pros and cons of business models - part one

Pros and Cons of Pros and Cons of Business Models Business Models

By Val A. Slastnikov,By Val A. Slastnikov,

PART ONE PART ONE

Business Model - Definition, Business Model - Definition, Components and TypesComponents and Types

(The Boring Part)(The Boring Part)

DefinitionDefinition

The term The term BUSINESS MODELBUSINESS MODEL describes a broad range of describes a broad range of informal and formal models that are used by enterprises to informal and formal models that are used by enterprises to represent various aspects of business, including its purpose, represent various aspects of business, including its purpose, offerings, strategies, infrastructure, organizational structures, offerings, strategies, infrastructure, organizational structures, trading practices and operational processes and policies. trading practices and operational processes and policies.

- Wikipedia, Online Encyclopedia- Wikipedia, Online Encyclopedia

ExplanationExplanation

BUSINESS MODEL:BUSINESS MODEL: a conceptual tool that contains a big set a conceptual tool that contains a big set of elements and their relationships and allows expressing the of elements and their relationships and allows expressing the business logic of a specific firm. business logic of a specific firm.

BUSINESS MODEL:BUSINESS MODEL: a description of the value a company a description of the value a company offers to one or several segments of customers and of the offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.generate profitable and sustainable revenue streams.

VALUEPROPOSITION

COSTSTRUCTURE

CUSTOMERRELATIONSHIP

TARGETCUSTOMER

DISTRIBUTIONCHANNEL

VALUECONFIGURATION

CORECAPABILITIES

PARTNERNETWORK

REVENUESTREAMS

INFRASTRUCTURE CUSTOMEROFFER

FINANCE

ComponentsComponents

Business Model Design Templateby Dr. Alex Osterwalder, PhD.

FunctionsFunctions

““A business model performs two important A business model performs two important functions:functions:

CREATES VALUECREATES VALUE by defining a series of activities from raw materials through to the final consumer that will by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added through the various activities. yield a new product or service with value being added through the various activities.

CAPTURES VALUECAPTURES VALUEby establishing a unique resource, asset or position within that series of activities where the by establishing a unique resource, asset or position within that series of activities where the firm enjoys a competitive advantage.”firm enjoys a competitive advantage.”

- Henry Chesbrough, “Open Business Models”- Henry Chesbrough, “Open Business Models”

QuoteQuote

““VALUEVALUE is a combination of price, service, is a combination of price, service, quality and, most importantly, the relationship quality and, most importantly, the relationship that you have with your customers.”that you have with your customers.”

- Chris Malta, Worldwide Brands- Chris Malta, Worldwide Brands

The OfferThe Offer

VALUE PROPOSITION:VALUE PROPOSITION: The products and The products and services a business offers services a business offers

VALUEPROPOSITION

value proposition 1value proposition 2

“THE WHAT”

The CustomerThe Customer

TARGET MARKET:TARGET MARKET: Who is the Offer Who is the Offer Targeted at?Targeted at?

“THE WHO”

target customer 1target customer 2

TARGETCUSTOMER

DISTRIBUTIONCHANNEL

distribution channel 1distribution channel 2

CUSTOMER

relationship type 1relationship type 2

The Target MarketThe Target Market

TARGET CUSTOMER:TARGET CUSTOMER: The target audience for a business' The target audience for a business' products and services. products and services.

DISTRIBUTION CHANNEL:DISTRIBUTION CHANNEL: The means by which a The means by which a company delivers products and services to customers. This company delivers products and services to customers. This includes the company's marketing and distribution strategy. includes the company's marketing and distribution strategy.

CUSTOMER RELATIONSHIP:CUSTOMER RELATIONSHIP: The links a company The links a company establishes between itself and its different customer segments. establishes between itself and its different customer segments. The process of managing customer relationships is referred to as The process of managing customer relationships is referred to as CRM (Customer Relationship Management). CRM (Customer Relationship Management).

The InfrastructureThe Infrastructure

DELIVERY MECHANISM:DELIVERY MECHANISM: How is the How is the Offer delivered to the Customer?Offer delivered to the Customer?

“THE HOW”

VALUECONFIGURATION

CORECAPABILITIES

core capability 1core capability 2

activity 1activity 2

INFRASTRUCTURE

PARTNERNETWORK

partner 1partner 2

The Delivery MechanismThe Delivery Mechanism

CORE CAPABILITIES:CORE CAPABILITIES: The capabilities and competencies The capabilities and competencies necessary to execute a company's business model. necessary to execute a company's business model.

PARTNER NETWORK:PARTNER NETWORK: The business alliances which The business alliances which complement other aspects of the business model. complement other aspects of the business model.

VALUE CONFIGURATION:VALUE CONFIGURATION: The rationale which makes a The rationale which makes a business mutually beneficial for a business and its customers. business mutually beneficial for a business and its customers.

The FinanceThe Finance

EXPENSES AND REVENUE STREAMS:EXPENSES AND REVENUE STREAMS: The Cost of running business and the way Profit The Cost of running business and the way Profit is madeis made

““THE MONEY”THE MONEY”

COSTSTRUCTURE

Cost account 1Cost account 2

FINANCE

REVENUESTREAM

Revenue Stream 1Revenue Stream 2

VALUEPROPOSITION

COSTSTRUCTURE

TARGETCUSTOMER

DISTRIBUTIONCHANNEL

VALUECONFIGURATION

CORECAPABILITIES

PARTNERNETWORK

REVENUESTREAMS

gives an overall view of a company's bundle of products and services

portrays the network of cooperative

agreements with other companies

describes the channels to communicate and

get in touch with customers

describes the arrangement of

activities and resources

explains the relationships a

company establishes with its customers

sums up the monetary consequences to run a

business model

describes the revenue streams through which

money is earned

describes the customers a company wants to offer value to

outlines the capabilities required to run a

company's business model

INFRASTRUCTURE CUSTOMER

FINANCE

Business Model Summary

by Dr. Alex Osterwalder, PhD.by Dr. Alex Osterwalder, PhD.

Where do YOU stand right now?Where do YOU stand right now?

Retire

Where do you go from here?Where do you go from here?Go and find out at:Go and find out at:

BizSuccessBlueprint.comBizSuccessBlueprint.com

pros and cons of business models - part one

business products

business start

business quotevalue

business logic

business foundersso

business models expert

cons of business models

true founder business

Business

geothermal energy pros cons nuclear power pros cons solar...

i phone6 pros -cons

the pros cons - orasure

microservices pros and cons

mouse model: pros & cons

mdgs: pros and cons

globalisation-pros & cons

pros& cons

abortion - pros and cons

privatization pros and cons

hpbef pros cons of different sales compensation … pros and...

pros and cons 2007

florida pros and cons

storyboards - pros & cons

clickers pros-cons

e-krona design models: pros, cons and trade-offs

vaccination – pros & cons

fracking pros and cons

section 2.1 population models - lafayette college...the pros...

testing resource models - pros and cons