Author: Robert, Marketing Manager

Today we provide some guidance for all visionaries, game changers, and challengers striving to defy outmoded business models and design tomorrow′s enterprises. If your organization needs to adapt to harsh new realities, but you don′t yet have a strategy that will get you out in front of your competitors, you need to read this article.

A business model describes the rationale of how an organization creates, delivers and captures value. We need a business model concept that everybody understands, one that facilitates description and discussion. The challenge is that the concept must be simple, relevant and intuitively understandable, while not oversimplifying the complexities of how enterprises function.

The term “business model” first came into widespread use with the advent of the personal computer and the spreadsheet. Before the spreadsheet, business planning usually meant producing a single, base-case forecast.

A business model can be best described through nine basic building blocks that shows a logic of

how a company intends to make money.

The 9 Building Blocks:

1. Customer Segments (CS) - An organization serves one or several customer segments

2. Value Propositions (VP) - It seeks to solve customer problems and satisfy customer needs with value propositions.

3. Channels (CH) - Value propositions are delivered to customers, through communication, distribution, and sales channels.

4. Customer Relationships (CR) - Customer relationships are established and maintained with each customer segment.

5. Revenue Streams (RS) - Revenue streams result from value propositions successfully offered to customers (Asset sale, brokerage, usage fees, advertising, licensing, renting, leasing, subscription fees)

6. Key Resources (KR) - Key Resources are the assets required to offer and deliver the previously described elements. 4 Categories: Physical, Intellectual, Human, Financial.

7. Key Activities (KA) - by performing a number of key activities

8. Key Partnerships (KP) - Some activities are outsourced and some resources are acquired outside the enterprise.

9. Cost Structure (CS) - The business model elements result in the cost structure

Below you can find Business Model Canvas: