Barringer E4 PPT 06
Chapter 6
Developing an
Effective Business
Model
Bruce R. Barringer
R. Duane Ireland
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-1
Chapter Objectives
1 of 2
1. Describe a business model.
2. Explain business model innovation.
3. Discuss the importance of having a clearly articulated business model.
4. Discuss the concept of the value chain.
5. Identify a business model’s two potential fatal flaws. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-2
Chapter Objectives
2 of 2
6. Identify a business model’s four major components.
7. Explain the meaning of the term business concept blind spot.
8. Define the term core competency and describe its importance. 9. Explain the concept of supply chain management.
10. Explain the concept of fulfillment and support.
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-3
What is a Business Model?
• Model
– A model is a plan or diagram that’s used to make or describe something.
• Business Model
– A firm’s business model is its plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
– The term “business model” is used to include all the activities that define how a firm competes in the marketplace. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-4
Dell’s Business Model
1 of 2
• Beyond Its Own Boundaries
– It’s important to understand that a firm’s business model takes it beyond its own boundaries.
– Almost all firms partner with others to make their business models work.
– In Dell’s case, it needs the cooperation of its suppliers, customers, and many others to make its business model work. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-5
Dell’s Business Model
2 of 2
Dell’s Approach to Selling PCs versus Traditional Manufacturers
Copyright ©2012 Pearson Education, Inc.
Developing an
Effective Business
Model
Bruce R. Barringer
R. Duane Ireland
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-1
Chapter Objectives
1 of 2
1. Describe a business model.
2. Explain business model innovation.
3. Discuss the importance of having a clearly articulated business model.
4. Discuss the concept of the value chain.
5. Identify a business model’s two potential fatal flaws. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-2
Chapter Objectives
2 of 2
6. Identify a business model’s four major components.
7. Explain the meaning of the term business concept blind spot.
8. Define the term core competency and describe its importance. 9. Explain the concept of supply chain management.
10. Explain the concept of fulfillment and support.
Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-3
What is a Business Model?
• Model
– A model is a plan or diagram that’s used to make or describe something.
• Business Model
– A firm’s business model is its plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
– The term “business model” is used to include all the activities that define how a firm competes in the marketplace. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-4
Dell’s Business Model
1 of 2
• Beyond Its Own Boundaries
– It’s important to understand that a firm’s business model takes it beyond its own boundaries.
– Almost all firms partner with others to make their business models work.
– In Dell’s case, it needs the cooperation of its suppliers, customers, and many others to make its business model work. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall
6-5
Dell’s Business Model
2 of 2
Dell’s Approach to Selling PCs versus Traditional Manufacturers
Copyright ©2012 Pearson Education, Inc.