This document discusses key aspects of business models. It defines a business model and explains the importance of designing a winning business model. A good business model aligns with company goals, is self-reinforcing through virtuous cycles, and is robust. The choices a company makes in its business model around policies, assets, and governance have consequences that can be flexible or rigid. The Ryanair case study is used to illustrate how its business model choices helped it become a leading low-cost airline carrier in Europe. The relationship between strategy, business models, and tactics is also explained.

1. How to designe a
winning business
model
Harvard Business Review

2. Group Members
• Pany
• Khuong
• Ha Vi
• Tam
• Steve Y. Bell

3. Introduction
a. Definition
• The story that explains how an enterprise
works (Joan Magretta)
• The answer of who is and what does
customer value, how to deliver value at an
appropriate cost (Peter Drucker)
• 4 components; a customer value
proposition, a profit formula, key resources,
and key processes (Harvard Business
School’s Clay Christensen)
b. Business model innovation
• sustainable advantage
• deregulation,technological change,
globalization and sustainability create
innovation business model concept ( 2006,
senior executives across industries regard
developing innovative business models as a
major priority, 2009 follow-up study; seven
out of 10 companies are engaging in
business-model innovation, and an
incredible 98% are modifying their business
models to some extent.
1. Background information
of business model

4. c. The importance of designing a winning business model
 Business model fail
• Problem lies in companies’ unwavering focus on creating innovative models and
evaluating their effi cacy in isolation—just as engineers test new technologies or products
• The success or failure of a company’s business model depends largely on how it interacts
with models of other players in the industry
• When using different business model, difficult to predict outcome. Rivals become partner
in, faulty assessments of their strength, weakness and bed decision making
• The propensity to ignore the dynamic elements of business models results in many
companies failing to use them to their full potential
• Good business models create virtuous cycles that, over time, result in competitive
advantage. Smart companies know how to strengthen their virtuous cycles, weaken those
of rivals, and even use their virtuous cycles to turn competitors’ strengths into
weaknesses.

5. 2. The goal of business
model
• Smart companies’ business models generate cycles that, over time, make
them operate more effectively. By Ramon Casadesus-Masanell and Joan E.
Ricart

6. 3. How to design a
winning business model
• 3 characteristics of a good business model
• Is it aligned with company goals?
• Is it self-reinforcing?
• Is it robust?

8. THE CHOICES &
ITS
CONSEQUENCES
A component of Business Models
is CHOICES; which types are:
• Policy choices
• Asset choices
• Governance Choices

9. choices
• Policy choices: actions organization
takes across all its operation.( using non-union
workers, locating plants in rural areas, or
encouraging employees to fly coach class)
• Asset choices: tangible resources a
company deploys. (manuafacturing facilities or
satellite communication systems, for instance)
• Gorvernance choices: decision-
making rights over the other two.( should we own
or lease machinery)
• The choices have
consequences….

10. THE CHOICES &
ITS
CONSEQUENCES
The choices have
CONSEQUENCES, which the
types are:
• Flexible Consequences
• Rigid Consequences

11. consequences
• Flexible consequence: Responds quickly
when the underlying choice changes.
 Ex: choose to increase prices will
immediately result in lower volumes.
• Rigid consequences: reflected in
company’s culture of frugality. Built over time
through policies. Difficult to imitate.
 Ex: oblige employees to fly economiy class,
share hotel rooms, and work out of Spartan
offices is unlikely to disappear immediately,
evem when those choices change.

12. Importance of
Business Model

13. • This case talks about how important BM (business model) is. If considered BM as one
vehicle of business, the constituent will be a Strategy - Business Strategy, and Tactics -
tactics will be the operator, driving his car in any directions. The operation will lead to
more choices that company have to face, and each one will produce its different
output,and it also depends on many factors from outside. If good strategy gives
businesses the competitive advantage (competitive Advantage as case 1), the BM will
deliver the Sustainable Business Advantage (sustainable advantage) to be able to
stability and develop in a long time .

14. SAMPLE OF
RYANAIR
BUSINESS MODELRyanair in 1980’s…
• Took CHOICES to offer
excellent service & standardize
fleet.
• Need redesign due to
competitive market
• In early 1990’s, has been
transformed (radically) into a
low cost carrier

15. Ryanair
nowadays…
• Become the largest low cost carrier in
Europe.
• Take CHOICES on low fares, that:
 Align with its goal; “firmly establish itself as
Europe's leading low-fares”
 Self-reinforcing its virtuous cycle
 Robust; its has run for 20 years

16. BUSINESS MODEL
VS STRATEGY &
TACTICS
• These three are interrelated…
1. Strategy Contingent plan about which business model will be used; choices and
consequences are reflection of it
2. Business Model Logic of the company, how it operates, creates and capture values
3. Tactics Residual choices open to a company by virtue of a business model it employs.

17. Lessons learned
• To achieve better competitiveness, a company
should not only create a strategy but should
implement it into a good business model.
• A good business model is a model that aligns with
your goal, self-reinforcing and robust
• having a business model does not guarantee your
company to be successful
• Strategy, business model and tactics are
interrelated; strategy is design the car, business
model is the car and tactics is how we drive the car.

18. recommendations
• Our main recommendation for any company
who would love to be successful its branch
of activity is
1. To achieve better competitiveness, a
company should not only create a strategy
but should implement it into a good business
model
2. a company should use a business model
that covers all the qualities of a good
business model