Business Model Optimization

How much forethought went into your company’s business model? Perhaps it is time to take a second look to see if you have the right model for your unique business?

Over the past few years a number of game changing business models have evolved and taken market share away from those who stood by their old models. What models are your competitors using?

In the book Business Model Generation, by Alexander Osterwalder & Yves Pigneur they break down business models into nine key building blocks:

• Customer Segments
• Value Proposition
• Channels
• Customer Relationships
• Revenue Streams
• Key Resources
• Key Activities
• Key Partnerships
• Cost Structure

Take some time to really assess each of these building blocks that make up your business model to see if you are making the most out of each. If not then you may want to take a step back and look at the big picture prior to diving in to the one or two areas that seem lacking.

Many manufacturers started by an engineer or around a technology tend to be unbalanced with more emphasis on the technical side of the business (Key Resources) and less on the other important parts. We see this all the time and in these instances what is called a Sales Dept is often little more than a Customer Service Dept staffed with “order takers” instead of real sales people.

You may find on closer inspection a pattern that indicates other blocks need to be changed as well. Are each of these blocks aligned together in support of your value proposition? If not, is it because you are not really providing what you claim to be, or are you providing more and need to restate your value proposition.