Business models Flashcards
(25 cards)
A business model is a financial model of business
False, its about the concept, how you capture the value of the good you provide
What is the cycle of business model development
First select potential features and technologies, then determin their benefit to customers, afterwords identify the market segment to be targeted, confirm available revenue streams and design mechanisms to capture value.
There is an established theoretical grounding for business odels in economic and business studies
No, traditionally it has been simpel, you make something people want and they pay for it but with the internet things have become much more difficult as consumers expect things to be free.
A new business model may constitute as innovation
Yes
Business models most often need to be constructed when…
new tech is invented or when regulation or market demand trends make the old model obsolite.
What is the business model of traditional industry
Gain cost leadership through central production, standardization and a well developed distribution network either developed by yourself or in partnership with other firms. Middlemen are cut out as much as possible
What is the razor razor business model
Sell your main products verry cheaply and make your money thorugh maintenence serveices and features. Examples are razors where the money lies in the changes of razor blades or jet engines which are sold cheaply but firms like royse royse earn money through maintenence. Once the consumer has your platform they get high switching costs
What is the business model for sports ware
Sponsor clubs to gain brand recognition and then put that brand on everything and charge premium for it
Name some online business models
Ad revenue and freemium (free but optional payed premium services)
Converting freeloaders to paying customers rarely works
True, conversion rates are uaually poor
An innovative business model can lead to sustained competative advantage
False, it often just a matter of months before it is copied
Why could the incumbents not copy Dells business model
Becouse of their previous entanglements. Doing so would upset their previous partners
Why could incumbents not copy Wallmarts business model
By putting large stores in small towns they fufilled demand to such a dagree that it was no longer woth it for other firms to enter the local market
Business models can be patented
Generally no
Describe the strategic analysis filter for implementing a sunccessful business model
Segment the market => create value propositions for good segments => Design mechanisms to capture value from the segments => figure out mechanisms to block competitors from copying your ways
What is required for a pure lisencing business model to work
Strong ip rights, otherwise it will just be copied and the lisencers will capture all value among the sea of offers
Captureing value from scientific discovery is hard and costly
True, taht is why most basic scientific research is sponsored by government rather than businesses
inventions are usually monetized by imbedding them in products
True, they are rarely sold as lisences to Ip
Good business models are ralrely apparent early on so its the entrupenurs that can learn and adjust that are likely to succeed
True
What are some red flags when it comes to investing in new businesse opertunities
Those that are no more then good ideas, those that rely on capturing a small part of large markets and those that are too gimicky and will only be useful to a small number of customers
What questions are important to ask about customers before implementing a business model
How will they use the good, what are they willing to pay for it, how it the good a solution to their problems and how can it be preseinted as such and not just a gizmo
What questions are important to ask about the market before implementing a business model
How large is the target segment, do competing offers exhist, where is the industry in its evolution, do dominent designs exhist
What questions are important to ask about the product before implementing a business model
What are the costs of delivering value to the customer and are they volume sensitive, if so why.
What questions are important to ask about imitability before implementing a business model
What are the value propositions of the customer suppliers, what appropriation mechanisms are there and how can imitators be held at bay
