Business Models and Education
- Solution Shops - Employ experienced
intuitively trained experts whose job is to diagnose problems
and recommend solutions. High-end consulting, law, advertising
firms, R&D organizations, and specialist physicians'
diagnostic activities in hospitals are examples. The firms
abilities to deliver value to customers are dependent on the
people who work there; standardized processes are uncommon in
solution shops.
- Value Chains - Manufacturing,
retailing, and food service companies are examples. These
companies bring inputs of materials into one end of their
premises, transform them by adding value, and deliver
higher-value products to their customers at the other end. The
ability to deliver value is embedded in strong, standardized
processes.
- Facilitated User Networks -
Telecommunications, Insurance, and Banking are facilitated user
networks. Participation in the network typically isn't the
primary profit engine for participants. Rather, the network is
a supporting infrastructure that helps the buyers and sellers
make money elsewhere. The company that makes money in a user
network is the one that facilitates the network.
Business model innovation A business model describes how an
organization creates, delivers, and captures value. Most
business model definitions highlight four key elements:
Customer value proposition, which explains how an organization
will address a customer need Value chain, which organizes
processes, partners, and resources to deliver the value
proposition Profit formula, which lays out how an organization
will make money Competitive strategy, which describes how an
organization will compete with rivals and defend its position
in the value network.