer relief.

To craft a strong value proposition, it’s crucial to make it easy for the customer to identify
their desire to purchase the product. For this, companies need to understand who their target
customers—or tribe—are.

IV. The Concept of the Tribe

The tribe refers to a specific group of people that the product is aimed at—those who
share similar interests, demographics, and needs. To craft an effective value proposition, a
company needs to know who their tribe is, what they want, and how the product can meet
those desires.

 Age, gender, income – these demographics help define the tribe.

 Hobbies, habits, communication styles – this gives insight into their customs.

Why does this matter?

 Build a Strong Foundation: Having a tribe creates a loyal customer base that
supports the business consistently. This group is emotionally invested in the brand,
which provides a solid foundation for business growth.
 Brand Loyalty: They form an emotional bond with the brand's values, mission, or
lifestyle, which makes them more likely to remain loyal over time.
 Word-of-Mouth Promotion: Members of a tribe are enthusiastic and likely to share
their positive experiences with others. This creates organic, word-of-mouth
promotion, which is a powerful and cost-effective marketing tool.
 Repeat Purchases: Tribe members are not just one-time buyers; they tend to make
repeat purchases because they feel a strong connection to the brand. This leads to
long-term customer retention and sustained business success.

V. Crafting a Value Proposition

  Identify your target tribe – Who are they? What do they want?
 Understand their desires – What problems do they have, and how does your product
address them?
 Describe your product – Clearly explain what you offer and for whom.
 Highlight the benefits – What benefits will your tribe get from your product?
 Differentiate from competitors – What makes your product better or unique?

VI. The Importance of a Unique Selling Proposition (USP) in Value Proposition

Unique Selling Proposition (USP)—the thing that makes your product stand out from
competitors. Every company has competitors, so identifying what makes your product
preferable to others is key. This requires focusing on a specific market sector, rather than
trying to be everything to everyone.

VII. Examples of Value Proposition

 Jollibee promises to provide high-quality food, fast and friendly service in

a clean and comfortable environment tailored to the Filipino palate. It is now the
biggest fast-food chain in the country.
 Lazada has unveiled its new brand proposition, “Add to Cart. Add to Life.”,
recognising that shoppers no longer simply buy products for functional purposes.
According to Lazada, this new brand proposition reflects its belief that eCommerce
can add to the lives of consumers by inspiring meaningful connections and
memorable experiences with their purchases. The new brand proposition will be
complemented with the launch of a curated interactive live content series, Laz Live+,
that aims to bring together recognisable, authentic and trusted experts to share fresh
tips and skills with shoppers.

Each of these value propositions focuses on solving specific customer needs, whether it's
affordable food, reliable connectivity, budget travel, or online shopping convenience, while
tailoring their message to the Filipino market.

VIII. To sum it up, a strong value proposition is:

 Concise – It gets to the point quickly.

 Specific – It focuses on the tribe’s desires and needs.
 Engaging – It captures attention and persuades the customer to choose your product.

REFERENCE/S:
 Lovely, M. (2019, November 18). Value proposition [Slide show]. SlideShare.
https://www.slideshare.net/slideshow/value-proposition-
194879522/194879522?
fbclid=IwY2xjawFo2mhleHRuA2FlbQIxMAABHU52TMcf17NecnIpElImSc
xlu82aZ9SXWdzHtIM1GN3wwLs61LBvyCcxQw_aem_Y5MalUYRtnatGZD
QLJOzTA
https://www.scribd.com/presentation/551341696/Technopreneurship-Module-4?
fbclid=IwY2xjawFo2mxleHRuA2FlbQIxMAABHY0AQHm1OUnE6UHWIj
9HX9kErH2PS6roZDP-D2MSr7poD7Rf-JdY-
hRpQg_aem_4ibpaEFqL8rndHGB0AYxlg
Streissguth, A. (2023). 8 Great Value Proposition Examples (+ 5 Key Takeaways).
Constant Contact. https://www.constantcontact.com/blog/value-proposition-
examples/?fbclid=IwY2xjawFo2-
NleHRuA2FlbQIxMAABHfB0HEhCBpr2zMdiABrYRh4RfoBv7A3hu_VMq
bY1XJlxpXYJSEAwMeEGEQ_aem_NwN5KD8O2lpg6LsBJOvRiw

BUSINESS MODEL

Reporter: Trina Louise R. Rosales

I. What is Business Model?

- A business model in technopreneurship is a strategic plan that outlines how a

technology-based venture will generate revenue and achieve sustainable growth. It
serves as a roadmap for the entire business, guiding decision-making and resource
allocation.

