This document discusses several patterns of business models that can be identified. It describes the pattern of unbundling, where a business is divided into customer relationship, product innovation, and infrastructure areas. It also outlines the long tail pattern of selling many niche products in small quantities. Another pattern is the multi-sided platform that connects different user groups. The document examines free business models where one user group subsidizes another. Finally, it introduces the open business model pattern of collaborating systematically with external partners.

1. Patterns of Business Model
Generator
Prepared by Hani Tarabichi
From Business Model Generator
Book

2. Patterns of BMG
• Similarities in business models exists and can
be made into patterns
• A single business model can incorporate
several patterns at the same time

3. Patterns of BMG - Unbundling
• A business usually is a bundle of:
– Customer relationship business area
– Product innovation business area
– Infrastructure business area
• These business areas have different economic
systems, competitiveness, and cultural
imperatives

4. Patterns of BMG - Unbundling
• Customer relation: Finding, acquiring, and
keeping customers and building relationships
with them.
• Product innovation: Develop new attractive
products.
• Infrastructure business: Build and manage
platform for high volume repetitive tasks.

5. Patterns of BMG - Unbundling
• Companies are to focus on:
– Operational excellence
– Product leadership
– Customer intimacy

6. Patterns of BMG - Unbundling

7. - Unbundling

8. Patterns of BMG – Long Tail
• Long Tail business model aims at Selling Less
of More.
• Offering large number of niche products which
sells relatively infrequently
• Requires:
– Low inventory cost
– Strong platform

9. Patterns of BMG – Long Tail
• From selling small hit items in large volumes
• To selling very large number of niche products
in small quantities
• It works best with user generated content.
• Lulu.com
• Lego

10. Patterns of BMG – Multi Sided
Platform
• MSP facilitates interaction between different
groups
• If it grows rapidly it could form network effect
• Creates value as intermediary connecting
different interdependent groups together.
• Chicken & egg dilemma

11. Patterns of BMG – Free as a business
model

12. Patterns of BMG – Free as a business
model
• At least one substantial customer segment is
able to continuously benefit from a free of
charge offer.
• None paying customers are financed by
another part of the business model or by
other customer segment

13. Patterns of BMG – Free as a business
model
• Sometimes the MSP subsidize a customer
segment in order to attract users.
– How to price?
– Who to subsidize?
– How can we attract sufficient number of
customers for each side?
– Which side is more price sensitive?
– Will the other side generate enough revenues to
cover the expenses and costs of the subsidized
side?

14. Patterns of BMG – Free as a business
model
• Examples:
– Free offer based on MSP: Metro NP
– Freemium model: Flicker/red hat/ LinkedIn
– Bat & Hook model: Free inexpensive initial offer
turns customers into repeat purchases
• Loss leader: Skype
• Razor & Blade: Gillette, HP, Mobile operators

15. Patterns of BMG – Free as a business
model

16. Patterns of BMG – Free as a business
model

17. Patterns of BMG – Free as a business
model

18. Patterns of BMG – Open Business
Model
• Creates and captures value by systematically
collaborating with outside partners
– Outside-in: Exploiting external ideas within the
firm
– Inside-out: Providing external partners with ideas
or assets lying idle within the firm

19. Patterns of BMG – Open Business
Model

20. Patterns of BMG – Open Business
Model