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BUSINESS MODELS
Professor : Luis Torras
Head Business Policy Department.
EADA Business School
Barcelona, Spain
WHY BUSINESS MODELS MATTER
Business model
The mechanism by which a business intends to generate revenue and profits
Value proposition
The unique added-value an organisation offers customers .
Market segment
How organisations target different customer groups, product markets and geographic markets
Revenue-generation model
Mechanisms to generate revenue (sales, licensing, franchising, leasing)
Cost structure
Proportion of fixed, variable and mixed costs within the organisation
Value chain
The interlinked set of activities required to design, procure, produce, market and distribute a product or service


Source: Magretta,Joan, 2002
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BUSINESS MODEL
Basic questions:
Who is the customer?
What does the customer value?
How do you make money in this business?
New business model serves to:

1.-   design a new product for an unmet need ( traveller´s checks)
2.-   find a better way of making, selling, distributing an existing product or service (eBay, DELL)

Through variations on the generic value chain

Activities associated with making
Activities associated with selling  
  BUSINESS MODEL
The business model consists of a :

Narrative test

Numbers test
A   COMPELLING, COHERENT NARRATIVE WITH THE POTENTIAL TO BECOME A PROFITABLE BUSINESS
Failure Narrative Test:
Priceline Webhouse Club
Numbers Test:
Euro Disney
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BUSINESS MODEL AND STRATEGY

BUSINESS MODEL

STRATEGY
Planing tool that focusses attention on how all the elements of the system fit into a working unit
Strategy becomes a key element when you run into competition. A successful strategy explains how you do better than your rivals.
Successful   business models
are difficult to replicate
They are not the same

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