Business Model Generation and Audit

Business Model Generation & Audit

Content: - What is a Business Model?

- The Business Model Generation Process - The Business Model Generation Canvas

www.tbkconsult.com

- TBK Consult Business Model Services

1

When we are exposed to a new company or business activity one of the first questions we ask is: What is the business model?

The business model has become the de facto standard for explaining how a business delivers value to its’ stakeholders and profits to its’ owners.

A well-documented business model is especially important when we need to motive new employees, new investors, new partners or other new key players to support our business system. They all want to understand the big picture, assess the viability and the risk, and understand how they can benefit by participating.

Business Model Generation

What is a Business Model?

The term “Business Model” became a standard part of any business discussion from the beginning of this century.

The Business Model is a blue print describing how a business operates and especially explains how it generates value for its’ stakeholders and a profit for its’ owners.

“In theory and practice the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies.

Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.” 1 TBK Consult is supporting clients with Business Model Generation and Audits based on the “Business Model Generation” approach developed by Alexander Osterwalder and & Yves Pigneur2.

The Business Model Generation approach is especially valuable in situations with multi-sided market constructions and in situations with high volume products and services.

The Business Model Generation process 1. Identify Customer Segments 2. Define Value Propositions 3. Define Value Chain Channels The process of generating, testing and documenting a business model has the following nine steps:

4. Define Customer Relationships 5. Identify and quantify Revenue Streams 6. Identify Key Resources 7. List Key Activities

www.tbkconsult.com

8. Identify Key Partnerships 9. Identify and quantify the Cost Structure 1

2

2

http://en.wikipedia.org/wiki/Business_model Business Model Generation, Osterwalder and & Yves Pigneur, 2010. ISBN 978-0470-87641-1

Business Model Generation

The Business Model Generation Canvas3 Osterwalder and Pigneur have developed the “Canvas”, which is a graphic representation of the generic business model elements. The Canvas supports the visualization of a business model. It is an extremely valuable tool in workshops, when “left” and “right” brained people are reviewing and discussing how business models should or could work.

TBK Consult Business Model Services Introduction to Business Model definitions, concepts, terms and processes

www.tbkconsult.com

TBK Consult provides the following services associated with business model generation and audits:

Business Model generation and audit facilitation Business Model research and assessments (finding external data and assessing external feasibility of business model components) Business Model documentation

3

3

The Business Model Generation canvas is available as an App for the iPad and can be downloaded as posters from www.tbkconsult.com

TBK-MBFS-001