Business Models for Dummies Overview
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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
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