BUSINESS MODELS,BUSINESS PLAN AND BUSINESS STRATEGY.pptx

BUSINESS MODELS,BUSINESS PLAN AND BUSINESS STRATEGY WHAT IS A BUSINESS MODEL  A business model is not a description of a complex social system itself with all its actors, relations and processes. Instead it describes the logic of a “business system” for creating value, that lies behind the actual...

BUSINESS MODELS,BUSINESS PLAN AND BUSINESS STRATEGY WHAT IS A BUSINESS MODEL  A business model is not a description of a complex social system itself with all its actors, relations and processes. Instead it describes the logic of a “business system” for creating value, that lies behind the actual processes. A business model is the conceptual and architectural implementation of a business strategy and represents the foundation for the implementation of business processes  4 parts to the business model Part 1- The offering – this is what the business produces and sells Value proposition: The value proposition is a description of the products and services the business offers and why customers will be compelled to buy them. The value proposition describes the problem the customers are experiencing and how the products and services being offered will help solve that problem. It describes how the features and characteristics of the products Part 2- Infrastructure– This is the part of the business that creates expenses. This part describes the basic facilities, skills, manpower, partnerships, and production process needed to exploit the business opportunity. Core capabilities: The capabilities and core competencies necessary to operate the business. This includes land, facilities, equipment, personnel and their required skills needed to produce the products or services described in the value proposition. Partner network: The business alliances needed to operate the business. Most businesses need alliances, agreements, licenses, or other third party assistance (legal, accounting, insurance, security, etc.) which are usually purchased from specialized service providers. Value configuration: The process by which the products or services are produced and presented to the customer. The value configuration describes how the Part 3- Customers– this is the part of the business that generates revenue. Target customer: The demographics, purchasing patterns, and location of the potential buyers of the products described in the value proposition. Distribution channel: The means by which the business delivers products and services to customers. This includes the business's marketing and distribution strategy. Customer relationships: The process of interacting with the business’s customers. It includes communicating, selling, supporting, and assisting customers purchase and use the business’s products Part 4- Finances – this is the part of the business that determines its financial performance and profit Investment: The investment needed to obtain the facilities, equipment, and working capital to begin or sustain operations. This should include an itemization of these expenses and sources of financing to obtain these funds and when they will be required. Cost structure: The expenses required to produce the products or services described in the value proposition. It should include an itemization of the expenses required by expense category and the assumptions made to estimate these expenses. Revenue: The income a business receives from the sales of its products or services. This includes sales volume and revenue projections and the The Business Model and the Business Plan The business model is the canter piece of the business plan but is not the entire business plan. The business plan should include additional information such as: Administrative information Company name and address Company phone number including area code Email address, URL, and Logo if applicable Names, titles, addresses, and phone numbers of the owners or corporate officers Month and year in which this business plan  Purpose of the business and why it should be successful. Business objectives – what the company wants to accomplish (market share, sales volume, revenue, return on investment, etc) The marketing plan. The competitive strategy describing how a sustainable competitive advantage will be obtained. Management, the people who will manage the company and their experience. Personnel plan describing the number and skills of the employees and how they will be hired and compensated. A schedule describing when investment funds will be needed and for what purpose, the sources of these funds and how they will be repaid. Annual revenue, expense, and cash flow projections and assumptions upon which they are based, and BUSINESS STRATEGY