1、Business model“Business model”was one of the great buzzwords of the Internet boom.And as the inevitable counterreaction played out,the concept of the business model fell out of fashion nearly as quickly as appendage itself.For while its true that a lot of capital was raised to fund flawed business m
2、odels,the fault lies not with the concept of the business model but with its distortion and misuse.Telling a Good Storyv Business models are anything but arcane.They are stories that explain how enterprises work.v A good business model answers the age-old questions.v It also answers the fundamental
3、questions.Telling a Good StoryA successful business model represents a better way than the existing alternativesCreating a business model is,then,a lot like writing a new storyAll new business models are variations on the generic value chain underlying all businessesTwo parts:all the activities asso
4、ciated with making something and selling somethingMichael Bronners examplev Like his classmates,Bronner had occasionally bought books of discount coupons for local stores and restaurants.v The key to unlocking that potential was wider distribution putting a coupon book in every students backpack.Bro
5、nner had a better idea.Michael Bronners examplevNow Bronner could make an even more interesting proposal to neighborhood business owners.Two problemsFirst,students were often strapped for cash.Second,Bronner needed to get the books to students at a cost that wouldnt eat up his profits.Michael Bronne
6、rs examplevEastern Exclusives,his first company,was born.His innovation wasnt the coupon book but his business model;It worked because he had insight into the motivations of three sets of characters:students,merchants,and school administratorsTying Narrative to NumbersvThe term“business model”first
7、came into widespread use with the advent of the personal computer and the spreadsheetvA single,base-case forecasta little sensitivity analysisspreadsheetTying Narrative to Numbersv Of course,a spreadsheet is only as good as the assumptions that go into it.v EuroDisney VS Disneys U.S.parksBefore the
8、personal computer changed the nature of business planning,most successful business models were created more by accident than by design and forethoughtDesign and forethoughtaccidentTying Narrative to Numbers every decision,initiative,and measurement provides valuable feedback.When managers operate co
9、nsciously from a model of how the entire business system will work you start with a hypothesis,which you then test in action and revise when necessary.Business modeling is the managerial equivalent of the scientific method Text(2)What About Strategy?va business model isnt the same thing as a strateg
10、yvBusiness models describe,as a system,how the pieces of a business fit together.But they dont factor in one critical dimension of performance:What About Strategy?A competitive strategy explains how you will do better than your rivals.And doing better,by definition,means being different.Too many fle
11、dgling companies rushed to market with identical business models and no strategies to differentiate themselvesWal-Mart examplev You might think that the giant retailers success was a result of pioneering a new business model,but thats not the case.Walton borrowed a lot of ideas for his early stores.
12、But it was what he chose to do differently the ways he put his own stamp on the basic business model that made Wal-Mart so fabulously successful.His model was the same as Kmarts,but his strategy was unique.Wal-Mart examplev From the very start,for instance,Walton chose to serve a different group of
13、customers in a different set of markets.vWal-Mart also took a different approach to merchandising and pricing than its competitors did that is,it promised customers a different kind of value.al-Mart promised national brands at everyday low prices.Wal-Mart exampleThe business model of discount retail
14、ing has attracted many players since it emerged in the 1950s.Most of them have failed.Wal-Mart offers branded goods for less to a carefully chosen customer base.They failed to find distinctive ways to compete.Target built a strategy around a different kind of value style and fashion.A Good Model Is
15、Not Enoughvstory of Dell Computer Michael Dell created his own model:While other personal-computer makers sold through resellers,Dell sold directly to end customers.Dell Computer examplev In this case,Dells business model functioned much like a strategy:It made Dell different in ways that were hard
16、to copy.While Dells direct business model laid out which value chain activities Dell would do(and which it wouldnt do),the company still had crucial strategic choices to make about which customers to serve and what kinds of products and services to offer.Dont get lost about the role that pure strate
17、gy has played in the companys superior performance.Dell Computer exampleNow that everyone in its industry is selling direct,Dells strategy has shifted to deal with the new competitive realities.The underlying business model remains the same.The strategic choices about where to apply the model which
18、geographic markets,which segments,which customers,which products are what change.Dell Computer examplevClarity about its business model has helped Dell in another way:u Because a business model tells a good story,it can be used to get everyone in the organization aligned around the kind of value the company wants to create.TodayvToday,“business model”and“strategy”are among the most sloppily used terms in business.Its true that any attempt to draw sharp boundaries around abstract terms involves some arbitrary choices.Definition brings clarity.
