Reinventing the Business Model

2.  What is business model?
 2 Essential Elements of Business Model
 When do you need to reinvent the business
model?
 How to re-invent the business model?
 Apple case
 Some more pointers
 Business Model Canvas - Extended

3. What is Business Model ?
A business model is the plan implemented by
a company to generate revenues and make a
profits from operations.
The model includes the components and
functions of the business, as well as
the revenues it generates and the expenses it
incurs.

4. 2 Essential Elements of Business Model
Value Proposition – What we offer to whom?
It represents explicit choices along the below
3 dimensions .
 Target Segment(s) - Which customers do we choose to
serve? Which of their needs do we seek to address?
 Product or Service Offering - What are we offering the
customers to satisfy their needs?
 Revenue Model - How are we compensated for our
offering?

5. 2 Essential Elements of Business Model
Operating Model – How do we profitably deliver
the offering? It represents explicit choices
along the below 3 dimensions.
 Value Chain - How are we configured to deliver on
customer demand? What do we do in-house? What do we
outsource?
 Cost Model - How do we configure our assets and costs to
deliver on our value proposition profitably?
 Organization - How do we deploy and develop our people to
sustain and enhance our competitive advantage?

6. When do you need to reinvent the business model?
 Innovation becomes BMI when two or more elements of a
business model are reinvented to deliver value in a new
way (Classic example is Apple).
 Business model innovation is especially valuable in times
of instability.
 Business model innovation helps in beating the intense
Competition.
 Innovations to improve processes and products, At times
they are expensive and time-consuming, requiring a
considerable investment in everything from R&D to
specialized resources, new assets and even entire new
business units.

7. When … continued..
 It can help address disruptions—such as regulatory or
technological shifts—that demand fundamentally new
competitive approaches.
 BMI can also help address downturn-specific
opportunities, enabling companies, for example, to lower
prices or reduce the risks and costs of ownership for
customers .

9. VUCA

10. How to re-invent the business model?

11. Apple – Before and After Business Model Reinvention

12. Apple – Before and After Business Model Reinvention

13. Some more pointers-

14. Business Model Canvas - Extended