A business modelling framework provides an essential toolbox for strategic planning, decision-making, innovation and development.
It’s a simple document that sets out a comprehensive and logical step-by-step approach to creating a workable business model that will provide the foundations for success. Once you have a framework you can perceive viability much more easily and discuss plans with more clarity.
The nine building blocks: a brief overview
- Always start with the customer: Who are they? What do they need? Are you targeting one mass market with the same needs or a segmented market with different expectations?
- Value proposition: These are the products and services that will meet your customers’ needs and ensure they choose you over the competition. You need to know your customers’ ‘pain’ and what they want to gain.
- Channels: How are your products and services delivered? This involves ensuring supply, distribution and marketing work seamlessly.
- Customer relationships: How will you interact with and manage your customers? What will work best for your particular organisation? Can you do better than the competition?
- Revenue streams: Cash flow is king. How will you generate the funds you need to deliver your products and services and ensure long-term stability and growth? Sales? Leasing? Subscriptions? Usage fees? Licensing?
- Key resources: This is a key infrastructure building block and covers a wide range of requirements from buildings and machinery to human resources, intellectual property rights and finance.
- Key activities: These are the most important activities and processes you need to have in place to ensure your organisation can deliver its value proposition efficiently and effectively.
- Key partners: Carefully selecting and managing your network of key partners such as suppliers, distributors and joint-venture partners can give you a competitive edge.
- Cost structure: The costs involved in delivering your value propositions. These will be cost-driven to minimise costs and/or value-driven, for example, when operating in a luxury marketplace or to provide the right quality.
Find out more about the business modelling framework in our Level 5 course Driving Organisational Focus and Efficiency. This course is aimed at middle and senior managers who want to reflect on how their management and leadership style creates a culture and how that culture affects the performance of their organisation or department.