Chapter 9

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  • 1. CHAPTER 9
    APPRAISAL OF BUSINESS MODEL
    Comparing one business model to another
    Elements of an appraisal/review
    Juniper Networks business model
    Appraise that model
  • 2. ELEMENTS OF APPRAISING BUSINESS MODELS
    Measurement of how good a business model can be done using 3 levels
    Measure of profitability
    Profitability prediction
    Business model components attributes
  • 3. Table 9.1 pg 161
    Profitability Measures
    LEVEL 1
    Profitability Predictor
    Measures
    rate
    LEVEL 2
    Components Attribute
    Measures
    • Business model
    components
    LEVEL 3
  • 16. Profitability Measures
    To measure how good a business model is – to compare its profitability to its competitors
    Use earnings & cash flow, if earnings & cash flow are +ve than business is good
    Problem is, start-ups has good business models but does not show profit.
    Needs more reliable form of measurement
  • 17. Profitability Predictor Measures
    Knowledge based product needs measurement in forms of profit margin, revenue market share, & revenue growth rate
    Compare it with its industry’s competitors
    Higher means good
  • 18. Business Model Components Measures
    Measures the source of the business model to analyze its usefulness
    10 components of business models, compare each one.
    Check benchmark questions to further detail
    Table 9.2 pg 163