If ever there were a contest for the greatest management buzzwords in recent years, the concept of business model would come somewhere near the top. However, few of those who use the term are comfortable when they try to give a concrete expression to the different notions and dimensions it covers. This is a shame, because a good business model is essential for any company wishing to expand, whether it is starting up or already well established. Dr. Philippe CHEREAU, SKEMA Ventures Director, clarifies the concept and the relationships between strategy and business model.
The business model canvas is commonly accepted as an appropriate tool to design the components of a company’s business model. Indeed, it allows entrepreneurs to answer the following questions: Who are the company’s clients? What problems do these clients have that the company wants to solve? What solutions to the problems can the company offer that clients will value? How can we organize the company’s activities to develop and deliver this offer? Will this offer and the underlying cost structure and revenue model generate lasting profit? Watch the video below to learn about the different components of the canvas.
The efficiency of a business model depends not only on the consistency of the business model components but also on the alignment between the business model as a whole and the company’s strategy. Dr. CHEREAU illustrates this dual level of fit.
Should entrepreneurs invent a new business model or improve existing models? Watch the video below to get an answer to these questions.