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Definition
• A business model describes the rationale of how an organization creates, delivers, and captures value– A business model is a conceptual tool containing a set
of objects, concepts and their relationships with the objective to express the business logic of a specific firm.• Therefore we must consider which concepts and
relationships allow a simplified description and representation of what value is provided to customers, how this is done and with which financial consequences.
The origin of the concept
Source: Ostenwalder A., Pigneur Y., Tucci C.L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1-40
Search criteria: titles, abstracts, keywords, full texts of all articles in the Business Source Premier database of scholarly business journals for the word string "business model". The search included several variations of the original term like "e-business model", "new business model" or "Internet business model".
the popularity of the term "business model“ is a relatively young phenomenon
Business model and technology
Source: Ostenwalder A., Pigneur Y., Tucci C.L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1-40
the number of times the term "business model" appeared in a business journal (peer-reviewedand non-peer reviewed) follows a pattern that resembles the shape of the NASDAQ market index.
“Part of the relationship between technology and business models stems from the business model concept’s roots in transaction cost economics (TCE). The sharp rise in cheap information technology, bandwidth, and communication possibilities made it much easier for companies to work in so-called value webs because coordination and transaction costs fell substantially [Tapscott, Ticoll et al. 2000; Amit and Zott, 2001)”
Figure 1. Occurrences of the Term "Business Model" Compared to NASDAQ Fluctuations
The Business Triangle
Source: Ostenwalder A., Pigneur Y., Tucci C.L. (2005) Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of AIS, 15 (1): 1-40
“we understand the business model as a building plan that allows designing and realizing the business structure and systems that constitute the operational and physical form the company will take. We call this relation between strategy, organization, and systems the business triangle that is constantly subject to external pressures, like competitive forces, social change, technological change, customer opinion and legal environment”
The business model canvas
http://www.youtube.com/watch?v=QoAOzMTLP5s&feature=player_detailpage
A shared visual language to sketch out existing or new business models
The 9 building blocks - 0
The 9 building blocks - 1
• Mass market• Niche market• Segmented• Diversified• Multi-sided platforms• …
Mass market
Segmented…enough?
Segmented - customized
Niche market
Diversified
B2C B2B
Multi-sided platforms -1/2
Multi-sided platforms - 2/2
The 9 building blocks - 2
• Newness• Performance• Customization• Design• Brand/Status• Price• Accessibility• …
The 9 building blocks - 3
• Own Channels• Direct
• in house sales force• web sales
• Indirect• own stores
• Partner Channels• Indirect
• partner stores• Wholesalers• Web sites
The 9 building blocks - 4
• Personal assistance• Dedicated personal assistance• Self-service• Automated services• Communities• Co-creation
The 9 building blocks - 5
• Asset sale• Usage fee• Subscription fee• Lending/renting/leasing• Licensing• Brokerage fees• Advertising
The 9 building blocks - 6
• Key resources– Physical– Intellectual– Human– Financial
The 9 building blocks - 7
• Production• Problem solving• Platform/network
The 9 building blocks - 8
• Why?• Economy of scale• Risk reduction• Access to critical resources
The 9 building blocks - 9
• Cost structure– Cost-driven– Value-driven
• Characteristics– Fixed costs– Variable costs– Economies of scale– Economies of scope
The 9 building blocks
From a nice picture to a useful tool
Here is the canvas!
How to work with this?
Start playing with post-it…
…and populate the canvas
…with a dynamic approach…
…exploring a variety of solutions…
And now DIY…download your canvas!
http://www.businessmodelgeneration.com/downloads/business_model_canvas_poster.pdf
Business Model Theatre
http://www.youtube.com/watch?feature=player_detailpage&v=LLKqthJOdN8
How can companies embed values in their business
models?
