BMC Model

Business model CANVAS /CANVAS Ontology, also called outcome based business model was
developed by (Osterwalder & Pigneur, 2010). It was built on nine building blocks/structures
namely: Key activities, value propositions, customer relationships, key partners, customer
segments, cost structure, key resources, distribution channels, revenue streams. The visual
representation is as the following.

Key Partners Key Activities Customer Customer

Relationships Segments

Value
Proposition Channels
Key Resources
Cost Structure
Revenue Streams

STOF Model

The STOF model ((Service, Technology, Organization, and Finance)) developed by (Bouwman,
Haaker, & De Vos, 2008). STOF focuses on the service instead of the service provider. The STOF
framework addresses service innovation in relation to business models. More explicitly the STOF
method has been developed as a design tool for robust business models. It is argued that service
innovation requires various perspectives to be incorporated. Firstly, both consumers and service
providers have to be incorporated since together they create a service. In fact they produce and
consume it simultaneously. Secondly, a technological perspective is taken since technology plays
an important role in opening up new opportunities for new services and has allowed services to be
provided to new and larger markets. To be able to deliver the value proposition and have the
technology, service providers rely on actors in their value network. All these aspects contribute to
getting a revenue stream.
Service domain:
The service domain, mainly focuses on the customer and the value proposition as intended by the
firm for the customer. Hence, it is important to realize that the value proposition as intended by a
service provider will not per sé be perceived in a same way. In light of this four concepts related
to the value proposition can be considered. From the consumer perspective there is expected value
vs. perceived value. And from the provider perspective there is intended value vs. delivered value.
The service domain takes the provider perspective, looking at the organizations’ value proposition
and the market segment with the (potential) customers in this segment. The central issue in
designing a service is ‘value’: a provider intends to deliver a certain value proposition and
customers or end-users expect and perceive a certain customer value. This is addressed by four
inter-related concepts: intended and delivered value on the part of the provider, and expected and
perceived value on the part of the customer or end-user
Technology domain:
The technology domain solely focuses on the technology and backbone infrastructure being
utilized to deliver a service.
Organization domain:
The organizational issues revolve around the resources and capabilities, mainly related to
technology, marketing and finance that have to be made available to enable the service.
Organizations are often looked at from a resource based view, meaning that an organization can
deliver value by means of the resources it has. Also that an organization will have a competitive
advantage once resources satisfy the so called VRIN (meaning resources are Valuable, Rare,
Inimitable, and non-substitutable) conditions. Critique on this view is that it is to internally
oriented, focusing on the individual organization than on competitors. Moreover, a vertical value
chain is considered. This last point stems from the argument, that in order to obtain resources,
service providers rely on other service providers that make these resources available. Cooperation
with these providers leads to a network rather than a single chain. Hence, access to critical
resources is the key element in deciding which actors to incorporate in a value web. The STOF
model takes the later approach, thus in this domain the focus lies on actors in the value network,
the interactions between those actors, their strategies and goals, and thus not only a single
organizations resources, but also those of the other actors in the network
Finance domain:
For all business models the finances are of key importance. Although, the domain is quite
straightforward, it is an important part of the business model. The following aspects are parts of
the finance domain: costs, revenues, risk, pricing, investments, and financial arrangements.
Financial resources are one of the most important resources to be required. Finance also defines
the bottom line of most of the services to be designed. With regard to financial arrangements, there
are two main issues: investment decisions and revenue models. The service domain is described
by the customer/end-user (who are part of a market segment) and four inter-related customer value
concepts. It also describes a number of service concepts that influence or co-determine the
customer value, for example, the previous experience.
STOF Model Template

Value for customers

Service Domain

Technology
Organization
Domain
Domain

Value for service providers

Finance Domain

VISOR model.
This model is developed by El Sawy & Pereira, 2013 and built on the proposition of delivering
the greatest value proposition that maximizes the willingness to pay of customers, and also
 minimizes the real cost of delivering these services. It distinguishes between value on one side and
cost on the other side. In this model they divide a business model in five rough categories;
(1) Value proposition; here is described what products and services create value for the customer,
and what the customer value is.
(2) Interface; this aspect focuses on the delivery of a service or product, since this strongly
influences user experience.
(3)Service platform; the infrastructure platforms that support the business processes that are
needed to deliver products and services, and improve the value proposition
(4) Organizing model; how a company or its partners organize their business processes, value
chains, relationships etc.
(5) Revenue model; focuses on the financial aspect, the value proposition should deliver value
such that revenues exceed costs.

Value proposition Interface

for targeted
customer segment
Real value
proposition Real cost of delivery

VISOR Framework
Revenue/cost Service
model platforms
calculations
for all partners

Organizing model for

processes and
relationships
Value Mapping Tool:

This model was developed by Bocken Short, Rana, & Evans as a brainstorm tool, in order to
consider the different value perceptions of different stakeholders. The focus lies on value,
captured, destroyed, and missed. Where value captured is the current value proposition, the value
destroyed refers to negative environmental and social impacts. Value missed, refers to
underutilization of resources, waste streams and failure to capture value. Thus focusing mainly on
the value proposition and how value is perceived by various stakeholders therefore lacks other
important aspects of the business model. And as such it is a tool that takes a network perspective
rather than that of a firm or service.

