BM6101

Your
Session 11:
Future
Plan
Business Models
Session 10
Summary Blue Ocean Strategy
proposes ‘Blue Oceans’
over ‘Red Oceans’ as a
way to negate the
negatives associated
with generic strategies

Kim and
Mauborgne argue
Generic strategies that this is not the
suggest only two/ BOS provides tools that
three strategic case. allow strategists to
options… visualise current offerings
and identify ‘Blue Ocean’
spaces…but this is, in turn,
heavily critiqued!
 Semester 1 Structure

(4) Resources (5)Generating

(2) Corporate (3) Position and Capabilities; Strategic (6) Evaluating
(1)Understanding
Purpose; where do we sit what do we have Options; What and Selecting
Strategy
Vision and Goals and fit? and how can we options do we Strategies
use it? have?
So, we have chosen how to compete…
Business Models
What are they?
“A business model describes a value
proposition for customers and other
participants, an arrangement of
activities that produces this value, and
associated revenue and cost
structures” Source:
Johnson et al, 2016

“...<business models>..describe
business transactions and inter-
relationships between various parties
and are best described in terms of
three inter-related components…”
Business Model Components
 Value Creation

• What is offered?
• How is value created for:
• Customers
• Partners
• Other Participants
• Who is the targeted customer segment?
• How are their needs fulfilled/ problems solved?
 Value Configuration

• How do inter-dependent resources underpin the value

proposition?
• Where do they create value?
• How are they linked?
• Which participants perform them?
 Value Capture

• What is the cost structure?

• How is the revenue stream?
• Who shares in the value created?
• How is profit made?
Common models…
BMC
(Business Model Canvas)
Business Model Canvas Explained
Business Model Canvas
Value Proposition Canvas Explained
BMC
Starbucks
Summary
Business model
canvas is a tool that
helps us visualise the
current/ expected
model.

..instead, they
inform us how
Business models our model will Business canvas
are not the same look like a post-
as strategic
can also help us to
choice… choice. spot opportunities
and threats for
value creation.