Transforming a Firm’s Business Model for Performance Optimization
Transforming a Firm’s Business Model
for Performance Optimization
Dr. Elijah Ezendu
FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,
PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr
“Business Model is the logic behind value
“Business Model is a way of creating and capturing
value within a market network of producers,
suppliers and consumers”
- Bill Vorley and Mark Lundy
“Business Model is nothing else than a
representation of how an organisation makes or
intend to make money”
- Alex Osterwalder
“In all enterprises, it’s the business
model that deserves detailed
attention and understanding”
- Mitch Thrower, The Attention Deficit Workplace: Winning Strategies
for Success in Today’s Fast-Paced Business Environment.
Steps for Transforming a Firm’s Business Model
Elijah Ezendu, Business Model
Business Model Analysis
This is the critical identification and
evaluation of a business model for
purpose of ascertaining its internal
alignments to operational effectiveness
and external alignments to efficiency of
the total business stream.
Business stream is a schema that shows the five
layers in business development framework,
from business intent to business performance.
Business intent is the description and
accentuation of a structured focus, highlighting
vision, mission, goals and objectives, while
symbolizing direction and destiny.
Business strategy represents clearly identified
feasible route for steering activities onto
attainment of goals and objectives.
There are three levels of business strategy.
Three Levels of Business Strategy
• Corporate Level Strategy
• Business Unit Level Strategy
• Functional/Operational Level Strategy
Corporate Level Strategy
This comprises overall strategy elements for the firm.
Resolving issues pertaining to mix of businesses and
means for coordination and integration of individual
It’s concerned with the following:
Managing Activities and Business Interrelationships.
Business Unit Level Strategy
This involves translation of the corporate level strategy into
suitable strategies for individual business divisions or
portfolios, required to develop and sustain competitive
advantage for products or services of the firm.
This is concerned with the following:
Influencing the layout of competition by means of action such
as vertical integration.
Positioning the firm’s business against competitors.
Modifying actions to cope with changes in demand, supply,
regulations and technology.
Developing useful partnerships with customers and other
Functional/ Operational Level Strategy
This involves development of strategies for
functional catchments such as production,
finance, human resource, research, logistics,
business development and materials
It’s concerned with implementation of the
strategic plans established at corporate and
business unit levels in order to ensure
functional silos partnership in organisational
Business Model is a blueprint pinpointing the
flow of articulated value from a firm to its
customers, and the dimensions of returns to
• Business model is a bridge providing appropriate
linkage between business strategy and business
• Without a well-structured business model in place,
there would be a disconnect between business
strategy and business process.
• Business Model is the drawing board for designing
• Business Model is the heart of Business Success.
Characteristics of Business Model
Business Model Canvas
Alexander Osterwalder & Yves Pigneur, Business Model Generation
Business Model Template
Elijah Ezendu, Business Model
Alliance is an agreement between firms for
achievement of defined goals and building
mutual interdependence while remaining
The two alliance structures are as follows:
• Transient Alliance
• Strategic Alliance
Types of Alliance
Alliances can exist between a firm and its suppliers, distributors,
competitors and non-competitors.
Some types of alliances are as stated below:
• Preferred Suppliers
• Joint Production
• Minority Investments
• Multi-Partner Consortia
• Joint Research and Development
• Equity Joint Venture
The Place of Alliance
Alliance provides opportunities for leveraging
external capabilities so as to evolve value,
especially where outright acquisition may be
unnecessary or premature.
This represents the major work concentration
of a firm in order to produce well-defined
value proposition. Ascertainment of key
activities gives room for mapping aggregate
work requirements and ancillary projections.
Coherence is a cultural thrust that provides
effective connectivity for all the components
of business model, fusing them together in
characteristic intimacies, and facilitating
uniform drive onto specified goals and
These are the resources required for producing
a particular value proposition.
The four types of resources are as follows:
• Material Resources
• Physical Resources
• Financial Resources
• Intellectual Resources
Value propositions represent the whole sets of
values which a firm lays out to its customers,
in order for them to find consummate worth
Value Propositions stand as the pivot of
Value Propositions give room for development
of interdependencies between a firm and its
This deals with identification and inventory of
the diversity of relationships which a firm
should nurture with its customers. Where the
customers are segmented, relationships may
vary from one segment to another. If the
customers are not segmented, then the
ensuing relationships would be
Goals of Customer Relationships
• Customer Information Services
• Customer Acquisition
• Customer Retention
• Price Optimization
• Continuous Value Propositions Realignment
This is the active strength that affects a person’s
opinion, thereby inducing action in a
It provides productive link to customers.
It’s operability depends on pedestals of
acceptance and belief.
Types of Influence
• Social Influence
• Brand Influence
• Consumer Influence
• Religious Influence
• Economic Influence
• Environmental Influence
• Influence Predicated on National Pride
Channels are paths through which a firm moves
its value proposition to target customers, by
means of designated sales points, distributors,
and effective communication.
These are the particular set of customers that a
firm intends to be offering the right value
proposition for their identified needs or wants.
Customers can be segmented, aggregated or
selected with specificity in the form of a niche.
The cost structure of a business model highlights
profiles of incurable costs and the ratio of
fixed costs to variable costs.
It facilitates identification of cost-containment
method that would be deployed.
It allows for identification of cost management
techniques to mitigate effects of identified
Types of Cost Structures
• Cost Leadership
• Value Maximization
• Integrated Cost Leadership & Value
These are applicable means of obtaining
revenue from customers as a measurable and
deserved return for values delivered.
Testing a Business Model
Elijah Ezendu, Business Model
Dr Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise
in Interim Management, Strategy, Competitive Intelligence, Transformation, Restructuring, Turnaround
Management, Business Development, Marketing, Project & Cost Management, Leadership, HR, CSR, e-
Business & Software Architecture. He had functioned as Founder, Initiative for Sustainable Business
Equity; Chairman of Board, Charisma Broadcast Film Academy; Group Chief Operating Officer, Idova
Group; CEO, Rubiini (UAE); Special Advisor, RTEAN; Director, MMNA Investments; Chair, Int’l Board of
GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training),
Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management
Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Lead
Consultant/ Partner, JK Michaels; Turnaround Project Director, Consolidated Business Holdings Limited;
Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Chief Advisor/ Partner, D & E; Vice Chairman of Board, Refined Shipping;
Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria;
Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic
Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria;
Country Manager (Nigeria) & Adjunct Faculty (MBA Programme), Regent Business School, South Africa;
Adjunct Faculty (MBA Programme), Ladoke Akintola University of Technology; Editor-in-Chief, Cost
Management Journal; Council Member, Institute of Internal Auditors of Nigeria; Member, Board of
Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business
Administration and Fellow of Professional Institutes in North America, UK & Nigeria. He is Innovator of
Corporate Investment Structure Based on Financials and Intangibles, for valuation highlighting
intangible contributions of host communities and ecological environment: A model celebrated globally
as remedy for unmitigated depreciation of ecological capital and developmental deprivation of host
communities. He had served as Examiner to Professional Institutes and Universities. He had been a
member of Guild of Soundtrack Producers of Nigeria. He's an author and extensively featured speaker.