- This refers to a company’s plan for making a profit. It identifies the products or
services the business plans to sell, its identified target.

- Business models help you develop strategies for customer acquisition, talent
recruitment, key partnership alliances, and business development market, and any
anticipated expenses.

II. Business Model Vs. Business Plan

Business Model describes how an organization creates, delivers and captures value in
economic, social, cultural or other contexts.
 Business Plan is a document that details the organizations strategy and expected
financial performance for years to come.

The business model and the business plan are both key elements to an organization’s
development, growth and succession planning and decision making.

Business Model Business Plan

Core Concept A blueprint outlining how a company A comprehensive document

generates revenue and creates value for its detailing the company's
customers. goals, strategies, and
financial projections.

Focus The fundamental strategy and structure of A detailed roadmap for the
the business. business's future

Elements Value proposition, target market, revenue Executive summary,

streams, cost structure, key resources, key company description, market
activities, channels, customer analysis, organizational
relationships, and partner network. structure, product or service
description, marketing

and sales plan, operations

plan, financial projections,
and funding request.

Purpose Guides strategic decision-making and Attracts investors, secures

helps assess the viability of a business funding, and serves as a
idea. guide for internal and
external stakeholders

In essence, a business model is the foundation of a business, while a business plan is a

detailed blueprint for achieving that business model.

III. Key Components of a Business Model

1. Creating Value – everything it takes to make something.

 Design

 Raw Materials

 Manufacturing
  Labor

2. Delivering Value – everything it takes to sell that thing

 Marketing

 Distribution

 Delivering a service

 Processing the Sale

3. Capturing Value – how and what the customer pays

 Pricing Strategy

 Payment Methods

 Payment timing

IV. Business Model Canvas : A Visual Tool for Entrepreneurs

- The Business Model Canvas is a strategic tool used to develop, design, validate, and
visualize business models. It's a one-page diagram that provides a structured
framework for understanding and communicating a business concept.

- It was created by Alexander Osterwalder a Swiss Consultant, as a result of his PhD

thesis, entitled the Business Model Ontology, in which he researched different
business model definitions to create a single one.

V. How to use the Business Model Canvas

1. Brainstorm: Gather your team and brainstorm ideas for each of the nine building
blocks.

2. Fill in the Canvas: Write down your ideas in the corresponding sections of the
canvas.

3. Iterate and Refine: Continuously review and adjust your ideas based on feedback
and market research.

4. Visualize: Use the canvas to visualize your business model and communicate it to
others

The nine building blocks of the Business Model Canvas are:

1. Customer Segments: Define the different groups of customers your business serves.
 2. Value Propositions: Describe the benefits your product or service offers to your
customers.

3. Channels: Outline the ways you reach and deliver your value propositions to
customers.

4. Customer Relationships: Explain the types of relationships you build with your
customers.

5. Revenue Streams: Identify how you generate revenue from your customers.

6. Key Resources: List the most important assets needed to operate your business.

7. Key Activities: Describe the most essential actions your business performs.

8. Key Partnerships: Identify the strategic alliances or partnerships that support your
business.

9. Cost Structure: Outline your business's most significant costs.

References:

Mica L. Solano (April 06, 2023), Business Models: What is Business Model? ,
https://www.scribd.com/document/636424646/Untitled

Julius Mark Viray (July 03,2023), Technopreneurship 101: Business Model,

https://www.scribd.com/document/656910198/4?
fbclid=IwZXh0bgNhZW0CMTAAAR0ivMalPcVcKP5owOtBkztoyyh6AJLj7vUbJLj
Z7X0xHwC2nyOqETrtznA_aem_Bg9Ytg3D_7I4gQt-7H5JHw

Kasiviswanathan M (March 16, 2023), Business Model Canvas,

https://www.linkedin.com/pulse/business-model-canvas-kasiviswanathan-m

Reporter: Latrell D. Castro

5. Revenue Streams
This section calculates how much money a business makes from every group
of customers. Consider the price points that each consumer category is willing to
spend when targeting them. You may develop several income streams that target to
each of these categories once you recognize that different consumer groups have
 varying payment thresholds. There are only four kinds of revenue streams in a
company model:

a. Transaction Revenues – This result from customers who make one payment for a
product or service. Examples are SM-Supermarket, Ford, American Airlines,
Starbucks, Grab

b. Recurring Revenues – These ongoing payments can include a prolonged value

proposition or post-purchase customer service. Examples are Netflix, Google Ads,
Lazada, Shopee

c. Service revenue - Revenues are generated by providing service to customers and are
calculated based on time. For example, the number of hours of consulting services
provided. Examples are Accenture, McKinsey, Outsource Accelerator

d. Project revenue - Revenues earned through one-time projects with existing or new
customers. Examples are Betchet, MDC, Megawide

Consider the following when choosing a revenue stream for a particular consumer
segment: How are they already paying? In what way do they want to pay? Does a
certain income stream contribute to total profits?

