Business model

1he essence of a buslness model ls LhaL lL deflnes Lhe manner by whlch Lhe buslness enLerprlse dellvers
value Lo cusLomers enLlces cusLomers Lo pay for value and converLs Lhose paymenLs Lo proflL lL Lhus
reflecLs managemenL's hypoLhesls abouL whaL cusLomers wanL how Lhey wanL lL and how an
enLerprlse can organlze Lo besL meeL Lhose needs geL pald for dolng so and make a proflL



lormal descrlpLlons of Lhe buslness become Lhe bulldlng blocks for lLs acLlvlLles Many dlfferenL buslness
concepLuallzaLlons exlsL CsLerwalders work and Lhesls (2010
1
2004
3
) propose a sloqle tefeteoce
moJel based on Lhe slmllarlLles of a wlde range of buslness model concepLuallzaLlons WlLh hls bosloess
moJel Jeslqo templote an enLerprlse can easlly descrlbe Lhelr buslness model
oftosttoctote
ey AcLlvlLles 1he acLlvlLles necessary Lo execuLe a companys buslness model
ey 8esources 1he resources LhaL are necessary Lo creaLe value for Lhe cusLomer
9arLner neLwork 1he buslness alllances whlch complemenL oLher aspecLs of Lhe
buslness model
ffetloq
Ialue 9roposlLlon 1he producLs and servlces a buslness offers CuoLlng CsLerwalder
(2004) a value proposlLlon ls an overall vlew of producLs and servlces LhaL LogeLher
represenL value for a speclflc cusLomer segmenL lL descrlbes Lhe way a flrm
dlfferenLlaLes lLself from lLs compeLlLors and ls Lhe reason why cusLomers buy from a
cerLaln flrm and noL from anoLher
ostomets
usLomer SegmenLs 1he LargeL audlence for a buslness producLs and servlces
hannels 1he means by whlch a company dellvers producLs and servlces Lo cusLomers
1hls lncludes Lhe companys markeLlng and dlsLrlbuLlon sLraLegy
usLomer 8elaLlonshlp 1he llnks a company esLabllshes beLween lLself and lLs dlfferenL
cusLomer segmenLs 1he process of managlng cusLomer relaLlonshlps ls referred Lo
as cusLomer relaLlonshlp managemenL
loooces
osL SLrucLure 1he moneLary consequences of Lhe means employed ln Lhe buslness
model A companys uC
8evenue SLreams 1he way a company makes money Lhrough a varleLy of revenue flows
A companys lncome











