Business Model Design
Your business model explains the rationale of how your business creates, delivers and captures value. We help organisations to review and redesign their business model(s) to generate the greatest return. Over time inefficiencies, distractions and competitive forces stretch and bend your business model out of shape.
As your strategy gets reviewed regularly so should your business model(s). We work with businesses to diagrammatically document their business models and to design alternatives.
Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organise to best meet those needs, get paid for doing so, and make a profit.
In essence, a business model is a conceptual, rather than financial, model of a business.
A business model is more generic than a business strategy. Coupling strategy analysis with business model analysis is necessary in order to protect whatever competitive advantage results from the design and implementation of new business models. Selecting a business strategy is a more granular exercise than designing a business model. Coupling competitive strategy analysis to business model design requires segmenting the market, creating a value proposition for each segment, setting up the apparatus to deliver that value, and then figuring out various ‘isolating mechanisms’ that can be used to prevent the business model/strategy from being undermined through imitation by competitors or disintermediation by customers. Strategy analysis is thus an essential step in designing a competitively sustainable business model.
The term freemium is coined using two powerful words ‘Free’ and ‘Premium’. It describes a business model where in you give away a core product for free and then generate revenue by selling premium products to a small percentage of free users. An example of the...
Most markets are one-sided in nature — customers interested in buying running shoes, for example. But a multi-sided market involves more players and each has its own interests to be served. Dual and multi-sided markets are markets in which firms need to get two or...