Reinventing Your Business Model ( When a New Business Model Is Needed…
Business Model: A Definition
Consists of four inter- locking elements that, taken together, create and deliver value.
Customer value proposition (CVP)
Cost structure: direct costs, indirect costs, economies of scale
Revenue model: price × volume
Margin model: given the expected volume and cost structure, the contribu- tion needed from each transaction to achieve desired profits.
Resource velocity: how fast we need to turn over inventory, fixed assets, and other assets – and, overall, how well we need to utilize resources – to sup- port our expected volume and achieve our anticipated profits.
How Great Models Are Built
Creating a customer value proposition
The Elements of a Successful Business Model
Designing a profit formula
Identifying key resources and processes
When a New Business Model Is Needed
The opportunity to bring a job-to-be-done focus where one does not yet exist
The need to fend off low-end disrupters
The opportunity to capitalize on a brand-new technology by wrapping a new business model around it
The need to respond to a shifting basis of competition. Inevitably, what defines an acceptable solution in a market will change over time, leading core market segments to commoditize
The opportunity to address through disruptive innovation the needs of large groups of potential customers
How Dow Corning Got Out of Its Own Way
Breaking the rules.
Identifying new competencies
What Rules, Norms, and Metrics Are Standing in Your Way?
The secret sauce: patience