BUSINESS CANVAS MODEL

Business Canvas Model of Facebook

Contents

Summary: 3

Introduction of Business Canvas Model 3

Components of Business Canvas Model 4

Customer segments. 4

Value proposition. 5

Channels. 5

Customer Relationships. 5

Revenue streams. 6

Key resources. 7

Key activities. 7

Partner network. 7

Cost structure. 7

Critical Evaluation of the Company’s Model 8

Conclusion. 9

References: 10

Summary:

The business canvas model of any company provides the real picture of its operations and business phases. This would allow the better understanding about the company in terms of its individual key business functions. The current report on Facebook Business Canvas Model helps in making assessment about the company in terms of representation of its cost structures and revenue streams and so on. The model suggests that the company has been working closely with its partners in bringing the user engagement as well as development of its data centers. The current megabytes or petabytes of its users or clients would allow the firm to predict its storage and computing needs.

Introduction of Business Canvas Model

The business model would allow the firms to draw a complete picture of their business processes. Such models are utilized for making the classification as well as describing the various business operations in entrepreneur capacities. The information of these models is also utilized by the internal managers in exploration of future possibilities for their business. The significant business models could be operating as an ingredient for the managers to be served in the business environments. The business models are also used as a reference in many of the business instances as well as serving as a purpose of making public reports.    (Breiby & Wanberg, 2011)

The definition by Al-Debei and Avison (2008) shows that esteem suggestion, esteem building design (the authoritative base and innovative structural engineering that permits the development of items, administrations, and data), worth account (demonstrating data identified with aggregate expense of proprietorship, estimating systems, and income structure), and esteem system verbalize the essential measurements of plans of action. A plan of action is a “theoretical representation of an association in all of its interrelated co-operational, and money related plans in the blink of an eye.

The writing has given extremely differing translations and meanings of a plan of action. In principle and practice, the term plan of action is utilized for a wide scope of casual and formal portrayals to speak to center parts of a business, including reason, business procedure, target clients, offerings, methodologies, base, hierarchical structures, sourcing, exchanging practices, and operational procedures and arrangements including society. A deliberate audit and examination of administrator reactions to a study characterizes plans of action as the outline of authoritative structures to authorize a business opportunity. Further augmentations to this configuration rationale stress the utilization of story or lucidness in plan of action depictions as instruments by which business people make uncommonly effective development firms.

Facebook is termed to largest organization that is utilizing the Social Networking Site (SNS) in the world. The mission of the company is to broaden the geographical boundaries of the world and connects more people.  The facebook has been able to built a multi sided platform for linking its value propositions with different segments of the customers.

Components of Business Canvas Model

Customer segments

It assists them with discovering and takes in more about what is happening in their general surroundings. Facebook offers Internet clients some assistance with staying associated with their companions, families, and partners. It assists them with sharing to express themselves their feelings, thoughts, photographs, and exercises. include: Timeline, News Feed, Photos and Videos, Messages (Email, Chat, Text Messaging), Groups, Lists, Ticker, Notifications, and Facebook Pages. Facebook gives various items, complimentary, to its clients.

The accompanying measurements are further illustrative of Facebook size and scale: 100 Billion kinships; 250 Million photographs transferred each day; 2.7 Billion Likes and Comments for every day. Facebook had 845 Million Monthly Active Users (MAU) before the end of 2011. More than 425 Million MAUs, about portion of Total MAUs, utilized Facebook items on Mobile.

Value proposition

With such a large number of clients utilizing Facebook all the time, it has turned into an alluring destination for promoters. The value proposition for facebook would be to develop a strengthened bond with the different segments of customers. The business relies heavily on the content of its users where it had billion of users.   

Channels

Publicists can draw in with their clients based upon the data shared by clients, for example, Location, Education or particular Interests. Facebook offers an one of a kind blend of achieve, importance, social connection, and engagement to the publicists. Facebook offers publicists a capacity to incorporate social setting in their Ads. Organizations can likewise make Facebook Pages to connect with intrigued clients and reenact a progressing dialog with them. Social setting highlights a client’s associations with a brand or business.

Customer Relationships

The Facebook provides its users a friendly environment for interacting with the platform provided by the company. The better understanding about the needs of the clients or users could draw a major difference line of action for the business. The effective customer relationships would allow the company to predict its future forecasts or identifying the aspirations of its customers.  

