The purpose of BMIMatters blog is to educate people on the concept of business models. Business Model is among the most loosely used term in the management conversations. There exists very little concrete understanding of what a business model is. Managers often refer to the revenue model or the operating model as business model. However, business model is much more than that.
Here are 5 reasons for why a good understanding of business models is important for businesses:
- While Physical Models can help understand complex architectures and buildings, Business Models can help quickly understand complex Business systems.
- Business models can help achieve a shared understanding of the business and have all the minds think in the same direction.
- Innovation is necessary for Survival in today’s hypercompetitive business environment. Focusing Innovation efforts on Business Models provides superior returns.
- The discipline of Business Models can provide Innovation Tools and Techniques required for Innovating and Transforming your Business Models.
- Business Models can help in learning the Innovation Best Practices from companies in the different industries.
Every business is built with a vision. The vision helps in defining goals and objectives for the business. To achieve the business goals, business leaders develop a strategy. From the strategy emerges a plan of action to take the business from Point A to Point B. Understanding of the business models is central to the formulation of business strategy.
Managers should learn to speak the language of business models and build its vocabulary. Just as any professional discipline has a vocabulary that its professionals are well accustomed with, all business owners and managers should get accustomed with the business models vocabulary. It is a prerequisite to business strategy formulation or business model innovation.
Using the content from the blog
The BMIMatters blog is written for educational purposes. The content and analysis on this blog can be freely used. There are no license restrictions. However, the content creatorship or content ownership should not be falsely claimed. In case you want to inform us when using the content, please write to email@example.com.
Business Model Canvas developed by Alexander Osterwalder (http://www.businessmodelalchemist.com/) is used in the BMIMatters blog posts to represent business models of different companies. The Business Model Canvas is distributed under Creative Commons (CC) license. For this reason, the link (http://www.businessmodelgeneration.com/) is mentioned below every Canvas.
Color-coding used in the business model representations
In some business model representations over the Canvas, we have used different colors in some building blocks. This is to associate different value propositions to different customer segments, relationships, channels, and revenue streams. This kind of color-coding is used primarily in case of Multi-sided Platform business model patterns.