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New business model and its components

August 5, 2009
New Business Model:

Traditional corporations are over structured, over controlled, and over managed, but underled. Today, top managers should rather concentrate of that handful of real managerial leadership tasks that will bring success in the future.

So, a new business model is emerging, a model where most of key missions of the organization are distributed to individual pieces and unity comes from the different people and the free flow of knowledge.

Components of Business Model:

The following diagram shows the various components of the business model. This will also perform an innovative innovation in the various components.

The below six components has been mostly decide to business model,

1. Value Proposition – a description of the customer problem, the solution that addresses the problem, and the value of this solution from the customer’s perspective.

2. Market Segment – the group to target, recognizing that different market segments have different needs. Sometimes the potential of an innovation is unlocked only when a different market segment is targeted.

3. Value Chain Structure – the firm’s position and activities in the value chain and how the firm will capture part of the value that it creates in the chain.

4. Revenue Generation and Margins – how revenue is generated (sales, leasing, subscription, support, etc.), the cost structure, and target profit margins.

5. Position in the Value Network – identification of competitors, complementors, and any network effects that can be utilized to deliver more value to the customer.

6.Competitive Strategy – how the company will attempt to develop a sustainable competitive advantage and use it to improve the enterprise’s competitive position in the market.

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