orporaLe sLraLegy ls Lhe hlghesL of Lhese levels ln Lhe sense LhaL lL ls Lhe broadesL applylng Lo all
parLs of Lhe flrm whlle also lncorporaLlng Lhe longesL Llme horlzon lL glves dlrecLlon Lo corporaLe
values corporaLe culLure corporaLe goals and corporaLe mlsslons under Lhls broad corporaLe sLraLegy
Lhere are Lyplcally buslnesslevel compeLlLlve sLraLegles and funcLlonal unlL sLraLegles
Corporate strategy refers Lo Lhe overarchlng sLraLegy of Lhe dlverslfled flrm Such a corporaLe sLraLegy
answers Lhe quesLlons of whlch buslnesses should we be ln? and how does belng ln Lhese buslnesses
creaLe synergy and/or add Lo Lhe compeLlLlve advanLage of Lhe corporaLlon as a whole?
s|ness strategy refers Lo Lhe aggregaLed sLraLegles of slngle buslness flrm or a sLraLeglc buslness unlL
(S8u) ln a dlverslfled corporaLlon A flrm musL formulaLe a buslness sLraLegy LhaL lncorporaLes elLher
cosL leadershlp dlfferenLlaLlon or focus Lo achleve a susLalnable compeLlLlve advanLage and longLerm
success A strateg|c bs|ness n|t ls a semlauLonomous unlL LhaL ls usually responslble for lLs own
budgeLlng new producL declslons hlrlng declslons and prlce seLLlng An S8u ls LreaLed as an lnLernal
proflL cenLre by corporaLe headquarLers
operat|ona| strategy lL ls very narrow ln focus and deals wlLh dayLoday operaLlonal acLlvlLles such as
schedullng crlLerla lL musL operaLe wlLhln a budgeL buL ls noL aL llberLy Lo ad[usL or creaLe LhaL budgeL
CperaLlonal level sLraLegles are lnformed by buslness level sLraLegles whlch ln Lurn are lnformed by
corporaLe level sLraLegles
Inct|ona| strateg|es lnclude markeLlng sLraLegles new producL developmenL sLraLegles human
resource sLraLegles flnanclal sLraLegles legal sLraLegles supplychaln sLraLegles and lnformaLlon
Lechnology managemenL sLraLegles 1he emphasls ls on shorL and medlum Lerm plans and ls llmlLed Lo
Lhe domaln of each deparLmenL's funcLlonal responslblllLy Lach funcLlonal deparLmenL aLLempLs Lo do
lLs parL ln meeLlng overall corporaLe ob[ecLlves and hence Lo some exLenL Lhelr sLraLegles are derlved
from broader corporaLe sLraLegles
Cne of Lhe mosL valuable concepLs ln Lhe sLraLeglc managemenL of mulLldlvlslonal companles
was portfo||o theory Lach of a company's operaLlng dlvlslons were seen as an elemenL ln Lhe corporaLe
porLfollo Lach operaLlng dlvlslon (also called sLraLeglc buslness unlLs) was LreaLed as a seml
lndependenL proflL cenLer wlLh lLs own revenues cosLs ob[ecLlves and sLraLegles Several Lechnlques
were developed Lo analyze Lhe relaLlonshlps beLween elemenLs ln a porLfollo
Modern portfo||o theory (M1) ls a Lheory of lnvesLmenL whlch aLLempLs Lo maxlmlze porLfollo
expecLed reLurn for a glven amounL of porLfollo rlsk or equlvalenLly mlnlmlze rlsk for a glven level of
expecLed reLurn by carefully chooslng Lhe proporLlons of varlous asseLs
MC Lasks are followlng up pro[ecL unLll compleLlon and reporLlng Lo Lhe Lop managemenL ln a
sLraLeglc purpose A 9MC can be one of Lhree Lypes from an organlzaLlonal exposure perspecLlve
1 LnLerprlse 9MC
2 CrganlzaLlonal (ueparLmenLal) 9MC
3 Speclalpurpose 9MC
MC Setp
9MC SeLup ls made easy wlLh 9rocesses Cn uemand an P1ML based offerlng LhaL provldes easy Lo seL
up use and malnLaln 9MC conLenL asseLs such as pollcles and dashboards pro[ecL managemenL
processes and LemplaLes and lnLegraLlon Lo and use of 99M appllcaLlons and collaboraLlon plaLforms
such as MlcrosofL 9ro[ecL Server and Share9olnL (or equlvalenLs)
Large Cstomer ase
9MC SeLup wlLh 9rocesses Cn uemand has been Lhe cholce for over 1000 organlzaLlons lncludlng boLh
dedlcaLed 9MCs as well as vlrLual 9MCs helplng Lo ensure rapld adopLlon and conslsLenL execuLlon of
9MC processes and besL pracLlces 1heres no fasLer more cosL effecLlve or hlgher quallLy approach for
9MC SeLup Lo deploy use and malnLaln processes for organlzaLlonal pro[ecL managemenL
rocesses
9MC seLup requlres effecLlve and sLreamllned processes quallLy conLenL and appllcaLlon lnLegraLlon
9rocesses Cn uemand provldes 9MCs wlLh a Lurnkey approach for Lhe managemenL of 9MC conLenL
asseLs 9rovlded are compleLe pro[ecL managemenL processes pollcles and dashboards and feaLures for
lnLegraLlon and ongolng admlnlsLraLlon
keep|ng |t s|mp|e
Some pro[ecL managemenL vendors and consulLlng flrms wlll have you belleve LhaL Lhe 9MCs LhaL do
noL Lake rooL or fall alLogeLher do so because of reduced funds lack of necessary resources or even
lnLernal company pollLlcs Whlle Lhls vlew may serve vendors and consulLanLs well our cusLomers Lell us
and we belleve LhaL many organlzaLlons seLLlng up 9MCs spend Loo much Llme and money on
lmplemenLlng expenslve and complex appllcaLlons reorganlzaLlon sLraLegles and efforLs Lo 9M9 cerLlfy
Lhe enLlre sLaff wheLher needed or noL raLher Lhan on flrsL seLLlng up a useful and usable pro[ecL
managemenL process
Iast res|ts
9rocesses Cn uemand brlngs lmmedlaLe pro[ecL managemenL capablllLles Lo your organlzaLlon creaLlng
lasLlng producLlvlLy galns and longLerm buslness value lL ls an lnLraneL/LAn ready P1ML based sofLware
soluLlon LhaL enables 9MCs and vlrLual 9MCs Lo rapldly seL up use and conLlnuously lmprove upon
Lhelr core processes and besL pracLlces
Sca|ab|||ty
9rocesses Cn uemand ls scalable and allows you Lo choose Lhe organlzaLlonal model besL for you as well
as Lo change LhaL organlzaLlonal model Lo besL meeL your buslness needs 9rocesses Cn uemand can be
lmplemenLed as (1) parL of a pro[ecL conLrol offlce lnLernally or exLernally wlLh cusLomers (2) an l1
pro[ecL offlce (3) a buslness unlL program offlce or (4) across your enLlre enLerplse as a sLraLeglc pro[ecL
offlce
ntegrat|on
9rocesses Cn uemand lnLegraLes wlLh 99M appllcaLlons and collaboraLlon plaLforms such MlcrosofL
9ro[ecL Server and Share9olnL or equlvalenLs provldlng users wlLh a compleLe 9MC framwork and
seamless browserbased navlgaLlon beLween pro[ecL managemenL processes 99M Lools and
collaboraLlon and documenL managemenL plaLforms


