Value Exchange Mapping SystemGUIDE

Capturing Business Model Interactions

We have developed a new tool called the Value Exchange Mapping (VEM) System that works with the Business Model Canvas to provide a kind of “stereo vision” with respect to the business model.

Specifically, a VEM captures the value exchanges among the players in a value network in the context of an organization’s business model. This provides a more comprehensive picture of the business model making it easier to identify opportunities for business model innovation. The VEM mapping system is licensed under the Creative Commons and is available for download and use.

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-nd/4.0/deed.en_US.

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Value Exchange Mapping: Capturing Business Model Interactions

Linked In

Linked In

Free Members

90%

Premium Members

10%

Recruiters

Advertisers

Employers

Sales Professionals

Developers

Targeted Marketing Solutions

Talent Management Solutions

Recruiter Solutions

Targeted Sales Solutions

Professional Profile

Company Pages

Linked In Groups

Premium services (on top of basic)

Resume Builder

Linked In Updates

Linked In Connection Management

Members

Linked In TodayTargeted Job Recommendations

Targeted content recommendations

InMail AccessView Profiles Outside NetworkJob Seeker PremiumViewed Profile?Other Advanced...

Content Exposure

Sticky Content Platform

Apps

Access to PlatformContent

Publishers

Value Exchange Map

Growth Strategist

Other Social Platforms

Integration

Strong Same Side Network Effects

Subscriptions

Basic Services

Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Linked In

Web

Direct Sales Force

Free Members

Premium Members

Recruiters

Advertisers

Employers

Sales Professionals

Mobile Apps

Sign In with Linked In

Sites

Premium member

subscriptions

Developer Apps

Advertising solutions

Recruiters solutions

Employersolutions

Sales solutions

Build & manage professional

Identify Build & manage businesscontactsAccess to info &

knowledge to advance career Career

management

Targeted access to talent pool

Targeted access of business

professionalsCompany

exposure & talent mgt.

Targeted sales lead generation

Linked Inplatform

Linked Inplatform

development

Platformoperations

Direct salesforce

AppDevelopers

ContentPublishers

Sales & marketing

Link In members

Data center infrastructure

Apps

Other social media

platforms

Research & development

Content management &

monitoring

Promotions & advertising

Sales & marketing Research &

developmentactivitiesLinked In

platform development

Angie's List

Affiliates

Consumer Review Database

Angie's List MagazineBig Deal Notifications

Call Center SupportComplaint Resolution

Sign-up Fees &Subscription Fees

Free Listing

Advertising

Big Deal Promotions

Storefronts & e-Commerce ServicesAngie's List

6-12 Month Campaigns

Add Businesses

Subsidize

Subscription Fees

40% of Sale

60% of Sale

Reputation Management Tools

Reliable & High Quality ServicesProducts from Reputable Businesses

Revenue from Delivery of Products/Services

General Consumers

Homeowner Consumers

More Customers

Home Service Providers

Medical Service

Providers

Auto Service Providers

Other Service Providers

Small Businesses

More Members

Commissions Per Sign-up

Value Exchange MapGrowth Strategist

Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Angie's List

Homeowner Consumers

General Consumers

Home Service Providers

Medical Service Providers

Auto Service Providers

Other Service Providers

Hire the best service

providersAuthentic &

detailed reviewsComplaint

resolutionLive phone

supportDiscounts

Advisory information

Promote business

Get quality customers

Generate revenue

Build & manage

reputation

Direct viaWeb

Live support via call center

Affiliates

Platform

Call center

Sales & marketingPhone support

Complaint resolution

Platform development & maintenance

Generating content

Platform development

staff

Data & Infrastructure maintenance

Commissions for member

Sign-ups

Sales & marketing

staff

Sign-up fees&

subscriptions Advertising

e-Commerce services

Commissions on promotionsCall center

Business Model Canvas

MobileApps

37+ Million subscribersLeader in categoryS&P 500 (June 30th, 2013)#629 Fortune 1000 (2013)

Revenue: $3,609.282Gross Profit: $983.416Operating Income: $49.992Net Income: $17.152

Subscription revenue modelLong-tail business modelBroker/reseller model

General Info Business Model ThemesFinancial Picture (2012) Growth TrajectoryIncrease subscriber base with original content exclusive to Netflix; expand into international markets

Netflix is the leading Internet television network for movies and TV shows with nearly 38 million members in 40 countries. For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen without commercials. NETFLIX

[Value Exchange Map]

Distribution Rights

DVD's

Content Providers

Ads

Right to Sell Streaming Content

Customers

VP

��'.�+

Streaming Content

DVD Content

Advertisers

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Content Production

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Streaming Content

Viewing Behavior

Advertising Fees DVD Jackets

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Subscription �

Subscription �

% Sales �

License Fees�

% Sales

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�Production Companies

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Original Content

Intermediary Parters

[Apple, Sony, etc.]

