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    Developing An Effective Business Model

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    Suraj Ban
    The document discusses key aspects of developing an effective business model, including what a business model is, Uber's business model, the importance of business models, diversity in business models, and components of a business model such as core strategy, strategic resources, partnership network, and customer interface. Business models articulate a company's logic and plan for creating value and competing in the marketplace.

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    Developing An Effective Business Model

    Uploaded by

    Suraj Ban
    174 views16 pages
    The document discusses key aspects of developing an effective business model, including what a business model is, Uber's business model, the importance of business models, diversity in business models, and components of a business model such as core strategy, strategic resources, partnership network, and customer interface. Business models articulate a company's logic and plan for creating value and competing in the marketplace.

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    Developing an effective Business model

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    The document discusses key aspects of developing an effective business model, including what a business model is, Uber's business model, the importance of business models, diversity in business models, and components of a business model such as core strategy, strategic resources, partnership network, and customer interface. Business models articulate a company's logic and plan for creating value and competing in the marketplace.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    174 views16 pages

    Developing An Effective Business Model

    Uploaded by

    Suraj Ban
    The document discusses key aspects of developing an effective business model, including what a business model is, Uber's business model, the importance of business models, diversity in business models, and components of a business model such as core strategy, strategic resources, partnership network, and customer interface. Business models articulate a company's logic and plan for creating value and competing in the marketplace.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    Developing an

    effective
    Business
    model
    What is business model?

    • Firm's plan for how it creates value to sustain


    itself.

    • Includes activities that define how it competes in


    the marketplace.
    Uber’s Business Model
    Founders: Travis Kalanick, Garrett Camp
    Uber’s Business Model
    • Firm’s business model takes it beyond its own
    boundaries.
    • Almost all firms partner with others to make their
    business models work.
    • In Uber’s case, it needs the cooperation of its drivers,
    customers, and many others to make its business
    model possible
    • Products: Ride, Drive, Eat, Business, Freight, Health,
    Uber Air, Uber Works
    The Importance of Business Models

    • Serves as an ongoing extension of feasibility analysis

    • Focuses attention on how all the elements of a


    business fit together and constitute a working whole.

    • Articulates a company’s core logic to all stakeholders,


    including all employees.
    Diversity or Variety in Business Models
    • There is no standard business model for an
    industry or for a target market within an
    industry.
    • However, over time, the most successful
    business models in an industry predominate.
    • There are always opportunities for business
    model innovation.
    Business Model Innovation
    Business Model Innovation

    Netflix is an example
    of a business model
    innovator.
    How Business Models Emerge
    • The Value Chain
    – String of activities that moves a product from the raw
    material stage, through manufacturing and distribution, and
    ultimately to the end user.

    – An organization can identify ways to create additional


    value and assess whether it has the means to do so.

    – Also helpful in identifying opportunities for new


    businesses
    The Value Chain
    Potential Fatal Flaws in Business Models
    • A complete misread of the customer.
    • Utterly unsound economics
    Components of a Business Model
    Core Strategy
    • Describes how a firm competes relative to its competitors.

    • Primary Elements of Core Strategy


    – Mission statement: describes why it exists and what its
    business model is suppose to accomplish.
    – Product/market scope: defines the products and markets on
    which it will concentrate.
    – Basis for differentiation: if a new firm’s products or
    services aren’t different from those of its competitors, why
    should anyone try them?
    Strategic Resources
    • the resources a firm has affects its business model
    substantially

    • The two most important strategic resources are:


    • A firm’s core competencies: resource or capability that
    serves as a source of a firm’s competitive advantage.

    • Strategic assets: anything rare and valuable that a firm


    owns.
    Partnership Network
    – A firm’s partnership network includes:

    • Suppliers: company that provides parts or services to


    another company.

    • Other key relationships: Firms partner with other


    companies to make their business models work.
    Customer Interface
    • The way a firm interacts with its customer hinges on how it
    chooses to compete.
    – The three elements of a company’s customer interface are:
    • Target customer: limited group of individuals or
    businesses that it goes after or tries to appeal to.
    • Fulfillment and support: the way a firm’s product or
    service reaches it customers.
    • Pricing model: vary, depending on a firm’s target
    market and its pricing philosophy.

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