Lean business modeling: The Simplest, Fastest, and Funnest Way to Visualize, Analyze, and Design Business Models
There are two distinct approaches on the spectrum of business modeling: "Fat" Business Modeling and "Lean" Business Modeling. Fat Business Modeling include the use of business modeling tools such as Porter's Value Chain and Five Forces; Kaplan & Norton's Balanced Scorecard and Strategy Map; Osterwalder's Business Model Canvas. Lean Business Modeling, which is pioneered by Rod King, has tools such as the Business Model Iceberg and Business Model Strip. The extreme end of Lean Business Modeling is occupied by the tool of the Business Model Strip which uses a graphical approach to business modeling: business models are represented using nodes (dots) and linkages (lines) as well as arrows to indicate dynamic relationships and interactions. A Business Model Strip consists of three engines: Customer Growth Engine, Enterprise Engine, and Value Engine. In the above presentation, the process of Lean Business Modeling is summarized using the example of three major retailers in the US: Wal-Mart, Target, and Costco. Advantages of using Lean Business Modeling include greater simplicity, speed, and fun especially in business model conversations, analysis, and design. In addition, Lean Business Modeling can be used to illustrate business model archetypes. Finally, diagrams of Business Model Strips can be expanded to Business Model Icebergs, Business Model Canvases, Strategy Maps, and Value Chains. Business Model Strips provide flexibility in design as the designer can zoom in and out of specific parts or engines of a Business Model Strip.
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Lean business modeling: The Simplest, Fastest, and Funnest Way to Visualize, Analyze, and Design Business Models
- 1. Lean Business Modeling RETAIL INDUSTRY: Wal-‐Mart vs. Target vs. Costo The Simplest, Fastest, and Funnest Way to Visualize, Evaluate, and Design Business Model Engines Register at www.visionaryd.com to learn more about the Lean Business Modeling. Lean Startup Coach. Dr. Rod King. rodkuhnhking@gmail.com & h;p://businessmodels.ning.com & h;p://twi;er.com/RodKuhnKing BUSINESS MODEL: MARKET REVENUE MODEL 1-‐Sided Market Business Model Engine (Strategy): Low Cost & Good Enough Quality Job To Get Done (JTGD): Obtain food, drinks, and hard goods Asset (Product) Sale Wal-‐Mart (Supermarket) Target (Supermarket) Annual SubscripRon (Membership) Asset (Product) Sale + Annual SubscripRon (Membership) Wal-‐Mart (Sam’s Club) Costco (Wholesale-‐ Supermarket) Customer (Payer) Supplier (Enterprise) Service (Membership) SubscripKon Payment Customer (Payer) Supplier (Enterprise) Goods Payment for Goods Customer (Payer) Supplier (Enterprise) Service (Membership)/ Goods SubscripKon Payment/ Payment for Goods/