Business Model Generation – Part2 – Canvas
“Pattern in architecture is the idea of capturing architectural design ideas as archetypal and reusable descriptions” Christopher Alexander
This section in the book describes business models with similar characteristics, arrangements of business model Building Blocks, or behaviors. The patterns described should help us understand business model dynamics and serve as a source of inspiration for our own work with business models.
The goal in defining and describing these business model patterns is to recast well-known business concepts in a standardized format – the Business Model Canvas – so that they are immediately useful in our own work around business model design and invention.
Which patterns are described in the book? Unbundling Business models, The Long Tail Business Models, Multi-Sided Platforms, Free as a Business Model and Open Business Models.
I just picked two of the described patterns to give a clue about the content of this chapter.
Unbundling Business Models
The concept of the “unbundled” corporation holds that there are three fundamentally different types of businesses:
- Customer Relationship businesses (Finding and acquiring customers and relationships)
- Product innovation businesses (develop new and attractive products and services)
- Infrastructure businesses (build and manage platforms for high volume, repetitive tasks, …)
Each type has different economic, competitive, and cultural imperatives. The three types may co-exist within a single corporation, but ideally they are “unbundled” into separate entities in order to avoid conflicts or undesirable trade-offs. The authors recommend focusing on one of the three internally.
The authors give great example for unbundling within the bank and telecommunication industry.
Mobile telecommunication firms have started unbundling their businesses. Traditionally they competed on network quality, but now they are striking network sharing deals with competitors or outsourcing network operations altogether to equipment manufacturers. Why? Because they realize that their key asset is no longer the network – it is their brand and their customer relationships.
We can use our self-made canvas to take a look at our business model. How can we unbundle and improve our existing or invented business model? All the actions and all the example in the book come back to its beginning – the canvas.
… bring together two or more distinct but interdependent groups of customers. Such platforms are of value to one group of customers only if the other groups of customers are also present. It creates value by facilitating interactions between the different groups. A multi-sided platform grows in value to the extent that it attracts more users, a phenomenon known as the network effect. Credit cards for example link merchants with cardholders and newspapers link readers with advertisers.
For further information about the other patterns just send me a message. The next article is about Design.
The Business Model Generation