Business strategy & Planning advisory:
O Concept/dea validation
O Market study / ndustry assessmentM
O Vision / Mission - Creating/Devising/Re Working
O Location advisory
O Business plan Creation / Validation
O nvestment docket preparation
O Feasibility study
O Growth strategies
O nvestment strategy
O Joint venture planning
O Strategic alliance
O Distribution alliance
O Competition assessment
O Exit strategy
rganizational (HR) advisory:
O Organization Structuring / restructuring
O Recruitment strategy
O Balanced scorecard sreation & KRA development
O Performance management & measurement system
O Employee satisfaction survey
O Career management system
O Fixed & variable compensation planning
O Long term incentives (e.g. ESOPs)
O HR policies and procedures development
lobal sourcing advisory:
O Business case development
O Location selection
O Operating model melection
O Process profiling / cost-benefit analysis
O Acculturation
O People strategy
overnment Advisory:
O Policy interventions - Policy formulation
O ndustry scan
O ndustry benchmarking / Best practices



Reasons why strategic plans fail
There are many reasons why strategic plans fail, especially:
Failure to execute by overcoming the four key organizational hurdles
Cognitive hurdle
Motivational hurdle
Resource hurdle
Political hurdle
Failure to understand the customer
Why do they buy
s there a real need for the product
inadequate or incorrect marketing research
nability to predict environmental reaction
What will competitors do
Fighting brands
Price wars
Will government intervene
Over-estimation of resource competence
Can the staff, equipment, and processes handle the new strategy
Failure to develop new employee and management skills
Failure to coordinate
Reporting and control relationships not adequate
Organizational structure not flexible enough
Failure to obtain senior management commitment
Failure to get management involved right from the start
Failure to obtain sufficient company resources to accomplish task
Failure to obtain employee commitment
New strategy not well explained to employees
No incentives given to workers to embrace the new strategy
Under-estimation of time requirements
No critical path analysis done
Failure to follow the plan
No follow through after initial planning
No tracking of progress against plan
No consequences for above
Failure to manage change
nadequate understanding of the internal resistance to change
Lack of vision on the relationships between processes, technology and organization
Poor communications
nsufficient information sharing among stakeholders
Exclusion of stakeholders and delegates