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DVD Postage

DVD Delivery

Reach Customers

Growth Strategist

Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Netflix

DVD Customers

StreamingContent

Customers

Advertisers

Self-servicevia Web

Customerhomepage

Website

Video gameconsoles

iOS Apps

Content hubs(ex: AppleTV)

Mail

DVD plan subscriptions Streaming plan

subscription Advertisingfees

Flat rate DVD rental via

mail

No late feesunlimited #

turns on DVD's per plan

All you can stream videoNo commercials

Stream video on a number of

devices

Broad exposure of ads to

customers

Processing DVDorders

Streaming digital content

Content licensing

Producing original content

Technology development

Customer viewing

suggestions

Technology infrastructure

Licensed content

Original content

Customer viewing

behavior data

Knowledge of what content will be popular

Post office

Content providers

Content production companies

DVD mailing fees

DVD order processing

costs

Content licensecontracts

Cost of producing

original content

Data equipment, facilities &

staff

Business Model Canvas

35+ million subscribersLeader in categoryActive in 48 countries#851 in Fortune 1000 (2013)

Revenue: $2,334.472Gross Profit: $1,615.532Operating Income: $98.701Net Income: $-54.773

Collective buying modelBroker/reseller modelFinancial intermediary Model

General Info Business Model ThemesFinancial Picture (2012) Growth TrajectoryExpand goods business; physical warehouses for faster shipping;Groupon Reserve (capacity mgt);POS Apps and merchant services

Groupon is a marketing service that helps businesses attract customers by offering deep discounts on things to eat, see, and do in more than 500 markets worldwide. Groupons leverages collective buying power to guarantee businesses a minimun number of customers.GROUPON

[Value Exchange Map]Growth Strategist

Launch Deals at 50-90% Discount (Usually 50%)

Daily Deal �*.&2 �.&*)-

Guaranteed Number of Customers

50% of Revenue �

Merchant Consultation (Design Deals)

Customer Intel

VP

Groupon

Join Deal Group & Commit Payment

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Deal Activates (Minimum Number of Customers Reached)

More Potential Customers

Heavily Discounted Products & Services

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Capture 100% of Payment

Groupon

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Local Offers

Local Offers

Local Offers

Group of Buyers

MerchantsDeal Cancels; No One Charged

ElsePayout Over 3 Months

Groupon customers will spend aboveMerchant Value Capture Assumptions

Groupon customers will come back and pay full priceWord of mouth referrals will generate new customers

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Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Groupon

Consumers

Automated Direct via Web

and email

Small Businesses

Mobile Apps

Help businesses attract new customers

Guaranteed # of customers per daily deal

Daily deal notifications

Commissions on sale of daily

deals

Groupon Apps & Web

platform

Sales & marketing

Platform & app development

Technology operations

IT development

staff

Sales & marketing

staff

Discounts of 50%-90%

Groupon is guaranteed

POS solution &credit cardprocessing

Direct via Sales & Marketing

TeamMerchant

center

POS & Credit card processing

services

Reservation system??

Credit card clearing houses

SpotifyValue Exchange Map

Free service

Unlimited service

Premium service

Advertisers

Distributor / aggregators

Large music labels

Merlin Network

ISP's

Platform Operators mobile

operators

Consumer electronics companies

SpotifyReach customers

Royalty fees

Right to distribute music

Targeted exposure (free users)

Revenue from advertising (Free users only)

$4.99/month

$9.99/month

Partners

Increase utility value of product or service Growth Strategist

Add usersSubsidized

Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Spotify

Free

Unlimited

Premium

AdvertisersTarget by

demographicsTarget by location &

music genre

Tracking & reporting

portal

Customers not hostile to

advertisement

Distributor /aggregators

Large music labels

Delivery platform

developmentContent

licensing & reporting

Merlin Network

Mobile Operators

Consumer electronics companies

ISP's

Huge catalogue of big music & Independent

Platform Operators

Deliveryplatform

Listen to music on any device

Social media integration

download & listen to music

off-line

Unlimitedsubscriptions

Premium subscriptions

Advertising revenue

(free users only)

ITinfrastructure development

Analyze customer behaviors

Knowledge of customer

listening prefs

Infrastructure maintenance

Royalty fees

Business Model Canvas

Direct viaWeb

Whole Foods Market

Purchases

Lifestyle Grocery Brand (Customer Pull)

Affluent Social

Shoppers

Healthy Lifestyle Shoppers

Values-based Shoppers

Unique Shopping Environment

Happy, Friendly and Knowledgeable Staff

Elagent/Artistic Stores

Coffee Bar, Bakery and Eatery (Large Selection)

Customer-centric AttitudeCustomer Service #1

In-store Cooking Exhibition & Food SamplingSamples Throughout Store

Fresh Juice Bar

Produce & other items meticulously displayed

Eating/Socializing Areas

Grocery Products

Quality Standards & Values

Producers

Distributors

Supplier Partners

Organic Certifiers

Fair Trade Certifiers

Other Partners

Social Responsibility

Certifiers

Sustainable Practices Certifier

Grocery Products

Purchases

Various Services

PurchasesSpecialty Service Providers

Support

Whole Foods

Market

Custom Services

Supply Chain Compliance to Standards

Consumers

Value Exchange MapGrowth Strategist

Cost Structure

Customer SegmentsCustomer Relationships

Channels

Key Activities

Key Resources

Key Partners

Revenue Streams

Value Propositions

Whole Foods Market

Healthy Lifestyle Shoppers

Affluent Social

Shoppers

Values-based Shoppers

Personal interaction in

stores

In-Store purchases

Producers

Distributors

Specialty service

providers

Certifyingorganizations

Onlinepurchases

Delighting customers

StoresCustomer centric culture

Store design

StockingProducts for

storesOutsourcedservices for

storesStore

operations

High qualityproducts

(certified)

Building outnew stores

PurchasingSupply chainmanagement

(win-win)

Store Amenities

High qualitynatural &

organic productsDelightful shopping

experienceCertifiedquality

standards

Localcommunity

support

Adhere toSustainablepractices

Progressiveorganizationalculture & values

Business Model Canvas