The document discusses the key elements of an effective business model including the customer value proposition, profit formula, key resources and processes, revenue model, and cost structure. It provides examples of how companies like Tata Motors developed business models for products like the inexpensive Nano car. The document also outlines steps for reinventing a business model and discusses when a new business model may be required.

2. Business Model
It is the ability to generate profits or a process or system by
which we create profits.
It is a company's plan for how it will generate revenues and make
a profit. It explains what products or services the business plans
to manufacture and market, and how it plans to do so, including
what expenses it will incur.
Every Successful Company already operates according to a
effective Business Model !!!!!
Known as Revenue Model.

3.  Four interlocking elements in a Business Model
 Profit Formula
A profit formula is the blueprint that defines how the company creates
the values for itself while providing value to customers.
Start by setting the price required to deliver the CVP and then work
backwards from there to determine what the variable costs and gross
margin must be.
CVP (Customer Value Proposition)
A successful company is the one that has found a way to create the
value for its customers.
It is not possible to invent or reinvent a business model without
identifying a clear Customer Value Proposition

4. Revenue Model
How much money can be made
Margin Model
How much each transaction should need. To achieve desire profit levels.
Cost Structure
Direct cost , Indirect cost
Resource Velocity
How fast we need to turn over inventory, fixed assets and other assets and
overall how well we need to utilize resources to support our expected
volume and achieve our anticipated profits.
 Key Resources & Key Process
These tow elements describe how the value which is created will be delivered
to the customers and the company .

5.  Steps for Reinventing Business Model
1. Articulate what will make present business successful.
2. Watch for signals that the present model needs to change.
3. Decide reinventing the model is worth the effort.
4. Construct a Blueprint laying out how company will fulfill
the need for profit
5. Compare new model with existing model to see how much
to change it to capture the opportunity.

6. {

9. CUSTOMER VALUE PROPOSITION CVP
 Target the customer
 Job to be done
To solve an important problem or fulfill an important need for
the target customer
 Offerings
Helps customer perform a specific jobs with alternative offerings

11.  A Blueprint that defines how the company creates value for itself and
it’s customers.
 The model generates value for the company through factors such as
revenue model, cost structure, margins and inventory turnover.
E.g.- The Tata Groups' inexpensive car, the Nano, is profitable because the
company has reduced many cost structure elements accepted lower –than-
standard gross margins and sold the Nano in large Volumes to the target
market : first time car buyers in Emerging Market
PROFIT FORMULA

13.  The Company has the people,technology,products,facilities,equipments
and brand required to deliver the value preposition to the targeted
customers.
 And it has processes (training, manufacturing, service)to leverage those
resources
E.g. –For Tata Motors to fulfil the requirements of the Nano's profit
formula, it had to reconceive how the car is designed, manufactured, and
distributed.it redefined its supplier strategy, choosing to outsource a
remarkable 85% of the Nano’s components and to use 60% fewer vendors
than normal to reduce transaction cost
KEY RESOURCES & PROCESSES

15. An organization serves one or several Customer Segments

16. It seeks to solve customer problems and satisfy customer needs with value
propositions

17. Value propositions are delivered to customers through
communication, distribution, and sales Channels

18. Customer relationships are established and maintained with each Customer
Segment

19. Revenue streams result from value propositions successfully offered to
customers

20. Key Resources are the assets required to offer and deliver the previously
described elements

21. Some activities are outsourced and some resources are acquired outside the
enterprise

22. The business model elements result in the cost structure

24. Pursuing a new Business Model, that’s not
New or Game Changing to Your Industry
or Market, is a waste of Time & Money

25.  When a New Business Model is Required
In this 4th industrial revelation of Bangladesh, fulfilling
people’s need has become a tough job for a local company.
People are evolving their class. In upcoming decade people’s
need are going to enhance as well. So companies need to
concentrate on catching this emerging market by identifying
an important unmet job a target customer needs
done; blueprint a model that can accomplish that job
profitably for a price the customer is willing to pay; and
carefully implement and evolve the model by testing
essential assumptions and adjustment.

26. What Local Companies must do
 Focus on branding
 Develop and qualify the model they have
 Quality and fancy outlook
 Best quality at cheaper price overviewing profit formula
 Create big opportunity to do a successful business
 Differentiate between customer’s focus over quality or price
 Take disruptive steps to conquer people’s heart
 Sophisticated plans to do more authentic online business

28.  Common Barriers of Successful Business
 Insufficient Wealth
 Access
 Skill
 Time

29. What is the secret ingredient of successful
business?

31. When the game gets tough ,
Change the game !!!