BUSINESS MODEL

PATTERNS
Presented by:
Muzammil Ahmed
Muhammad Faizan
Syed Farrukh Ali
Muhammad Junaid
BUSINESS MODEL PATTERNS
 What is pattern?

 Discernible design regularity

Example: forecasting future demand

 What is pattern in business model?

 Reusable business model architectural components

 Similar in characteristics, arrangement and behaviors
 Helps in business model generation
Single corporation may have combination of business model patterns
UNBUNDLING BUSINESS MODEL
 Michael Porter in his book “Competitive Strategy: Techniques for Analyzing
Industries and Competitors”, 1980
 Differentiation
 Segmentation
 Cost leadership
 Treacy and Wiersema in their book, “The Discipline of Market Leaders”, 1993
 Product Leadership
 Customer intimacy
 Operational excellence
 UNBUNDLING BUSINESS MODEL
 j
LONG TAIL BUSINESS PATTERN

“Its About Selling Less of More”

 Focus on large number of niche products.

 Aggregate sale of niche items can be as

lucrative.

 These models require strong platforms.

LONG TAIL BUSINESS PATTERN CONCEPT
Its concept is coined by Chris Anderson in which he discussed about the shift in
media business.
“Selling small of numbers of Hit items in Large volume”
to
“Selling a very large number of niche items in smaller volume”

 He believes there are three economic triggers

that give rise to the media industry:
 Democratization of tools of production
 Democratization of distribution
 Falling search costs to connect supply with demand
THE PARETO PRINCIPLE (POWER LAW) vs LONG TAIL

 The Pareto principle says:

“Ignore the long tail and just focus on the head”

WHY?????

Prior to the internet production, distribution, and consumption focused on a few hits
because of scarcity of resources. As there simply wasn’t enough time , space, or
money for businesses to offer everything to everybody.

“That was the world of scarcity”

Now with online distribution and retail

and the differences are profound

THE TRANSFORMATION OF THE BOOK PUBLISHING
INDUSTRY

 OLD MODEL:
 Work only with known authors.
 Print and publish well known best sellers with high estimated demand.

 NEW MODEL:
 Anyone can publish
 Printing is done after the book order
(LULU.COM)
SOME RULES OF SUCESSFUL LONG TAIL AGGREGATORS

 Move Inventory way in or way out

Today the online site of Liberty Books, and many others are using their existing
warehouse network to offer far more variety of books online that they do in their stores
Book-Shelf.

 One Distribution method doesn’t fit all

If you focus on distributing to just one customer group or territory , you risk losing
others.
SOME RULES OF SUCESSFUL LONG TAIL AGGREGATORS

 One product doesn’t fit all

One size fits one, many sizes fits many.
SOME RULES OF SUCESSFUL LONG TAIL AGGREGATORS

 One Price doesn’t fit all

In abundant markets, variable pricing can be a powerful technique to maximize the value
of the product and the size of the market.

 Share information
Information about buying patterns when transformed into recommendation, can be a
powerful marketing tool.