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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