Business Model and Value Creation

Business Model

A business model describes how an organization creates, delivers, and captures value. It explains what the organization offers, who it serves, how it reaches customers, what resources and activities are required, and how it generates revenue while managing costs. A business model connects strategy with business operations and provides the foundation for designing products, services, and capabilities.

Software-house example:
A software company provides digital-transformation solutions to government organizations through consulting, custom software development, managed services, and reusable technology platforms. Revenue comes from projects, subscriptions, licensing, and support contracts.

• Healthcare organizations

• Transportation organizations

It can then further segment government customers by needs, such as:

• Digital-government transformation

• Legacy modernization

• AI adoption

• Cybersecurity

• Data and analytics

• Cloud transformation

Important distinction: A customer segment describes who the organization serves; a persona describes a representative individual within that segment.

Business Model Canvas

The business model canvas is a strategic tool that models in high-level way the organization's business.

business model canvas contains the key 9 pillars for kicking of your business:

• Customers Segments: You are targeting, which you should have a persona for each to identify the values and characteristics for each to provide the proper solution

  • Example: Students, teachers, parents

    • Male/Female behavior

    • Different learning style

• Value proposition: What makes you different

  • • Price

    • Content

    • Availability zone

    • Fast response

    • After sales

    • Mobility

• Distribution Channel: How will you distribute your product

  • • Online access

    • Application downloads

• Relationship: How the business interacts with them

  • • Ads on social media

    • Direct access using data

    • On-ground marketing

• Revenue: Expected revenues 

• Key resources: Who will develop/produce/Operate/Support

• Key activities: This will help to identify required resources, and it includes also the supportive functions that should support the key value chain activities

• Partners: Who will help me to kick-off

• Cost: expected cost according to its type