ELECT 4:

ENTREPRENEURS
HIP
Business Model
What is Business Model?
What is Business Model?
Business Model
A business model is a description of the means and
methods a firm employs to generate sales revenue, profit,
and cash flow, while providing a template for the business
to scale up.
Business Model
 Offering model
Composed of what people in the marketing and sales
departments typically handle – target market, value
proposition, channel, customer bonding strategy and
revenue model.
Business Model
 Operating model
On the other hand, is what people in the operations
department, like supply chain and customer fulfillment,
oversee – value chain, resources and processes.
Complementors, configuration and cost.
 PARTS OF A BUSINESS MODEL
(Source: Mansmith and Fielders, Inc.)

OPERATING MODEL OFFERING MODEL

VALUE NETWORK TARGET NETWORK

COMPLEMENTORS CHANNEL

RESOURCES AND VALUE

PROCESSES PROPOSITION
CUSTOMER
CONFIGURATION BONDING
STRATEGY

COST REVENUE MODEL

PARTS OF BUSINESS MODEL
Offering Model
 Target Market
The intended recipients of a firm’s products or services.

 Value Proposition
The relevant and unique benefit that the consumer gets
from buying or owning the firm’s product or services.
Offering Model
 Channel
The distribution system where products or services will
be made available to the customers.

 Customer Bonding Strategy

The relationship as well as the solution that will be
established with buyers and end users.
Offering Model

 Revenue Model
The compensation a firm will get for providing its value
proposition to support its intended profit.
Operating Model
 Value Network
The strategic linkage of extended supply chain for the
firm to provide specific products or services to the
customers.

 Complementors
People or groups who will help, both directly and
indirectly, to enhance the value proposition.
Operating Model
 Resources and Processes
Resources – the hard and soft assets deployed by the
firm to carry out its value proposition for the customers.
Processes – the critical repetitive activities that are
routinized by the company to deliver the value to the
customers and to the company in a sustainable way.
Operating Model
 Configuration
Rearrangement of resources, processes, activities and
offerings that can help enhance the profit goal of the
company.

 Cost
The monetary consequences of the means to carry out
the value proposition
 The Business Model of Waters Philippines

OPERATING MODEL OFFERING MODEL

TARGET NETWORK
VALUE NETWORK
Buyers: Middle Class CHANNEL
COMPLEMENTORS Importer
water refill station Pre sales: Exhibits &
Convert interested Distributor
customers. Public service
users into distributors End users
Min. P600 monthly Transaction : Direct
selling
Independent VALUE
RESOURCES AND Post sale – Field service
Collectors PROPOSITION
PROCESSES
Buyers – Peace of
Exclusively CUSTOMER BONDING
CONFIGURATION mind without the
relationship with STRATEGY
Independent pay lifetime expense, pay
sales leader, Training Buyers : Service
system on installment
Maintenance Agreement
COST
Incentive cash sales Product Cost REVENUE MODEL For Distributors :
to reduce money cost Variable selling costs Sales of units interest Trainings and seminars,
income (for Car Plan, Travel Plan
Admin Costs
installment sales)
Marketing Cost
END