Revenue streams.

The revenue streams of the Facebook come from three sources which are Credit on games & applications, ecommerce and display & Text Ads.

The Facebook notice framework is largely self-serve and gives constant input on the measure of the intended interest group and the recommended offer reach to accomplish impressions. Facebook Social Ads are essentially self-serve advertisements that can be profoundly focused to appear to particular clients. Facebook offers both expense per click (CPC), for which promoters pay just when clients really tap on the ad, and expense per thousand impressions (CPM), for which sponsors pay in light of the quantity of times these ads are shown on client pages. Facebook profits taking into account what number of pages are gone to and the offering rates on these notices.

The anticipation of the company provides that this business will become altogether over our figure skyline. Facebook has joined forces with retailers like Amazon and eBay to influence its extensive base of clients searching for exhortation before settling on a choice as to which item to purchase. Facebook started testing its virtual money, called Credits, in 2009 with some well-known amusements on Facebook. Facebook clients can likewise buy virtual endowments from outsider applications utilizing Facebook Credits. In September 2010, Credits passed a point of reference when it turned into the select installment strategy for the greater part of the amusements made by Zynga, creator of Facebook applications.

Key resources

The major key resources for Facebook would be the huge user base as well as log term and sticky relationships with its customers. The acquisitions of the various other socializing platforms like Instagram and WhatsApp. etc. The continuous improvement in the systems or frameworks of the company is another key resource for the facebook.

Key activities

Facebook is putting vigorously into Facebook-possessed server centers of the data. The major key activities of the company include the data center operations and platform developments. This is to bolster client development, expanded client engagement, and conveyance of new items. This is going to increment further later on as clients connect with additional on Facebook. The data centers of Facebook as of now are more than 100 quadrillion bytes in the form of photographs and recordings. Facebook specially constructs its product, servers, as well as data centers.

Partner network

For enhancing the user experiences as well as encouraging the engagement of its huge number of users where it has gone under partnerships with various companies like Hulu, Netflix, Spotify which are providing users with a bundle of entertainment options. This up gradation or partnerships with major firms allows the company to enhance its sale volumes as well as number of customers.  

Cost structure.

The cost structures of facebook are decided as to the competition in the market. The major revenue stream for Facebook is from advertising campaigns like display ads or so on therefore the cost models would be relevant with this aspect. The two cost models for Facebook are CPM, which is Cost per thousand impressions, and CPC i.e. Cost per click.  (Facebook.com, 2015)

Critical Evaluation of the Company’s Model

Facebook has a dominant social networking site as compared to other players of the market like Google, etc. the aim of the facebook business is to design the socializing items while partnering with important companies in the market for expanding its business prospects. The company has been able to establish or built a stronger network, which is affecting its performance in the market. The presence of WTA dynamics of MSPs and network effects allows Facebook to attain substantial competitive edge over its competitors in the market. The company also had stronger R & D as compared with its major competitor Google. The company is earning benefits from start of its operations. The company also took benefit from the cross network effects in its development.

The company is relying heavily on its online advertisements where more than 85% of its income has been generated from it. Due to long tail of its customers and self-serve auction based Ad product models, it has been difficult for the company to foresee its future revenues as compared with the product manufacturing companies. The presence of huge database of online customers it has been termed as data locked in for facebook. As from the gross marginal aspect, Facebook has been effective in generating huge number of profit margins as compared with its competitors.       

Conclusion

At the end, it could be said that the Facebook Business Canvas Model has been very effective and prominent one as compared with the number of players present in the market. Already playing their part in online socializing network business where they had grown up to huge limits numerous players. The revenue streams of the company as been calculated but it could be related with the future income levels for the company because the presence of huge number of users make it harder to foresee revenue for future. The provision of continuous improvement in terms of product offering the company is capable of earning huge sums of money despite of growth of other players of the market like Google, etc.

References:

Breiby, E., & Wanberg, M. H. (2011). Successful business model innovation. Paper on Industrial Economics and Technology Management , 1 (1), 1-126.

Facebook.com. (2015, March 08). Introduction to Business Model Canvas. Retrieved December 9, 2015, from https://web.facebook.com/events/329603717246639

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