Building Blocks To A Successful Business Model

1093 words - 4 pages

According to Osterwalder and Pigneur (2010), a business model is utilized to demonstrate the rationalization of the methods an organization utilizes to create, capture and deliver value. The business model serves as a blueprint for strategy implementation through the processes, structures and systems of the organization; accordingly, nine building blocks can be utilized to describe the logic behind the company’s intentions to make profit (Osterwalder & Pigneur, 2010). The nine building blocks named by Osterwalder and Pigneur (2010) are customer segments, value propositions, channels, customer relationships, revenue stream, key resources, key activities, key partnerships and cost structure. These building blocks are used to describe the: imperative groups of organizations or people that will be served, value created by services and products within a defined segment of customers, communication and capacity with which value will be delivered, relationship types within the specific segments, cash generated in customer segments, assets that are critical to a successful business model, critical functions that must be carried out by the company to ensure a successful business model, network of partners and suppliers make the model work, and costs that are required for business model operations (Osterwalder & Pigneur, 2010).
Each block of the business model continues to “build” upon the previous block to create a business model that will effectively and efficiently generate value. An effective model will not compromise the desired culture of the business; rather, they will complement one another (Osterwalder & Pigneur, 2010). All businesses are founded on customers; therefore, a profitable customer base is crucial to the survival of any company (Osterwalder & Pigneur, 2010). The business model must make the decision of which customer segments to ignore and which ones to serve; consequently, the business model is then designed to encompass the customer’s specific needs (Osterwalder & Pigneur, 2010). By identifying and focusing on specific customer segments, the customer’s needs are being satisfied, while value is being created for the company (Osterwalder & Pigneur, 2010).
A business model is a representation of the governance, structure and content of transactions, designed in such a way that value is created by exploiting business opportunities; therefore, they are frequently considered in a structural context (Mason & Mouzas, 2012). According to Mason and Mouzas (2012), a business model is flexible, and should be developed as such. Flexibility is necessary to meet the ever changing needs and demands of the modern customer; in turn, this will promote adaptability which will allow the business to cultivate innovation (Mason & Mouzas, 2012). Maintaining flexibility will allow innovative responses when customer demands fluctuate (Mason & Mouzas, 2012).
According to Baden-Fuller and Haefliger (2013), the business model can be defined as the...

Find Another Essay On Building Blocks to a Successful Business Model

Leaning Leadership and building a business.

3265 words - 13 pages mybusiness, I can adapt to change more easily. When evaluating the need for a computerizedsystem in my business, I need to forecast the future demands of my products. After all tosurvive in the business world one must anticipate the future and not react to the past.Delighting CustomersThe key to any successful business is catering customers' needs. When someonereceives excellent product or service they are delighted with the experience. CarlSewell's

Good Negotiation Skills are essential to a successful business in the tourism industry

1447 words - 6 pages summarize the agreement as necessary and be clear about whether the deal is reversible.However, negotiators must keep the promise as it is the exchange of the agreement although it is sometimes only verbal agreement but it is about trust in business. If the negotiator has a good manageable preparation or plan that will be the key to gaining a strategic advantage in a distributive negotiation. Also, negotiators should be well in taking an advantage from

Malcolm Baldrige Awards Analysis & Recommendations of a Successful Quality Model

1800 words - 7 pages What sets a successful company apart from everyone in the industry? Is it the way of thinking within a company that promotes the quest for continuous improvement or the value a company puts on their customers’ satisfaction with the company’s product or service? There are many qualities that make a company successful. Two examples of how successful companies demonstrate what it means to be a successful is by who they are, as well as how they

Napster, From Freeware To Business Model

2725 words - 11 pages towards the situation. Napster used to argue that all file swapping operates a non-commercial basis. This is the problem and has been appointed by new CEO of the company Hank Barry, who has recently signed a deal with Bertelsmann to help introduce to the world something he envisioned. "The Napster Network". A new business model for Napster. Napster's Business Era: Now, The Present, A New Beginning         In May of 2000, Napster added $15

Keys to a Successful Organization

1524 words - 6 pages In today's rapidly growing market, there are two key components to any successful organization. These two components are strong leadership and effective management. When it comes right down to the more important of the two, leadership leads the way in being the key to a successful business. There are many skills and characteristic traits needed to be a strong leader in the workplace, and many people get confused about the two. Also, one

