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For whom are we creating value? 21

Who are our most important customers?

Diversified
An organization with a diversified customer business
model serves two unrelated Customer Segments
with very diΩerent needs and problems. For example,
There are diΩerent types of Customer Segments. in 2006 Amazon.com decided to diversify its retail
Here are some examples: business by selling “cloud computing” services: online
Segmented storage space and on-demand server usage. Thus
Mass market Some business models distinguish between market it started catering to a totally diΩerent Customer
Business models focused on mass markets don’t segments with slightly diΩerent needs and problems. Segment—Web companies—with a totally diΩerent
distinguish between diΩerent Customer Segments. The retail arm of a bank like Credit Suisse, for example, Value Proposition. The strategic rationale behind this
The Value Propositions, Distribution Channels, and may distinguish between a large group of customers, diversification can be found in Amazon.com’s powerful
Customer Relationships all focus on one large group each possessing assets of up to U.S. $100,000, and IT infrastructure, which can be shared by its retail sales
of customers with broadly similar needs and problems. a smaller group of aΩluent clients, each of whose net operations and the new cloud computing service unit.
This type of business model is often found in the worth exceeds U.S. $500,000. Both segments have
consumer electronics sector. similar but varying needs and problems. This has Multi-sided platforms (or multi-sided markets)
implications for the other building blocks of Credit Some organizations serve two or more interdepen-
Niche market Suisse’s business model, such as the Value Proposi- dent Customer Segments. A credit card company, for
Business models targeting niche markets cater to tion, Distribution Channels, Customer Relationships, example, needs a large base of credit card holders
specific, specialized Customer Segments. The Value and Revenue streams. Consider Micro Precision and a large base of merchants who accept those credit
Propositions, Distribution Channels, and Customer Systems, which specializes in providing outsourced cards. Similarly, an enterprise oΩering a free news-
Relationships are all tailored to the specific require- micromechanical design and manufacturing solutions. paper needs a large reader base to attract advertisers.
ments of a niche market. Such business models It serves three diΩerent Customer Segments—the On the other hand, it also needs advertisers to finance
are often found in supplier-buyer relationships. For watch industry, the medical industry, and the industrial production and distribution. Both segments are
example, many car part manufacturers depend heavily automation sector—and oΩers each slightly diΩerent required to make the business model work (read
on purchases from major automobile manufacturers. Value Propositions. more about multi-sided platforms on p. 76).

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