A critical review of articles exposing the role of the business model in creating value for the business and how this relates to the Business Model Canvas.
Introduction
This analysis discusses four articles that examines the concept of the business model, how it complements a business strategy. They introduce frameworks to assess and categorize business models through the importance of the value proposition. In Business Models: A Challenging Agenda, Baden-Fuller and Mangematin (2013) introduce a four-prong typology to discuss the value proposition through value creation and capture and how a business model is not a complete description and is alterable. Johnson, Christensen and Kagermann (2008) focus on the understanding and analysing a business model to decide if it needs re-inventing (change) or if it can be applied to a new business. In Why Business Matter, Joan Magretta (2002) writes about testing the
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As such, it fits within Baden-Fuller and Mangematin typology. The four elements of their typology focus on the customers, customer engagement, monetization and value chain and linkages (Baden-Fuller & Mangematin, 2013). While they created the typology as a classification method (Baden-Fuller & Mangematin, 2013, p. 11), the business model canvas is use to define your business model and help to create value for the enterprise.
Looking at the Canvas, we can map the 9 elements it contains to the typology offered by Baden-Fuller and Mangematin. The Customers typology maps to the Customer Segment of the canvas. The Customer Engagement is relevant to the Customer Relationships, Channels and Value Proposition groupings. Monetization is the equivalent of Cost Structure and Revenue streams. Finally, Value Chain and Linkages represents Key partnership, Activities and
G. Nickels, W., M. McHugh, J., & M. McHugh, S. (2013).Understanding business. (10th ed.). New York, NY: McGraw-Hill/Irwin.
Many firms pursue multiple business models at once. Nevertheless, there clearly are dominant patterns to all this variety on the Web.
A market profile is explain on customers and customer groups in term of the unique characteristics. It gives information about customer target group and what they looks like. It also helps in identify clearly on target customers who interested in the business’s products or services which the business need to focused on target group of customers who suitable for products or services.
This consists of four sections which include Market Penetration, Product Development, Market Development and Diversification.
“A market segment consists of a group of customers who share a similar set of needs and wants. The marketer’s task is to identify the appropriate number and nature of market segment and decide ...
1.2: Explain the process of mapping the customer journey and its importance in delivering effective customer service
It has been observed since the inception of Marketing that marketers target to only specific market and how they identify such market. There are certain criteria or base they use to identify the consumers who they would be serving to. Customers do have unique requirements satisfaction levels and aspirations. Some customers however are similar with respect to their requirements of goods and services. In such case if their needs are identified and they can be grouped in quantities of a specific size then it can be segmented. Now each customer group have specific expectations and businesses must cater to the needs of the segmented that has been targeted.
I will first of all define business analysis as a practice of enabling change in an organization setting, by defining needs and recommending solutions that deliver value to stakeholders. Business analysis help businesses do better, it identifies and articulates the need for and how change in organization’s work and hence facilitate the change. Business analysis identifies and defines the solutions that will maximize the value delivered by the organization’s stake holders. The process of business analysis begins with the orientation were we get to understand or get the feel of what’s underway. Clarifying roles and determining primary stakeholders to engage in defining the project’s scopes and business objectives. Next in the process is to define
When an individual decides to venture out on their own and become an entrepreneur they are taking a huge risk, one of the tools that can make the difference between being successful or failing is the Business Model Canvas (BMC). Osterwalder invented the BMC because he believed that a company’s first business plan always failed the minute it reached the customers, leaving the owners discouraged and deflated and feeling that they had wasted time, energy and money; so he wanted to create a more flexible business plan that owners can edit and make the changes needed to reach the customers needs "One Tool Startups Need to Brainstorm, Test and Win | First Round Review," n.d.). The canvas consists of nine elements or building blocks that create a visual template spelling out the business’s value proposition, infrastructure, customers and the finances (White, 2012). Breaking down the key elements that are vital to taking customers needs, wants or problems into a fruitful company
Once segments of customers have been defined, marketers need to select and evaluate which segments will be worth targeting. Cui and Choudhury (2003) define market targeting as marketing a product to a segment of customers due to the magnetism, for example size or growth, of the group. Marketers are able to select segments using undifferentiated, differentiated and concentrated marketing. By ignoring segment differences ...
When the buzzword of business model was very active and reactive during the internet boom, many individuals did not understand the concept of the proper business model for the proper business (Magretta, 2002). When not utilizing the right type of model for the organization, the model will be misused and distorted (Magretta, 2002). Understanding the traditional organization and learning organization, will allow an organization to determine which time of organization they desire the most.
By definition, there are at least three types of actors involved in disruption, the applicants, the officials and the customers. A business model approach to innovation considers all aspects of innovation processes and business activities for developing or responding to disruptive innovation, as opposed to a technology solution alone.
At one of our quarterly All Hands meetings, the president of our division discussed how growing the market share was critically important in the digital banking space. The key goal is to continue to lead this space in the future, but doing so becomes increasingly more challenging as new market competitors try to steal share. To keep ahead, we need to always bring our “A” game to the market. To create blue ocean strategies would require innovation, customer engagement, and out of the box thinking. We have to consider buyer utility, pricing, cost, and adoption. To do this would require us to be strategic about how we design, build and price our products. Even the way the business manages the different consumer segments is important. There is differentiation of the needs of different types of financial institutions. The customer centered brand management strategy we discussed in class is very useful to this type of organization. How we market to large national banks should be different than how we market to small town banks. Generally, small banks do not have the technology budget to invest in large scale digital channel solutions. Many companies decided to have different brands for their different customer segments. We discussed how this works successfully for car companies. For Digital Channels,
Value is used in a central thought in economic theory (Haksever et al., 2004). The key for the value is an ‘exchange’ between two units such as “benefits and sacrifices” (Möller, 2006), “consumer surplus," value for money or optimize used value, but minimize exchange value (sacrifices in terms of price) (Bowman & Ambrosini, 2010). Normann & Ramirez (1993) use the terms co-produce to define the participation of customers in value co-creation that realized value is not created at supplier level, but between customer interactions. Several authors describe value in terms monetary business value whereas others include non-monetary benefits such as market competitiveness, competencies, and social rewards (Walter, Ritter, & Gemünden, 2001) or could be the combination of both business value. Haksever et al. (2004) describe tangible or intangible value may derive from business activities, policies, and regular action of the firm as the power of the product, service, or activity to fulfill a requirement or deliver a profit to a person or legal entity. Those values may positively influence the “quality of life, knowledge, prestige, safety, physical and financial security, as well as providing nutrition, shelter, transportation, income, etc.” (Haksever et al., 2004, pg. 292). These values are meant for stakeholders of the firms such as its customers, suppliers, owners and other firm’s alliances (Bowman & Ambrosini, 2010). Therefore, the role of firm and customers are different, it is a sequence of activities performed by the firm (Vargo et al., 2008).
The field of young entrepreneurs looking to create their own success in the business world is rife with digital and app based start-ups. In fact, if you were to sit down 100 business students and asked them what their big business idea was, odds are plenty of them would take the form of a digitally based product. There is no doubt that success can be found in such realm, history tells us that, but many young entrepreneurs are finding that there is still plenty of life in so-called ‘traditional sectors’.