What makes a good business model? How do you know if your business model is no longer working for you? And what can you do to change it? In this podcast, we discuss how a business model creates value for an organisation.
Summary
- Business models encompass the way you deliver a product or a service, the way you market a product or a service, and the way you sell a product or service. This includes how you provide customers with value.
- With a broken business model or business model that has too much friction, it can reduce your profits, or you could have a formally strong product with diminishing demand. That's one of the primary examples of why Blockbuster died.
- Kodak is an example of a company that didn't transition from its original premise to the digital world. At its heart, Kodak was a chemical and film organisation. They had little understanding of electronics and how to manufacture and distribute electronics. Their business model was the main reason they ignored the market shift.
- In most cases, businesses become focussed on product and are less mindful of how customer needs might transition over time. If we understand the root customer value, then we can consider how we might deliver that value differently.
- The business model canvas is a tool that uncovers key activities, customer relationships, channels, customer segments, cost structures and revenue streams.
- The hardest part of any business model is getting the value proposition right.
- The first Netflix business model involved putting a CD into an envelope and sending it via mail. And over time, it morphed into the concept of streaming content and then ultimately evolved into content creation based on their statistical analysis.
- A question that businesses need to ask is how easy is it to make money? The harder it gets, the less well-equipped the business model is to serve the business.
- Businesses need to understand the heart of value. From there, they need to test their hypothesis to understand if their business model is profitable.
Reference
Business Model Canvas
Certification:
Project Management Institute (PMI)® accredited webinar: This webinar offers 1 leadership Professional Development Unit (PDU) to put towards your chosen certification. Use the PDU Claim Code: 4102VTBCI0.
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