6. Key Resources

Which essential resources might make your company stand out from the
competition? Which assets are essential to delivering your value proposition? The
significant resources that are at your disposal and necessary to the achievement of
your company strategy are known as key resources. With the help of these tools, you
may develop your own value proposition, keep up vital client connections, expand
into new areas, and generate income. These resources could be in the form of human,
financial, intellectual, or physical resources.

The first four blocks should be carefully considered while creating your Key
Resources section. Any recognized theories up to this point will need a thorough
accounting of your resources; if you lack the means to provide value, there is none.
Having said that, a lot of the materials will be clear and may not require much
discussion. Big choices, like buying a piece of real estate, should be carefully
considered.

A. Physical – Buildings, vehicles, machines, raw goods, etc.

B. Intellectual – Brand, proprietary knowledge, patents, partnerships, etc.

C. Human – Creativity, experience, etc.

D. Financial – Cash, credit, stock, etc.

 7. Key Activities

The important processes that a company must follow in order for a business
model to succeed are outlined in the key activities building block. These actions are
necessary to keep up client connections, expand into new markets, develop value
propositions, and generate revenue—much like essential resources. Three categories
can be used to classify important activities:

a. Production: This core set of operations, which includes developing, making, and
delivering products, is the emphasis of manufacturing companies.

b. Solving problems: This includes knowledge management and instruction. Coming

up with novel solutions to client problems requires the ability to solve difficulties.

c. Platform/Network: This area covers service positioning, platform marketing, and

platform administration. This is based on a business that uses software, networks,
and brands that may serve as platforms.

8. Key Partnerships

The building block of key partnerships revolves around the network you build. This
can include suppliers, partners, or even other businesses in your industry to create an
alliance with. There are 4 main categories of partnerships:

a. Strategic Alliances with Non-competitors

b. Strategic Partnerships with Competitors

c. Joint Ventures to create new Businesses

d. Buyer-Supplier Relationships

With these 4 categories of partnerships, we find 3 main motives:

a. Economies of scale and optimization - This cost-cutting goal may entail pooling
infrastructure or outsourcing. This maximizes the distribution of resources and tasks
so that your business isn't dependent on having all the resources or doing all the tasks
internally.

b. Decrease in Risk and Uncertainty - This incentive stems from rivals forming strategic
partnerships in one domain while maintaining their competitiveness in other domains.

c. Acquisition of Activities and Resources - It is uncommon for any company to be able

to get all of the activities and resources required to provide the most value to its
 clients. Understanding which assets may be outsourced more affordably and
depending on other companies to provide resources that you

9. Cost Structure

Every expense related to running a company model is outlined in the cost structure
building block. Your company will incur expenses at every stage as it determines how to
produce revenue, retain customers, and create value. A business's cost structure may be
classified into two types:

a. Cost-driven - The goal of this cost structure is to keep expenses as low as feasible.
High levels of automation, widespread outsourcing, low-cost Value Propositions, and
the most economical cost structure are all achievable in this process.

b. Value Driven - A company that adopts a value-driven cost structure concentrates on

finding the optimum value for each client group. A highly customized service and
premium services may be examples of this.

Key Components of Cost Structure:

a. Fixed Costs

b. Variable Costs

c. Economies of Scale

d. Cost Allocation

e. Cost pool

f. Economies of Scope

TYPES OF BUSINESS MODEL

1. Retailer Business Model

A retailer is the last link in the supply chain. These companies buy products from
producers or wholesalers and then resell them to consumers for a profit after deducting costs.
Retailers may stock a variety of goods or focus on a certain market niche.

Examples: Grocery shops, pharmacy, florists, and other establishments that you likely use
daily are all merchants.
2. Manufacturer Business Model

A manufacturer processes raw resources into finished goods. After that, they sell the
goods to retailers, wholesalers, or customers directly.

Examples: Manufacturing companies, for instance, produce anything from furniture to

medications. These might be businesses of any size operating in nearly any sector.

3. Fee-for-Service Business Model

A fee-for-service model is when a company charges a predetermined amount for a

certain service. A company using this strategy can boost its revenue by taking on more clients
or by raising its prices. Depending on the nature of the task, the company may bill on an
hourly, monthly, or commission basis. It could also provide a schedule of fees with
predetermined amounts for certain services.

