Value proposition
Once we have determined the target groups we are focusing on, we can move on to the next element of the model. The value proposition is the set of products and services that the company wants to offer to customers in a way that meets their expectations and differentiates itself from the competition.
Channels
The element that connects the product/service with the customer are the channels:
communication - the medium or support by which information is transmitted between sender and receiver.
distribution - the path by which a product is transferred from the manufacturer to the final customer.
sales - the way a company reaches customers and completes business transactions.
They indicate how the company delivers the value proposition to specific customer segments. When analyzing this element of the business model, it is useful to answer the questions of how to relate to customers and what channels should we use to reach them most effectively.
Another element included in Osterwalder's model is customer relationships. These must be clearly defined to effectively acquire and retain repeat buyers. Depending on the specific customer segment, their level of engagement, trust, and communication and interaction, the type of relationship can vary from personal to fully automated.
Revenue streams
The main motivation for starting your own business is to make money. In exchange for the value provided to customers, the business earns revenue. To ensure a steady stream of revenue, the business must answer the question of what value and how much customers are willing to pay. When designing this part of the model, the entrepreneur must consider what value proposition the target audience will be willing to pay for. The next step is to determine the preferred method of payment. Depending on the nature of the product or service offered and customer preferences, possible options include retail, wholesale, rental, barter, and many others.