Smartphone Industry: A Firm's Business Model

2350 words - 9 pages Introduction Our client, XYZ, has designed a radically innovative smartphone yet its current business model is ill suited for its commercialisation. A firm's Business Model (BM) is the articulation of the processes through which resources are leveraged to create and deliver value to stakeholders allowing the firm to generate a profit (Chesbrough,i2010). XYZ must therefore undergo a fundamental overhaul of its BM to successfully bring to market

Building a spacecraft to travel to Mars

1142 words - 5 pages Spacecraft DesignOur task that we have been set is to create a space shuttle and create a mission to Mars. The space shuttle will need to store necessary equipment for the astronauts such as water, food and oxygen and must include an artificial gravity bedroom to prevent the astronauts muscle development and health. Many successful missions of the Space Shuttle Atlantis and Endeavour, these sizes are efficient for the use of this Shuttle design

Kaizen: Building a Business Plan of Continuous Improvement

980 words - 4 pages successful ventures is Kaizen.Based on the principle of continuous improvement and three simple building blocks, a company can great reap the benefits of its usage. The plan succeeds through company-wide involvement, open communication, and a culture of wanting to improve both self, and the company.References:Cane, Sheila. Kaizen Strategies for Winning Through People. London, England: Pitman, 1996."Kaizen (continuous improvement) for small- and

Motivation and its centrality to successful business practice

3147 words - 13 pages Motivation and its centrality to successful business practice Motivation Motivation is a key factor when managing any business. Motivation is important for a high productivity level. Productivity measures the relationship between the inputs into the business and the resulting output: There are several ways of measuring productivity: * Output per worker * Output per hour / day / week * Output per machine (if the business

Running a Successful Business Takes More Than Just Good Luck

676 words - 3 pages . Running a business sometimes also needs good luck. For instance, some business investors earn a huge amount of money only by occasionally purchasing a good stock. However, to build a successful business takes more than just good luck; people still need to have perseverance, to accept help and advice, and to build employees' self-esteem.First of all, the most valuable characteristic is perseverance to succeed in one's business. Perseverance is the

How to become a successful Manager

1606 words - 6 pages impressive satisfaction when top performance is achieved. In order to achieve this task, the managers' mission is to provide staff with a role model for professionalism, teamwork, compliance, motivation, and attendance. To succeed and be effective, managers must understand their role possess the skill needed to confront daily challenges head-on, and above all, know how to nurture and coach employees. This report will explain details and guidelines

Similar Essays

The Building Blocks Of A Tragic Hero

1081 words - 4 pages though she is innocent. Othello ignores the love he has for his wife and easily accepts Iago’s ideas. Consequently, Othello’s own mistakes and flaws lead him to homicide at the end of the play. Othello’s misguided trust in Iago leads to Othello’ s downfall. The precious handkerchief that belonged to Othello’s mother, then wife, creates the building blocks for his tragedy. Othello tells Desdemona to leave the handkerchief alone, even though it was

The Key To A Successful Business: Customer Relationship Management

1776 words - 7 pages The Key To A Successful Business: Customer Relationship Management In today’s business world it’s a dog eat dog race to the finish; everyone is highly motivated and constantly looking for the next best thing to out do the competitor with. However, many company’s and corporations fail to recognize the true value in their customers or end users. For, if a company would just take a look and the potential in profit and growth that lies right

Key Concepts To Successful Business Essay

1410 words - 6 pages It was a challenging task to write about only three concepts that I learned in this informative class. The concepts that stood out to me were Learning Style Inventory, preparation and delivery. I believe these concepts are critical aspects to a person’s success in the business world. One of the concepts that I found to be very interesting was “The Learning Style Inventory.” “The Learning Style Inventory (LSI) describes the ways you learn and

What Is A Business Model? Essay

1126 words - 5 pages the nine basic building blocks that are used to show the logic through which the companies intend to make money. These nine blocks cover the four fundamental factors of business; financial viability, customers, infrastructure and offer. Just like a blueprint, the business model serves the purpose of creating a strategy which can be implemented through the organization structure, system and process. As cited in Harvard Business Review on Business