Reinventing the Business Model

Reinventing the Business Model

What is business model? 2 Essential Elements of Business

Model When do you need to reinvent the

business model? How to re-invent the business

model? Apple case Some more pointers Business Model Canvas - Extended

What is Business Model ?A business model is the plan implemented by a company to generate revenues and make a profits from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.

2 Essential Elements of Business Model

Value Proposition – What we offer to whom?It represents explicit choices along the below 3 dimensions .Target Segment(s) - Which customers do we

choose to serve? Which of their needs do we seek to address?

Product or Service Offering - What are we offering the customers to satisfy their needs?

Revenue Model - How are we compensated for our offering?

2 Essential Elements of Business Model

Operating Model – How do we profitably deliver the offering? It represents explicit choices along the below 3 dimensions.Value Chain - How are we configured to deliver

on customer demand? What do we do in-house? What do we outsource?

Cost Model - How do we configure our assets and costs to deliver on our value proposition profitably?

Organization - How do we deploy and develop our people to sustain and enhance our competitive advantage?

When do you need to reinvent the business model?Innovation becomes BMI when two or more

elements of a business model are reinvented to deliver value in a new way (Classic example is Apple).

Business model innovation is especially valuable in times of instability.

Business model innovation helps in beating the intense Competition.

Innovations to improve processes and products, At times they are expensive and time-consuming, requiring a considerable investment in everything from R&D to specialized resources, new assets and even entire new business units.

When … continued..It can help address disruptions—such as

regulatory or technological shifts—that demand fundamentally new competitive approaches.

BMI can also help address downturn-specific opportunities, enabling companies, for example, to lower prices or reduce the risks and costs of ownership for customers .

VUCA

How to re-invent the business model?

Apple – Before and After Business Model Reinvention

Apple – Before and After Business Model Reinvention

Some more pointers-

Business Model Canvas - Extended