What is a BUSINESS MODEL? First, ReInvent Your Story. Then, Document and ReInvent Your Business Model

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Business model thinking is on the rise. A lot of organizations, big and small, are documenting and reviewing their business models with a view to gaining competitive advantage. From my observation, however, the concept of a business model is mainly understood at a superficial level. Many people are quick to start filling boxes on their business model without understanding the fundamentals of business model thinking and design. This article introduces a unique approach that solves that problem. This article introduces the concept of the "Business Model Story," a simple-to-understand, lively, and entertaining way to have business model conversations as well as business model reinventions.

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  • @RodKing
    Rod, please allow me to elaborate more on my previous comment. Influencers accelerate the AIDA Cycle. Influencers are catalysts. Some customers influence others to buy even though they do not have to put their hands in their pockets. Like children influencing their parents to go for a meal not because of their desire of eating, but for the gift that they get with children' meals. the parents end buying food that is not their favorite to please their kids.
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  • @RodKing
    Rod, as for my first point on catalysts I do not know of a firm answer, but I try to make a guess. May be communication tools provide an example. These tools do not change the result, but accelerate the AIDA Cycle. Moving from Awareness to Interest, Desire and ending in Action may take a long time. Effective communication might reduce the looping time. This is just to think loudly and I might be off the mark.
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  • @hudali15: Ali, If I understand your first point right, it is difficult to know beforehand who or what the catalyst is. From my experience, the catalyst for a business model story usually comes from the environment usually from hypercompetition and/or declining profitability. In larger corporations, the catalyst may be the board of directors and/or shareholders. I agree with your second point that the protagonist's wishes is influenced by external forces in the environment. Sometimes, 'PESTLIED' trends act like stimuli that trigger action by the protagonist or suppliers. What I like about your points is your highlighting of the role of the environment in the business model story. Too often, the presentation of business models ignores the environment and making unrealistic business modeling activities. In contrast, the business model story underscores the importance of the environment in business model innovation.
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  • Rod, great ideas. I surely concur with your story. I remember I wrote a presentation on 'the Chemistry of Story Telling' on SS that extends support to my appreciation of this presentation. If I may borrow ideas from that presentation then I would suggest two more ideas:
    1- Who is the catalyst to get the story right? Catalysts accelerate the story without changing the outcome.
    2- The protagonist wishes may be influenced by the environment.

    A short, but value filled presentation.
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What is a BUSINESS MODEL? First, ReInvent Your Story. Then, Document and ReInvent Your Business Model

  1. 1. What is a Business Model? First, ReInvent Your Story. Then, Document and ReInvent Your Business Model By Rod King, Ph.D. There are myriad definitions of a business model. Many definitions of a business model are abstract, static, and boring. In today's world of transient competitive advantage, the last thing an entrepreneur, a startup, an organization, or executive wants is an abstract, static, and boring description of its business model. Employees and other stakeholders would also like to be engaged in business model conversations that are simple-to-understand, lively, and entertaining. For me, a business model is like a 3-legged stool that tells the story of how an organization creates, delivers, and shares value with regard to a protagonist. The first leg of a business model story is the Value Creation Act. The second leg is the Value Proposition and Delivery Act. The third leg is the Value Sharing (Profit) Act. The protagonist (hero) of the story is a customer who is struggling to get a most important task or job done amidst obstacles, constraints, and barriers in his/her environment. The protagonist has fears, uncertainties, and doubts. Nevertheless,
  2. 2. the protagonist (hero) wants to minimize the pain while maximizing the delight of getting the job done. No doubt, the protagonist has higher goals and aspirations. In the business model story, the enterprise is one of several competitors that offers the protagonist a tool (product/service) to cost effectively overcome the obstacles and get the job done. Like for the enterprise, the protagonist has choices and trade- offs to make in order to achieve the desired outcome. So, what does the enterprise know about the situation of the protagonist and in particular, how the protagonist lives, thinks, and acts? What are risks and rewards in the life of the protagonist? The enterprise may have to "get out of the building" while asking, testing, and validating answers to several questions. For instance, what are the protagonist's critical problems and constraints? What job does the protagonist most struggle to get done? How would a competing enterprise make its case to the protagonist ... in no time? What would be the enterprise's Magnetic Value Proposition (MVP) as well as strategy for the protagonist's success? How does the protagonist measure success? How would the protagonist be reached or communicated with? What sort of relationship should the enterprise have with the protagonist? What would be the best tool for the protagonist? Which tool (product/service) would the protagonist eventually "hire" to get the job done? Why? In short, what would be the value or delight/pain ratio of the protagonist's selected tool? How would the selected tool (product/service) be similar to but different from competing tools (products/services)? A business model (story) cannot stand or function if any leg is missing. However, the riskiest part of a business model is its second leg: the Value Proposition and Delivery Act. While the Value Creation Act is largely within the control of the enterprise and takes place "inside the building," the Value Proposition Act is not. The Value Proposition Act is largely unpredictable and takes place "outside the building" in an environment that is increasingly volatile, uncertain, complex, and ambiguous. So, always first address the Value Proposition Act that directly speaks to the problems, concerns, and fears of the protagonist (customer or hero). The survival of the enterprise depends on its second leg, the Value Proposition Act. The survival and happiness of the protagonist also depend on the second leg of the business model. To quickly document, test, and validate as well as reDesign the Value Proposition Act of a business model, you may wish to take a look at: http://goo.gl/AFLCl Rod. July 10, 2013. http://businessmodels.ning.com & rodkuhnhking@gmail.com & http://twitter.com/RodKuhnKing

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