Introduction to business models
When we talk about a business model, we mean ”the rationale of how an organisation creates, delivers, and captures value from economical, social or other point of view”. The process of business model construction is part of business strategy. Therefore, designing the right business model for one's company is important. It is part of the business development and business strategy process and involves design methods. If the company considers that the target is to reduce consumption of critical raw materials, they may need to adapt their business model towards innovation for sustainability.
A sustainable business model is a business model that brings positive impacts to society while staying within the environmental limits of the planet.
It may be necessary to answer questions concerning: key partners, key activities, key resources, value propositions, customer relationships, channels, customer segments, cost structure, and revenue streams.
Business model canvas
Business model Canvas, proposed by Alexander Osterwalder in 2008, is now a very famous strategic template for developing new or documenting existing business models. It’s a good frameworks which has 9 building blocks that present the customers segment, the value proposition for each segment, the channels to reach customers segments, the relationships you establish, the revenue streams you generate, the key resources, and key activities you require to create value, the key partners and the cost.
- The customer segments (Kundensegemente): Include all the people/organization for which the company is creating value, such as customers or users.
- Value proposition (Wertangebote): To each segment, there is a specific value proposition. These are the bundles of products and services that create value for the customers
- Channels (Kanäle): They are described through which touch points the company is interacting with customers and delivering value
- The customer relationships (Kundenbeziehungen): It outlines the type of relationship the company is establishing with the customers.
- The revenue streams (Einnahmequellen) make clear how and through which pricing mechanisms the business model is capturing value
- Key resources (Schlüsselressourcen): They show which assets are indispensable in the business model
- Key activities (Schlüsselaktivitäten): They show which things are really needed to be able to perform well
- Key partners (Schlüsselpartner): They show who can help in leveraging the business model since an organization won’t own key resources itself, nor perform all key activities
- Cost structure (Kostenstruktur): Once the your business models infrastructure is understood, it is possible to have an idea on the cost structure.
So with the business model canvas, it is possible to map out the entire business model in one image. This works for start-up entrepreneurs, just as well as for the most senior executives
Quiz
Link to our quiz
Vocabulary
consumption = Konsum
sustainability = Nachhaltigkeit
revenue = Einnahme template = Vorlage
establish = herstellen
touch points = Berührungspunkte indispensable = unverzichtbar
leveraging = zum Durchbruch verhelfen
Sources
Main source (edex.org)
Info business model (ut11.net)
From Anna and Seraina