A “value mapping tool” is conceived to help companies create value propositions to support
sustainable business modelling. It assists companies in embedding sustainability into the core of
the business model through an improved understanding of the value proposition, and supports an
iterative process for analyzing sustainable value creation opportunities from a multi-stakeholder
perspective.
The tool is intended to map out and transform the business model of an entity to deliver
sustainability, rather than serving the purpose of competitor analysis. Hence, competitors are not
explicitly included.
Value proposition of the network represents the benefits delivered to stakeholders for which
payment or another value exchange takes place. In delivering the value proposition, individual
stakeholders and networks collectively may destroy value. Value destroyed can take various forms
often referred to as negative externalities.
Missed value opportunities represent situations where individual stakeholders squander or fail to
capitalize on existing assets, resources and capabilities, are operating below industry best practice,
or fail to receive the benefits they seek from the network. This might be due to poorly designed
value creation or capture systems, failure to acknowledge value, or inability to persuade others to
pay for the benefit. New value opportunities help expand the business into new markets and
introduce new products and services that offer enhanced benefits to stakeholders.
The tool has the following specific aims:
  Understand the positive and negative aspects of the value proposition of the value network
(i.e. the network of stakeholders involved in creation, delivery and receipt of value
associated with provision of a product/service);
 Identify conflicting values (i.e. where one stakeholder benefit creates a negative for
another stakeholder), so that action can be taken to tackle these;
The circular form/round logic/ of the tool is developed over a series of discussions to facilitate a
system-perspective of value, encourage equal consideration of all stakeholder interests, and
explore the inter-relatedness between different stakeholders.
Many business modelling processes and tools focus on the customer value proposition. However,
this tool seeks to expand the range of stakeholders or recipients of value, including the
environment and society. Each segment represents a stakeholder group. It is a network centric
rather than institutional centric perspective to encourage the optimization of value in a network.
It Identifies opportunities for business model redesign and realignment of interests to reduce
negative outcomes and improve the overall outcome for the stakeholders in the value network -
especially for society and the environment.
 Non-government
organizations
Government

Value opportunities-new opportunities for additional value creation and capture

through new activities and relationships

Research and

institutions
academic
Value missed-value currently squandered, wasted or
inadequately captured by current model

Value destroyed-negative value outcomes

of current model

Value captured-current value

proposition

Purpose

Community

Suppliers and
partners

Media

Customers
 Overview of components of the four BM`s discussed

CANVAS STOF Value mapping Tool Visor

1. Customer Segments 1. Service domain 1. Academia 1. Value proposition
Customer
Value captured Customer relationship
2. Value Propositions Target group
Value destroyed Customers
Value proposition
3. Channels Value missed Customer value
Service offering
Value opportunities Customer understanding
4. Customer Relationships Context of use
2. Customers
Effort for the customer
5. Revenue Streams Idem... 2. Interface
Customer relation
3. Investors/owners of the service Customer interface
6. Key resources provider
2. Technology domain Value interfaces
Idem...
7. Key activities Services and linkages
Technological functionality 4. Employees/hired staff
Service platform
8. Key partnerships Architecture Idem...
Key resources
Channels 5. Suppliers and partners
9. Cost structure IT infrastructure
Applications (apps) Idem...
Technology
Devices 6. Environment
Logistical stream
Service platforms Idem...
3. Organization domain Core technology investments
7. Community
Actors 3. Operational model
Idem…
Actors` resources and capabilities organizational characteristics
8. Government
Value activities key partnerships
Idem...
Strategic interests channels
9. NGOs and CSOs
Organizational arrangements value network
Idem...
connected activities
4. Financial domain 10. Media
stakeholder network
Investments Idem...

Costs 4. Revenue model

Revenues financial aspects

Financial arrangements revenue stream

Risk financial model

financial flows
BCG Business Model
Boston Consulting Group (BCG, 2009) developed a business model with two elements: value
proposition and operating model joined together to form a business mode.
The value proposition is divided into three dimensions, target segment(s), product or service
offering, and revenue model, aimed at answering the question What are we offering to whom?.
The operating model is divided into value chain, cost model and organization, which aims to
answer how do we profitably deliver the offering?

Value Proposition

Target Segments Product or Service Offering Revenue Model

Business Model

Value Chain Cost Model Organization

Operating Model
Integrated Business Mode
In the strategy model, the top management defines medium and long-term goals and activities of
a company in order to persist on the market. In this context, it is generally postulated that these
strategies unite the business vision, mission and goals. The determination of the positioning and
definition of strategic business areas is connected to this.
In the resources model, the core assets and core competencies are depicted as well as their
subordinate elements relevant to value creation. It is thus a summary of all relevant tangible and
intangible input factors of the business model. In this process, both internal and external resources
and competencies are presented.
The network model gives an overview of the value constellation partners in value creation and the
connections between different business models. In this context, the network model is an instrument
of the top management to control and manage value distribution.
The market offer model and the customer model are intended for the planning of value capture
which eventually appears in the revenue model. Therefore, the different offers of the business
model are compared according to their value proposition, cost structure and, to some extent, their
suitability for coopetition. As a second step, the offers of competitors are included in this analysis.
Offers are finally made to customers which can be divided into different segments according to
the customer model and which in turn interactively influence the design of offers. Performance
can further be differentiated into the areas of presentation, distribution and service. After the
transaction has been made, the monetary revenue stream is transferred to the business model by
the customers and completes the value creation phase of value capture.
The visual representation is as shown below.
 Strategy Model Resources Model Network Model
Strategic Business model mission Core competences BM networks
Strategic positions and
Component Core assets BM partners
development paths
BM value proposition

Customer and Customer Model Market Offer Model Revenue Model

Market Customer Competitors Revenue streams
Component relationships/target
Market structure Revenue
groups
Channel Configuration differentiation
Value offering/products
Customer touch-point or services

Production of Procurement Model Financial Model

Value Creation Goods and
Resourcing Financing model
Services
Component
Information Capital model
Manufacturing
model Cost Structure Mmodel
Value generation