Discovering business model as a blueprint for charting, embedding and leading evolution of mutually rewarding values thereby achieving business success.
How to Transform a Firm's Business Model
Linder and Cantrell indicated Business Model is an organisation’s core logic for creating value. Bill Vorley, Mark Lundy and James Macgregor identified Business Model as a way of creating and capturing value within a market network of producers, suppliers and consumers. Alexander Osterwalder postulated “Business Model is nothing else than a representation of how an organisation makes or intend to make money”. While Mitch Thrower affirmed, "in all enterprises, it's the business model that deserves detailed attention and understanding".
Business stream is a schema that shows the five layers in business development framework, from business intent to business performance.
Three Levels of Business Strategy
It’s concerned with the following:
This is concerned with the following:
It’s concerned with implementation of the strategic plans established at corporate and business unit levels in order to ensure functional silos partnership in organisational leadership.
Osterwalder & Pigneur Business Model Canvas
Ezendu Business Model Template
The business model template consists of four parts namely infrastructure, offer, customer and finance. The content of each part is as stated below.
The two alliance structures are as follows:
Some types of alliances are as follows:
The four types of resources are as follows:
Steps in Transforming a Business Model
- Business Model Analysis
- Development of Solution Options for Identified Problems
- Restructuring of Business Model to More Efficient Alternatives
- Identification of Most Efficient Alternative
- Deployment of New Business Model and Review
Elijah Ezendu, Business Model
Business Model Analysis
This is the critical identification and evaluation of a business model for purpose of ascertaining its internal alignments to operational effectiveness and external alignments to efficiency of the total business stream.Business stream is a schema that shows the five layers in business development framework, from business intent to business performance.
Layers of Business Stream
- Business Intent
- Business Strategy
- Business Model
- Business Process
- Business Performance
Elijah Ezendu, Business Model
Business Intent
Business intent is the description and accentuation of a structured focus, highlighting vision, mission, goals and objectives, while symbolizing direction and destiny.Business Strategy
Business strategy represents clearly identified feasible route for steering activities onto attainment of goals and objectives. There are three levels of business strategy.Three Levels of Business Strategy
- Corporate Level Strategy
- Business Unit Level Strategy
- Functional/Operational Level Strategy
Corporate Level Strategy
This comprises overall strategy elements for the firm. Resolving issues pertaining to mix of businesses and means for coordination and integration of individual unit strategies.It’s concerned with the following:
- Managing Activities and Business Interrelationships
- Corporate Responsibilities
- Management Practices
- Competitive Contact
Business Unit Level Strategy
This involves translation of the corporate level strategy into suitable strategies for individual business divisions or portfolios, required to develop and sustain competitive advantage for products or services of the firm.This is concerned with the following:
- Influencing the layout of competition by means of action such as vertical integration.
- Positioning the firm’s business against competitors.
- Modifying actions to cope with changes in demand, supply, regulations and technology.
- Developing useful partnerships with customers and other business units.
Functional/ Operational Level Strategy
This involves development of strategies for functional catchments such as production, finance, human resource, research, logistics, business development and materials management.It’s concerned with implementation of the strategic plans established at corporate and business unit levels in order to ensure functional silos partnership in organisational leadership.
Characteristics of Business Model
- Business Model is a blueprint pinpointing the flow of articulated value from a firm to its customers, and the dimensions of returns to the firm.
- Business model is a bridge providing appropriate linkage between business strategy and business process.
- Without a well-structured business model in place, there would be a disconnect between business strategy and business process.
- Business Model is the drawing board for designing Business Performance.
- Business Model is the heart of Business Success.
Osterwalder & Pigneur Business Model Canvas
Alexander Osterwalder & Yves Pigneur, Business Model Generation
Ezendu Business Model Template
Elijah Ezendu, Business Model
Infrastructure:
- Alliance Networks
- Key Activities
- Coherence
- Key Resources
Offer:
- Value Propositions
Customer:
- Customer Relationships
- Influence
- Channels
- Target Customers
Finance:
- Cost Structure
- Revenue Stream
Alliance
Alliance is an agreement between firms for achievement of defined goals and building mutual interdependence while remaining separate entities.The two alliance structures are as follows:
- Transient Alliance
- Strategic Alliance
Some types of alliances are as follows:
- Preferred Suppliers
- Co-Marketing
- Licensing
- Joint Production
- Coopetition
- Minority Investments
- Multi-Partner Consortia
- Joint Research and Development
- Outsourcing
- Equity Joint Venture
Key Activities
This represents the major work concentration of a firm in order to produce well-defined value proposition. Ascertainment of key activities gives room for mapping aggregate work requirements and ancillary projections.Coherence
Coherence is a cultural thrust that provides effective connectivity for all the components of business model, fusing them together in characteristic intimacies, and facilitating uniform drive onto specified goals and objectives.Key Resources
These are the resources required for producing a set of value propositions.The four types of resources are as follows:
- Material Resources
- Physical Resources
- Financial Resources
- Intellectual Resources
Value Propositions
Value propositions represent the whole set of values which a firm lays out to its customers, in order for them to find consummate worth therein.
Value propositions represent the whole set of values which a firm lays out to its customers, in order for them to find consummate worth therein.
Value Propositions stand as the pivot of business intent.
Value Propositions give room for development of interdependencies between a firm and its customers.
Customer Relationships
This deals with identification and inventory of diversity of relationships which a firm should nurture with its customers. Where the customers are segmented, relationships may vary from one segment to another. If the customers are not segmented, then the ensuing relationships would be undifferentiated. Customer Relationships should be deployed for expanding value synchronization capacity of the firm-customer bond beyond primary transactional linkages that characterize customer touch points, with the intention of gaining resolute foothold in the belief structure of customers.Goals of Customer Relationships
- Customer Information Services
- Customer Acquisition
- Customer Retention
- Cross-Selling
- Up-Selling
- Price Optimization
- Continuous Value Propositions Realignment
Influence
This is the active strength that affects a person’s opinion, thereby inducing action in a particular direction.
It provides productive link to customers.
This is the active strength that affects a person’s opinion, thereby inducing action in a particular direction.
It provides productive link to customers.
Its operability depends on pedestals of acceptance and belief.
Types of Influence
- Social Influence
- Brand Influence
- Consumer Influence
- Religious Influence
- Economic Influence
- Environmental Influence
- Influence Predicated on National Pride
Channels
Channels are paths through which a firm moves its value proposition to target customers, by means of designated sales points, distributors, and effective communication.Target Customers
These are the particular set of customers that a firm intends to be offering the right value proposition for their identified needs or wants. Customers can be segmented, aggregated or selected with specificity in the form of a niche.Cost Structure
The cost structure of a business model highlights profiles of incurrable costs and the ratio of fixed costs to variable costs. It facilitates identification of cost-containment method that would be deployed. It allows for application of cost management techniques to mitigate effects of identified cost drivers.Types of Cost Structures
- Cost Leadership
- Value Maximization
- Integrated Cost Leadership & Value Maximization
Revenue Streams
These are applicable means of obtaining revenue from customers as a measurable and deserved return for values delivered.Testing a Business Model
The four criteria for testing a business model are as follows:- Conveys Business Intent
- Positive Alignment with Strategy
- Translates Strategy to Process
- Practicable Design for Performance Optimization
Elijah Ezendu, Business Model
Subscribe to:
Posts (Atom)