Patterns of Business Model Generator

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Patterns of Business Model Generator

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Patterns of Business Model Generator

  1. 1. Patterns of Business Model Generator Prepared by Hani Tarabichi From Business Model Generator Book
  2. 2. Patterns of BMG • Similarities in business models exists and can be made into patterns • A single business model can incorporate several patterns at the same time
  3. 3. Patterns of BMG - Unbundling • A business usually is a bundle of: – Customer relationship business area – Product innovation business area – Infrastructure business area • These business areas have different economic systems, competitiveness, and cultural imperatives
  4. 4. Patterns of BMG - Unbundling • Customer relation: Finding, acquiring, and keeping customers and building relationships with them. • Product innovation: Develop new attractive products. • Infrastructure business: Build and manage platform for high volume repetitive tasks.
  5. 5. Patterns of BMG - Unbundling • Companies are to focus on: – Operational excellence – Product leadership – Customer intimacy
  6. 6. Patterns of BMG - Unbundling
  7. 7. - Unbundling
  8. 8. Patterns of BMG – Long Tail • Long Tail business model aims at Selling Less of More. • Offering large number of niche products which sells relatively infrequently • Requires: – Low inventory cost – Strong platform
  9. 9. Patterns of BMG – Long Tail • From selling small hit items in large volumes • To selling very large number of niche products in small quantities • It works best with user generated content. • Lulu.com • Lego
  10. 10. Patterns of BMG – Multi Sided Platform • MSP facilitates interaction between different groups • If it grows rapidly it could form network effect • Creates value as intermediary connecting different interdependent groups together. • Chicken & egg dilemma
  11. 11. Patterns of BMG – Free as a business model
  12. 12. Patterns of BMG – Free as a business model • At least one substantial customer segment is able to continuously benefit from a free of charge offer. • None paying customers are financed by another part of the business model or by other customer segment
  13. 13. Patterns of BMG – Free as a business model • Sometimes the MSP subsidize a customer segment in order to attract users. – How to price? – Who to subsidize? – How can we attract sufficient number of customers for each side? – Which side is more price sensitive? – Will the other side generate enough revenues to cover the expenses and costs of the subsidized side?
  14. 14. Patterns of BMG – Free as a business model • Examples: – Free offer based on MSP: Metro NP – Freemium model: Flicker/red hat/ LinkedIn – Bat & Hook model: Free inexpensive initial offer turns customers into repeat purchases • Loss leader: Skype • Razor & Blade: Gillette, HP, Mobile operators
  15. 15. Patterns of BMG – Free as a business model
  16. 16. Patterns of BMG – Free as a business model
  17. 17. Patterns of BMG – Free as a business model
  18. 18. Patterns of BMG – Open Business Model • Creates and captures value by systematically collaborating with outside partners – Outside-in: Exploiting external ideas within the firm – Inside-out: Providing external partners with ideas or assets lying idle within the firm
  19. 19. Patterns of BMG – Open Business Model
  20. 20. Patterns of BMG – Open Business Model

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