INSTITUTE OF TECHNOLOGY OF CAMBODIA

FACULTY OF CHEMICAL AND FOOD ENGINEERING

DEPARTMENT OF FOOD SCIENCE AND TECHNOLOGY

Subject: Entrepreneurship

Assignment topic: How to apply the Business model canvas on

software company

Lecture in charge : Dr. Yoeun Sereyvath

Class: FC-GCA-08
Group A-3
Student: Mr. Chea Pheaktra
Ms. Chea Sokhai
Mr. Soun Vannhak
Ms. Lanh Lyda
Ms. Dy Nalin

Academic year: 2022-2023

 TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................................ 2

I. INTRODUCTION .................................................................................................................. 3
1.1. Overview of The Business Model Canvas ...................................................................... 3
II. THE APPLYING PRINCIPLES OF THE BUSINESS MODEL CANVAS TO THE
SOFTWARE COMPANY ......................................................................................................... 4
2.1. Conduct Customer Segmentation .................................................................................... 4
2.2. Choose Key Partnerships ................................................................................................ 4
2.4. Sketch Out Key Activities ............................................................................................... 5
2.3. Find Relevant Revenue Streams ..................................................................................... 5
2.5. Describe Your Value Propositions .................................................................................. 5
2.6. Outline Distribution Channels ......................................................................................... 6
2.7. Identify Key Resources ................................................................................................... 6
2.8. Choose a Customer Relationships Strategy .................................................................... 7
2.9. Classify Cost Structure .................................................................................................... 8
III. BENEFITS AND DRAWBACK OF TOTAL QUALITY MANAGEMENT .................... 8
3.1. Benefits of The Business Model Canvas......................................................................... 8
3.2. Drawback of The Business Model Canvas ..................................................................... 8
I. INTRODUCTION
1.1. Overview of The Business Model Canvas
The Business Model Canvas is a visual template for identifying and organizing
different elements of your business model. It’s divided the canvas into nine sections, each
responsible for the most vital business elements of every organization. With the abundance of
methodologies for building a business model, there must be something really special about the
Business Model Canvas that has earned it a place among the classic tools.

Figure1: Scheme diagram of Business Model Canvas

II. THE APPLYING PRINCIPLES OF THE BUSINESS MODEL CANVAS TO THE
SOFTWARE COMPANY
Software business will be launched through the supermarket smoothly, they have nine
principles strategy for applying on software products. To start with a business model canvas,
we will need: a small group of people, a board or a large sheet of paper, markers and sticky
notes, and up to an hour of time. When we have gathered everything, it’s time to map out.
2.1. Conduct Customer Segmentation
Our customers are going to dictate how our business operates every day. By
knowing and understanding our customers, we’ll be able to define the core of our business –
the Value Proposition. For instance, our company is a software company, so our customer
segments can vary from private individuals to global organizations, and they all require
different types of relationships, distribution channels, and payment options.
Besides that, there are some customer groups that should be considered for a software business:
Used apps and software. technographic segmentation defines what devices, mobile apps, and
desktop programs your customers most frequently use. That will let you know how clients with
different devices experience your product and you’ll be able to tailor your content specifically
to their needs. Since technology is now a massive driver of occupations and lifestyles, this is
pivotal for understanding your target audience.
Top purchases. It’s no secret that half of freemium game revenue comes from 0.19 percent of
mobile gamers. Despite the majority of users keeping up with their free plans, a freemium
model still allows companies to drive revenue. Make sure we know the motivations of the
people who are bringing us the biggest value but don’t overlook those who don’t spend a penny
but watch our ads and contribute to the overall traffic.
Visitor tiers. users behave differently depending on how many times they’ve already used our
product. Just like with the device type, we can customize personal experience depending on
whether they explore our product via guest mode or log in.
2.2. Choose Key Partnerships
This building block defines your network of partners and suppliers that make your
business model work. Bear in mind that not all your partners are your Key Partners. There are
four categories of partners you can identify.
Buyer-supplier is the most common type of business relationship that implies exchange of
desired goods for both sides. It means a reliable source of supplies for you and a confirmed
buyer of their products or your partners.
Strategy alliances between non-competitors: the idea behind this partnership is to leverage each
other’s resources. As a startup, we can collaborate with many different suppliers until we
decide which ones support our business model best.
Joint-ventures are created when we need to fill the gap that only another business can fill, for
instance, sell your product to a new niche. When we’re partnering with a company that has a
missing element you require, it helps us grow your audience and increase sales.
Coopetition is a partnership between competitors. It usually happens when both companies are
struggling to launch a product and want to spread the risks to achieve common revenue.
 2.4. Sketch Out Key Activities
Key Activities are what a company should do to make its business model work.
For a food delivery service, it would be getting the freshest ingredients for the best price,
preparing meals, organizing a call-center or a website, hiring couriers, etc. But in case we’ve
developed an app that just gathers and transfers pizza requests, we have another set of actions
such as supporting an app, organizing fast and seamless connections with partners,
automatically updating menus, etc.
2.3. Find Relevant Revenue Streams
Revenue streams are a company’s source of cash flows. They are the final element
of the business model canvas template. Revenue streams are the different ways your company’s
value proposition generates money. A company might have multiple revenue streams. A
strategy that goes into identifying and managing your Revenue Streams is called a Revenue
Model. Here are some of the revenue models that may work for us.
Advertising has fueled the growth of platforms such as YouTube, Twitter, Google, and
Facebook, as well as many other free-to-download apps and services. Yes, Internet consumers
tend to block adverts, but organizations discover ways to maintain them, from simply
requesting that AdBlock be removed to curating extremely relevant ads.
Affiliate promotion. This strategy is centered on commissions earned from referring other items
and services to our target audience. The trick here is to choose merchants in our industry and
only propose things that we believe will benefit our users.
Subscriptions. This model would be the best fit for our company. It also applies to on-demand
streaming services like Netflix, Spotify, and any other online publisher.
Sponsorship. Donations may be an option if you're a small team of developers offering a
valuable, engaging, and preferably distinctive service.
Freemium. It's no surprise that this paradigm is widely employed by a variety of web services.
By attracting an audience to the basic set of services, you can provide premium features to
paying customers (another Customer Segment).
Fee-based. This approach necessitates a large number of customers who value the service
enough to pay a little cost. These fees can be either percentage-based or flat-rate, making it
simple to calculate income.
2.5. Describe Your Value Propositions
The Value Proposition is the reason for a customer to buy your product. A good
Value Proposition is a unique combination of features that will either solve a customer’s
problem or bring them additional value. The Value Proposition should be short. Make sure
both of us and our users can read it in less than 5 seconds and clearly understand what our
product is all about.
 2.6. Outline Distribution Channels
The Channels factor illustrates how a company intends to deliver value to its
customer segments. However, Channels can also increase brand awareness and provide post-
purchase customer assistance.

