This document discusses business modeling and its importance. It contains the following key points in 3 sentences: 1) Business modeling creates a business "mindset" from the start, ensures consistency across teams, and keeps a customer focus. 2) The document analyzes the terms "business" and "model" and provides definitions. 3) It discusses identifying the most valuable customers to organize around, determining what unique value is offered to customers, and how that value is delivered.

1. Business Modeling
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2. business modeling

3. Business model as the backbone of
how teams plan and act
Business plan
Strategic Financial
1 3
planning planning
Business Business
model Case
Team Rollout
Aspects Plan
Knowledge Project
planning 2 4
planning
Business modeling as a guidance creates:
! 

a business “mindset” from day one
consistency between teams
 a customer focus
Business modeling 14

4. Analysis of the term ‘business model’…
“The activity of buying and selling goods
and services, or a particular company that
does this, or work you do to earn money.”
BUSINESS… …MODEL
“A representation of something, either as a
physical object which is usually smaller than the
real object, or as a simple description of the
object which might be used in calculations”.
What is a business model? 15

5. From marketing segments to
strategic segments
1 most valuable customer: on which customers are we focussing?
2 what we offer: What do we deliver and how unique is this?
3 how we deliver
Searching for strategic segments
 value drives
 asks for different value concepts
Strategic segments 16

6. The challenge
! Choose the most
important customers
and organize around them
WHO? WHAT? HOW?
 Unsatisfied customers  Higher value  Lower costs
 Non customers (yet)  Lower prices
The Challenge 17

7. Who is the most valued customer?
businessman who doesn’t pay his own bill Everyone who’s paying for their own ticket
Case 18

8. How unique is the value curve?*
Value attributes Low Medium High
worldwide network
wide choice in distribution
new airplanes
punctuality
seat selection
business class
seat spacing
in-flight meals
frequent flyer miles
refunds if plane is late
flexibility to change flight
refund for missed flight
price attractiveness
*based on ‘marketing as strategy’, nirmalya kumar Case 19

9. Different segments asks for a different
of realization of the value model
flexibel single fare
WHAT? full-service “no frills”
high prices Low prices
Purchasing Integrated outsourced
Operations Multiple type of planes Single type aircraft
Short- and long-haul routes point-2-point routes
Prime airports (hubs) Rapid turnaround
Assigned seating No 0n-flight meals
HOW? Marketing Segmented customers Everyone is equal
Varied meal services no frequent flyer programs
Frequent flyer program one way ticket only
Variable pricing
Distribution Travel agents/worldwide systems direct sales
*based on ‘marketing as strategy’, nirmalya kumar Case 20

10. Business modeling in all it’s aspects
WHO? WHAT? HOW?
Target group Proposition Delivery model
distribution product / service partner network
target group core processes
communication revenue model coorporation model
€
sources: G. Hamel - Leading the Revolution – 2000; A. Osterwalder - How to Describe and Improve your
Business Model to Compete Better – 2005; N. Kumar - Marketing as Strategy - 2004 Business model 23

11. From dream to business model
WHO? WHAT? HOW?
Target group Proposition Delivery model Correlation between definitions
distribution WHAT?
product / service HOW?
partner network
group target group
Proposition Delivery model
core processes
Business model
communication revenue model coorporation model
 What value do we offer?
distribution product / service
€ partner network
 How do we realize it?
core processes
communication revenue model coorporation model
Earning model
€  How do we earn money with
this business model?
Business case
 What is the size of the target group?
 How much are they willing to pay?
 What are the cost to deliver?
 Is the P&L positive, or are there other
advantages?
Business model 24

12. Valued Customer
 Who are our valued customers?
 Are there customers who are unhappy with all the current offerings of the
industry?
 Are there customers who have a need but are not being currently served by
the industry?
 Are we trying to reach customers who are unaware that they need our
product? If so, how are we going to create the need?
 Who is the user? The buyer? The influencer? The payer? What are the
preferred criteria of each and their power in the buying decision?
 Is the target segment large enough to meet our sales objectives?
 What is the growth rate of the target segment?
3V’s 25

13. Value Proposition
 What are the core needs we are trying to address with our value proposition?
 Does the value proposition fit the needs of our valued customers?
 What benefits are we actually delivering to the customers?
 Is our value proposition differentiated from the competitors or are we
positioning in a crowded space?
 Are our value proposition claims reinforced by underlying product and service
features?
 Are we positioning on attributes that we can defend against competitive
attacks?
3 V’s 26

14. Value Network
 Can we serve the valued customers with the value propositions at a profit?
 Do we have the necessary capabilities to deliver the value proposition? If not,
could we acquire or partner with them?
 Would serving the valued customers have negative consequences on our
existing customers of businesses? If so how are we going to control for this?
 Which high-cost or low-value-added activities could be eliminated, reduced, or
outsourced in our value network?
 Where are the advantages of scale in our value network? Can we maintain
scale while not losing flexibility?
 How different is our value network from the rest of the industry?
 What is our break-even point? Could we lower it by slightly varying the value
network?
3V’s 27

15. Examples of earning models
 time spent & fees
 subscription
 performance based
 spot market
 (share of) value creation
 % of revenues/profits generated
 % of cost cutting
 sales minus purchase
 web & portal related
 hardware & consumable
 software
 add on services
Earning models 28

16. More information about innovation
Stationsplein 1
P.O. Box 907
3800 AX Amersfoort
Colofon The Netherlands
+31 33 467 74 70
woutervanderburg@thebridge.nl
www.thebridge.nl
colofon 34