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Business Model Generation & Audit

Content:

- What is a Business Model?

- The Business Model Generation Process

- The Business Model Generation Canvas

- TBK Consult Business Model Services

When we are exposed to a new company or business activity one of the first questions we ask is: What is the business model?

The business model has become the de facto standard for explaining how a business delivers value to its’ stakeholders and profits to its’ owners.

A well-documented business model is especially important when we need to motive new employees, new investors, new partners or other new key players to support our business system. They all want to understand the big picture, assess the viability and the risk, and understand how they can benefit by participating.

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Business Model Generation

1 http://en.wikipedia.org/wiki/Business_model2 Business Model Generation, Osterwalder and & Yves Pigneur, 2010. ISBN 978-0470-87641-1

What is a Business Model?The term “Business Model” became a standard part of any business discussion from the beginning of this century. The Business Model is a blue print describing how a business operates and especially explains how it generates value for its’ stakeholders and a profit for its’ owners.

“In theory and practice the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, offerings, strategies, infrastructure, or-ganizational structures, trading practices, and operational processes and policies.

Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.” 1

TBK Consult is supporting clients with Business Model Generation and Audits based on the “Business Model Generation” approach developed by Alexander Osterwalder and & Yves Pigneur2.

The Business Model Generation approach is especially valuable in situations with multi-sided market constructions and in situations with high volume products and services.

Identify Customer Segments1.

Define Value Propositions2.

Define Value Chain Channels3.

Define Customer Relationships4.

Identify and quantify Revenue Streams5.

Identify Key Resources6.

List Key Activities7.

Identify Key Partnerships8.

Identify and quantify the Cost Structure9.

The Business Model Generation process

The process of generating, testing and documenting a business model has the following nine steps:

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Business Model Generation

TBK-MBFS-001

TBK Consult Business Model Services

The Business Model Generation Canvas3

TBK Consult provides the following services associated with business model generation and audits:

Osterwalder and Pigneur have developed the “Canvas”, which is a graphic representation of the generic business model elements. The Canvas supports the visualization of a business model. It is an extremely valuable tool in workshops, when “left” and “right” brained people are reviewing and discussing how business models should or could work.

Introduction to Business Model defi nitions, concepts, terms and processes

Business Model generation and audit facilitation

Business Model research and assessments (fi nding external data and assessing external feasibility of business model components)

Business Model documentation

3 The Business Model Generation canvas is available as an App for the iPad and can be downloaded as posters from www.tbkconsult.com