Increasing awareness. We can inform potential customers about your goods via a variety of
methods. At the moment, blogging and social media are the most effective ways to reach
individuals who want to listen. Content marketing requires significant effort, especially if you
want to produce great content on a regular basis, but it encourages consumers to engage and
share content willingly. Word of mouth is the most effective means of reaching the most
relevant and likely-to-purchase audience. It is, nevertheless, the most difficult to scale.

We are assessing our Value Proposition. How can customers benefit from your proposition?
They require practical experience. Don't forget to walk them through a product to ensure they
got the intended value or realized its potential. Case studies and reviews could also be used to
help clients comprehend the value before they open their wallets.

Methods of purchase. Because we're talking about software, your customers will almost
certainly purchase your goods online. If you're creating a mobile app, it should be easy for
customers to find you on the App Store or Play Market.

The goods are being delivered. Although a software product does not require logistics or a
sophisticated delivery process, you must nevertheless ensure that your program has been loaded
successfully and is functioning properly.

After-sales service. Customers are particularly interested in this stage. What is the refund
policy? How do people get in touch with you if they have an issue or a question? What exactly
is the onboarding procedure? Many software providers now use chatbots or simulations as part
of their post-purchase channel.

2.7. Identify Key Resources

Key resources play a direct role in creating your Value Proposition, delivering a
service to your Customer Segments, and supporting Customer Relationships. Resources are
typically categorized into four assets: physical, intellectual, human, and financial.

Physical resources include buildings, facilities, and vehicles, as well as any other tangible
resource such as hardware or a cooling system. In the case of a software product, it also relies
on the type of delivery asset required: whether you must own physical assets or source them
from a cloud provider.

Human and intellectual assets are considered to be the most valuable assets in a software
company. Patents, copyrights, licenses, and customer knowledge are examples of intangible
(intellectual) resources. On-premise or cloud services that you use for your organization are
likewise a type of intellectual resource.

In terms of human resources, any service-based business's software engineers, marketing

professionals, and customer service reps are all valuable assets. However, it is also the most
expensive. Consider outsourcing the services you can, keeping accounting and legal
consultants in mind.

Startups can obtain financial resources in a variety of ways, including bank loans, advances
from important clients, and venture capital investors. If your company is dedicated to a worthy
cause, you can apply for a grant or launch an online crowdfunding campaign.

2.8. Choose a Customer Relationships Strategy

Personal assistance is available. Make it possible for your customer to reach us at any time
before or after the purchase, and make the contact channels as numerous and accessible as
possible: via e-mail, phone, or chatbot. Dedicated client care professionals are one way to
customer relationships.

Self-service. This type of engagement is frequently maintained for clients. we don't normally
contact with your users in this circumstance, other from automated updates and onboarding
instructions.

Service that is automated. This is how Netflix and Spotify keep in touch with their customers.
The services emulate human contact and keep clients interested by giving AI-powered movie
and playlist recommendations.

Communities. A corporation can develop a community around a product or brand where people
can exchange expertise to better understand their customers' difficulties and facilitate
relationships amongst users.

Co-creation. The modern web includes user-generated material. Anyone who has posted a
video to YouTube has rendered a service. In this situation, the company's responsibility is to
exactly match content creators with content consumers.
 2.9. Classify Cost Structure
The cost structure refers to how a company spends money on operations. It
consists of the company’s key costs and the company’s level of focus on costs. If a company
is cost-driven, it focuses on minimizing costs and, thus, prices for customers. Alternatively, if
a company is value-driven, it focuses on creating value for its customers, with less focus on
cost.

III. BENEFITS AND DRAWBACK OF TOTAL QUALITY MANAGEMENT

3.1. Benefits of The Business Model Canvas

❖ A good business models gives the company a competitive edge in the industry.
❖ A strong business model provides the company good reputation in the market place
encouraging the investors to remain invested in the company.
❖ Making the business model strong leads to an ongoing business profit leading to
increase in cash reserve and new investments.
❖ Proven business model brings a financial stability in the organization.

3.2. Drawback of The Business Model Canvas

❖ Once a business model is created, then it restricts to implement new ideas for the
product.
❖ Creating a business model is time consuming as lot of factors needs to be considered.
❖ There might be a chance that business model may turn out to be inaccurate

Apart from the disadvantages, business model is mandatory to be prepared before starting of a
new project.