Business Models for DummiesOverview

What is a business model?

In its simplest form, a business model

is your profit formula

It’s the method you use to acquire customers, service

them, and make money doing so

There’s some confusion as to what’s a business model

and what’s not

A business plan isn't a business model

But they are related

Neither is competitive advantage or branding or

marketing

Your business model is the foundation of profitability

Name three great businesses

Chances are they all have great models

That’s because your business model is the

foundation of profitability

Can you name a great business without a great

business model?

You probably can’t

No amount of leadership, hard work, or talent

fix a weak model

Great leadership +

bad model =

A bad business

Average leadership +

great model =

great business

But how do you create a business model?

The wrong approach to business model design

The Business Model Wheel™ offers a structured approach to

business model design

There are three aspects to all business models

What is the offering?

How will you monetize the offering?

How will you sustain it?

These are then structured into eight areas

Offering-Area #1: Market Attractiveness-Area #2: Unique Value Proposition

Monetization - Area #3: Profit Model - Area #4: Sales Performance Model

Sustainability - Area #5: Ongoing Competitive Advantage - Area #6: Innovation Factor - Area #7: Avoidance of Pitfalls - Area #8: Graceful Exit

Business models aren't static, they are fluid

Business models weaken with time

Changing economic factors

Societal pressures

Fleeting consumer preferences

Technological changes&

Competitive pressures

All are working to weaken your model

Business model innovation is the solution

Your business model effectiveness will peak

Innovation to version 2.0 of business model will be

necessary

Great companies continually innovate their business

model

The original business model was transferring money mobile

phone to mobile phone

It didn’t work

They decided to hitch their wagon to eBay and to the email transfer of money

That worked in a BIG way!

Now there is a huge opportunity for variation of original model –

phone payments

Started in business making everything from meat slicers to

punch cards for time clocks

Later bet the company on mainframes and won

Transitioned to an intellectual property seller

and consulting company

Started as small player in industrial sandblasting

business

Moved up the value chain to become largest supplier of

industrial cleaning supplies in the world

Even more inside the book

Advanced innovation techniques

Why most business “problems” aren't really the

problem

Learn to score your business model

Using the Business Model Wheel™ as an assessment

and innovation tool

Buy the book at:• Amazon.com• Bn.com• Booksamillion.com• Wiley.com