Q3. Describe how business model explain the way key components of the enterprise work together to make money. Explain how you can design strategy to differentiate an enterprise and confer it with a competitive advantage. Also, explain the five step process for formulating strategy and aligning business activities with it?

Virtuestar

5 years ago

Business model design generally refers to the activity of designing a company's business model. It is part of the business development and business strategy process and involves
design methods . Massa and Tucci (2014) highlighted the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high technology entrepreneurship, and changing an existing business model, such as when the tooling company Hilti shifted from selling its tools to a leasing model. They suggested that the differences are so profound (for example, lack of resource in the former case and inertia and conflicts with existing configurations and organisational structures in the latter) that it could be worthwhile to adopt different terms for the two. They suggest business model design to refer to the process of crafting a business model when none is in place and business model reconfiguration for process of changing an existing business model, also highlighting that the two process are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model.
Economic consideration
Al-Debei and Avison (2010) consider value finance as one of the main dimensions of BM which depicts information related to costing, pricing methods, and revenue structure. Stewart and Zhao (2000) defined the business model as
a statement of how a firm will make money and sustain its profit stream over time.
Component consideration
Osterwalder et al. (2005) consider the Business Model as the blueprint of how a company does business. Slywotzky (1996) regards the business model as the totality of how a company selects its customers, defines and differentiates it offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profits.
Strategic outcome
Mayo and Brown (1999) considered the business model as the design of key interdependent systems that create and sustain a competitive business. Casadesus-Masanell and Ricart (2011) explain a business model as a set of
choices (policy, assets and governance) and
consequences (flexible and rigid) and underline the importance of considering how it interacts with models of other players in the industry instead of thinking of it in isolation.