Examples: Real estate brokers, accountants, and hair stylists all charge for their professional
services. They could operate on their own or as part of a salon, office, or brokerage that offers
resources in return for a cut of their revenue.

4.Subscription Business Model

E-commerce companies as well as conventional brick and mortar retailers can benefit
from using a subscription business model. In essence, the client pays on a regular basis to
have continuous access to a good or service. A business may charge you for its services or
ship its goods straight to you through the mail.

This enables businesses to charge customers for access to their product or service on a
monthly or annual subscription basis. This business model relies on these customers being
loyal to and using the service. To maintain customer satisfaction and monthly subscription
payments, businesses must continuously enhance their offerings to stay ahead of evolving
market trends or rivals.

Examples: Disney Plus, Netflix, and Spotify.

5. Leasing Business Model

In a leasing model, a firm purchases a good from a vendor. After then, for a recurrent
price, that business permits another firm to utilize the goods that they bought. Although some
businesses also lease smaller products, leasing arrangements work best for expensive items
like industrial and medical equipment.

The product-as-a-service business model and leasing are comparable; however, leases
often have longer terms—days or weeks as opposed to minutes or hours. It is improbable for
leasing firms to impose a membership or subscription fee in exchange for product access.
Example: A company that uses a leasing business model lends out equipment to individuals
for their home building projects, such as backhoes, augers, and dozers.

6. Franchise Business Model

A franchise is a pre-existing company model that a franchisee buys and duplicates. In

order to make sure the business runs as it should, the franchiser, or original owner,
collaborates with the franchisee to assist with finance, marketing, and other business
operations. A portion of the franchisee's profits are paid to the franchisor in exchange.

It gives one the feeling of working for themselves with the extra security of a
company's support and well-known brands and goods. The owner of the parent firm, the
franchisor, and the franchisee are parties to a legal and business relationship. In return for
paying a royalty fee, the franchisee is permitted to market the franchisor's goods and services.

Examples: Ace Hardware, Domino's, and Anytime Fitness.

7. Distribution Business Model

Distribution companies oversee bringing manufactured items to consumers.

Distributors purchase the goods in large quantities and resell them to retailers at a higher cost
to profit.

It makes it easier for customers to get goods or services that producers provide. By
using this approach, the company guarantees that the most direct and, more significantly,
economical method of distribution is used to bring the good or service to the customer.

Examples: Pharmacies, Restaurants, Grocery Store

8. Freemium Business Model

Customers who utilize a product or service under a freemium model can access more
sophisticated features only after paying for them. In the software-as-a-service industry, this
model is popular. Spotify, for example, offers a free tier that is ad-supported, but members
may listen without advertisements.

The terms "free" and "premium" are combined to form "freemium." Businesses that
use the freemium business model provide the most basic form of their good or service for free
to persuade customers to buy later the more sophisticated features, functionalities, or add-ons.
For startups, the freemium business model is effective because it fosters close bonds with
clients. Additionally, internet-based service providers benefit most from it.

Examples: LinkedIn, Drop Box, Spotify

9. E-commerce and Peer-to-Peer Business Model

Businesses and people use electronic commerce, or "e-commerce," as a business

model in which they purchase and sell goods and services online. The company offers almost
infinite items and services because it is fully online. Companies can enjoy the added ease of
not requiring a physical store by operating an e-commerce firm. This broadens the range of
items that customers may choose from.

A business serves as a middleman between companies and clients looking to buy their
goods or services in a peer-to-peer business model. The businesses that employ this model
determine the prices for the goods and services, manage the legal requirements, and supply
the platforms.

Examples: Joyride, Angkas, Uber, and Grab.

10. User-Generated Content Business Model

A platform for distributing material where people provide the content is known as a
user-generated content business. Creating content is no longer necessary as the main strategy
to keep people interested in this paradigm. Another kind of business model that is frequently
coupled with the advertising model is this one.

Examples: Instagram, Facebook, TikTok, X(Twitter)

Other Business Model

a. Direct Sales Business Model

b. Affiliate Marketing Business Model

c. Drop-Shipping Business Model

d. Vertically Integrated Business Model

e. Consulting Business Model

f. Ad-Supported Business Model

g. Enterprise Business Model

h. Lock-In Business Model

i. Multi-Brand Business Model

j. Pay-As-You-Go Business Model

References:

https://online.hbs.edu/blog/post/startup-business-models

https://animasmarketing.com/9-building-blocks-business-model-canvas/

https://accilium.com/en/9-building-blocks-for-a-profitable-business-model/

https://www.nerdwallet.com/article/small-business/what-is-a-business-model