A structural approach towards how an organization can create, deliver and capture value from its business.

1. It is a structural description of how
the orgnisation Creates, Delivers &
Captures value.
Business Model

2. Creation
Delivery
Capture
Structure is important
Value
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3. 1. Identify Core Competency, the collective learning of an organization that
brings together knowledge, skills, and technology (what you know?). To
understand core competencies, dig into the following 3 questions –
i. What are the areas of knowledge and skills your group possesses?
ii. Are any of these areas currently beat in industry?
iii. Which of these areas produce the greatest differentiated value for
customers?
2. Identify Capabilities, competitively relevant activities performed with key
resources (what you do). To determine organization’s capabilities, ask
following 3 question –
i. What are your group’s top three capabilities?
ii. What evidence supports these as being comprised of competitively relevant
resources and activities?
iii. What are the top three capabilities of your most dangerous competitor?
Steps in Value Creation

4. 3. Make a value proposition, describes the rationale behind why customers
would choose this particular offering over others.
It can be broken down into four pieces:
i. Who: Customer to be served
ii. What: Need to be met or job to be done
iii. How: Approach to satisfy need or fulfill job
iv. Benefit: Customer’s advantage of using the offering
3 categories of benefits (from customers’ point of view) –
a. Quality (more effective)
b. Convenience (saves time)
c. Cost (save money)
Steps in Value Creation

5. Creation Design Marketing Delivery Support
• The deliver phase of the business model begins with the value chain, a useful
tool in visualizing how an organization delivers value to its customers. (how
you do it)
• The final aspect of the delivery phase of business model is the Channel, the
access point for the customers (where you offer it).
• Channels may include both direct (e.g. internet, sales force, retail outlet) and
indirect (e.g. manufacturer’s representatives, wholesalers, outside retail
stores) options.
• Use 3 questions to get started –
i. What are the pros and cons of direct versus indirect channels for your offerings?
ii. Which channels provide you with the greatest combination of access to your
taget customers and profit margins?
iii. How can your core competencies and capabilities be used to optimize these
channels?
Next step – Value Delivery

6. • Four ingredients to consider, how you will capture the value generated from
your offering –
1. Price: The amount customers pay for the offering
2. Revenue: Price multiplied by volume sold
3. Cost: Expenditure of resources to provide offering
4. Profit: Revenue minus cost
• Understand how the price will position our offering versus the competition,
which category price belongs –
a. Premium position
b. Moderate position
c. Discount position
• Cost can be describe in various ways, including fixed, variable, direct,
indirect and sunk
• For generation of profits, you have two primary levers – revenue and costs
Capturing created value!

7. 1. What: Offerings (products/services)
2. Who: Potential target customers
3. Why: Customer need or job fulfilled
4. Where: Channels to acess offerings
5. When: Time of access to offerings
6. How: Activities
In a Nutshell!

8. Danke SchÖn!