Alexander Osterwalder: Using Business Models to Beat the Competition

Author Alexander Osterwalder and serial entrepreneur Steve Blank discuss the importance blending a strong, clear story with the building blocks of the business model canvas to out perform competitors. Osterwalder also elaborates on the power of pattern recognition in developing new models.

Business Planning: Building an Effective Business Model

As the document that tells the company’s story, the Business Plan also helps shape and modify the entrepreneurial company’s Business Model, the elements of which will be driven by the answers to the following questions:

  • Who are we? (Team)
  • What are we trying to do? (Mission)
  • What problem do we solve? (Faster/Better/Easier/Cheaper)
  • How are we going to get it done? (Operations)
  • How do we reach our customers? (Sales/Marketing/Distribution Channel)
  • Who else is doing this? How do we obtain our initial customers? Which are the easiest to reach? What are the target customers’ decision-making processes? What relationships do they currently have in place that will need to be terminated for them to do business with us? (Competition/Competitive Analysis)
  • What market research have we done to be sure that anyone wants to buy this product or service at this price – or at all? (Substantiation)
  • Do we truly modify the way business is being done in our industry (as a change agent) or is this more of a fad or a trend? (Market Trends/First Mover Advantage (FMA))
  • Are these targeted customer relationships profitable? How do we make money? (Business Model)
  • What do we need to accomplish our goals? (Budget/Resources)
  • When are we profitable? (Breakeven/Timetable)

There are also Myths and reality about business models. To know more about this article, please visit the link below:

Business Planing: Building an effective business model

How Business Models Help Generate Business Plans

A business plan’s main role is to plan, outline and communicate a business (or not-for-profit) project and its implementation internally or externally. The motivation for the business plan may be to “sell” a project to potential investors or internally to top management and also serves as a planning document.

In fact, when you have designed and thought through your business model you have the perfect basis for writing a good business plan. Structure your business plan into five main sections: The team, the business model, financial analysis, external environment, implementation roadmap, and risk analysis.

For more information about the 5 main sections in this article, please visit the link below:

How Business Models Help Generate Business Plans

The Business Value Proposition

You can understand the value proposition as the answers to (and optimization of) these two questions:

Where does the money come from? What are the revenue streams? What customers are sought, and how much are they willing to pay?
Where does the money go? What is the cost structure? What does it cost to serve that customer?
This article will give you the example to help illustrate the helpfulness of the tools in generating strategic insight

Leading Strategic Initiatives

Value Propositions Strategic InitiativesLeaders of strategic initiatives need to have a working knowledge of the various perspectives on value propositions. Why? Because organizations often charter strategic initiatives to close the gap (or create advantage) on value propositions. To reinforce this point, PMI’s updated Standard for Program Management places more emphasis business value realization as a key rational for the use of program and project management techniques.

The term “value proposition” is a bit abstract, and borders on jargon. That probably explains why many managers  shy away from developing them.  As one research study explains,

“Value propositions can be intimidating because they strive to combine small size — often 10 words or less — with a lot of substance. After all, those 10 words are supposed to convey the unique qualities of your company and/or products and services.”

This article identifies two approaches for describing the value proposition, using elements of the Renew…

View original post 384 more words

How to Effectively Use the SWOT Framework

SWOT analysis is helpful if you want to change your business model. but sometimes people mix up the strengths & weaknesses with the opportunities & threats. This table will help you to differentiate both of them.

Thinking is Hard Work

I’ve just finished my stint as a preliminary round judge for the Venture London Business Competition, reading six new business plans.  Some of the plans featured great ideas, but were poorly written or did not do a great job of developing the business model.  But the biggest error most of the would-be entrepreneurs made was misusing the SWOT analytical framework.

Anyone who has taken a business course in the last twenty years has heard of SWOT (Strengths, Weaknesses, Opportunities and Threats). But because most people don’t use it correctly, most business profs HATE the framework.

There are two basic problems with SWOT. The first is that most people mix up the Strengths & Weaknesses (S/W) with the Opportunities & Threats (O/T). The second is that most people develop a SWOT and then move on without out drawing any conclusions or actions that should happen as a result of the SWOT.

View original post 317 more words

Strategy vs Tactics: The elements of strategy

Before continuing about Business Plans and Model, we need to know about strategy.
This article told us that in strategy, we need to know about Arena, Differentiation, Vehicles, and Staging.

What is the difference between a strategy and a business model?

A strategy is about the external logic of a business (ex: How are we going to compete?).  A business model is about the internal logic of the business (ex: Does it make operational and economic sense?  Do all of the pieces fit together?).

A business model is a tool that complements both a business strategy and a business plan. Why? because:

  1. It is an important tool because it ensures that you understand the logic of your business; and,
  2. it helps you communicate the logic of your business.

Thinking is Hard Work

From the volume of searches on Strategy vs. Tactics, it appears that there is a lot of demand for more about strategy. So I’m going to provide you with a brief description of strategy, based on an article sent to my by the Skinny Professor. (Reference: Hambrick & Fredrickson, “Are You Sure You have a Strategy?”, Academy of Management Executive, 2001).

Strategy is about positioning yourself relative to the competition.  Hambrick & Fredrickson have broken strategy down into four types of strategy decisions: Arena, Differentiation, Vehicles and Staging.

  1. Arena.  Where will we compete? What products, markets, geographies and core technologies will we use to compete?
  2. Differentiation. How will we be different from our competition?  What image, price, styling and level of customization will we provide?
  3. Vehicles. How will we achieve our strategy? Will we use internal growth, joint ventures, licencing or acquisitions?
  4. Staging. How will…

View original post 68 more words