“Every successful company already operates according to an effective business mo
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Question
“Every successful company already operates according to an effective business model. By systematically identifying all of its constituent parts, executives can understand how the model fulfills a potent value proposition in a profitable way using certain key resources and key processes”.
Review the elements of a successful business above, and considering the company in which your work (or one you are familiar), can you determine what your company would need to do to create a different customer value proposition (CVP) if need be?
Explanation / Answer
Elements of a successful business model:
The following are the elements of a successful business model:
When creating a business model, it is always better to choose a small target audience as wide audience may not provide a positive result. Selecting a small group of customers helps in identifying their demographics, common challenges & the solutions that the business will offer.
Before starting the business on live basis, it is necessary for the company to make sure of the activities that is required to make the model to work. Key activities o a business can be identified by first identifying the company’s important aspect of offering. Whether it is consulting, shipping or delivery of products etc.
What is the company’s requirement to carry on its everyday activities? It is essential to document the important business resources to meet the customer’s needs & also sustain the business needs. Some of the important resources are capital, website, list of customers, intellectual property etc.
How does the company stand among its competitors? Does it provide an innovative service, revolutionary product or service or in what ways the company’s product or service is better than its competitors. This is the point where the concept of strong value proposition comes in.
The operation of the business is not possible without key partners. Hence they are essential for creating a business model. Some of the key partners can be suppliers, advertising partners, strategic alliances etc.
A strategy is required to create interest on the business. What the company must dot to be aware of its brand? Developing a strategy helps in creating blueprint of customer’s journey while documenting the key motivators for taking action.
A business model is based on many assumptions. We don’t know whether business model will meet the customer’s needs. Hence it is required to leave room for innovation. Hence reviewing the model & making the required changes would be a good idea.
Customer value proposition:
Creating an effective customer value proposition is possible with the following values:
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