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Business Model PDF
Business Model PDF
Position Paper for the International Workshop on Business Models, Lausanne, Switzerland,
4-5 October 2002
Alexander Osterwalder & Yves Pigneur
alexander.osterwalder@hec.unil.ch
yves.pigneur@hec.unil.ch
2.2.2 Channels
CHANNELS (CH) refer to the way a firm goes to market and how it actually reaches
its customers (Hamel, 2000). ICT has had an important impact on channels by increasing
the range of them and making new ways of reaching the customer possible. The process of
eliminating middlemen (disintermediation)(Benjamin and Wigand, 1995), shortening
channels (direct selling), introducing new mediation (cybermediaries)(Sarkar et al., 1995)
or cross-channel selling have made channel management increasingly complex and
indispensable. The expansion of the range of channels has also multiplied the potential
conflicts between channels (Anderson et al., 1998). A channel can be decomposed in its
elements that we call LINK (LI). Each one of these Links has a Description and the
attributes Reasoning and Customer Buying Cycle.
Figure: (Distribution) Channel
Description: This attribute simply describes the function and nature of the Link.
Reasoning: This attribute captures the reasoning on why the firm thinks this part of the
channel is necessary to get in touch with the customer.
Life Cycle: This attribute captures to which one of the four stages of the customer buying
cycle the L belongs to. This can be the awareness phase (e.g. getting the customers
attention through advertising), the evaluation phase where the customer compares his
needs to the company's offer (e.g. limited software trial), the purchase (e.g. online or
offline transaction) or the after-sales phase (e.g. troubleshooting and maintenance).
3 CONCLUSION
The generic BM framework provided in this paper allows a company to seize the logic of
its business. It can capture the different elements of its BM in a more formal way. By
doing this it will better understand its business, will be able to share this understanding
among stakeholders, can easily observe its BM over time, can better define a range of
indicators to follow and can create a portfolio of scenario BMs it might want to pursue in
the future.
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