The Business Model

Business Model Canvas Explained

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Some criticize this model as it does not include competition analysis. This is countered by the suggestion that this is the environment that the business finds itself rather than a business model. [ reference source: competition accessed 2012 ]

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Creative Thinking

While… to some of you, this may sound astounding, but it is possible to make a business model that does not include competition or minimizes it making you the leader (at least for a while).

This style of creative thinking of making yourself the leader might also apply to other environmental factors that you may be conditioned to think of as unavoidable including product or service life cycle (growth, steady state, decline) and you getting older. For example people can buy customers through advertising, and if others copy your idea (or produce a very similar idea), then they could potentially out-compete you by simply having a lot of money, and access to better adverts—the ability to reach out and contact customers. This type of forced competition is based on the idea that as a start-up you are forced to focus on cash flow and steady customers (valued customers) at first, and later on your focus can shift to growth (a very different business model). Advertising is problem in the growth domain, and advertising channels could be a potential competitor for the attention of your future customers. You might only learn this lesson by being in business (and making mistakes), but if you can see a problem of competition, then design it out, and make yourself a leader in this also. The key here is knowing how growth occurs, and how you want growth to occur—at your own pace; and by both understanding, and making use of the many different ways a message can go out to new people. This allows your message to reach out to new people in the way you want it to, so that potential-customers can check out, and use your product or service. Braking down growth advertising into parts for each of your customer segments (but the parts may enhance each other—synergize) via the business model: customer relationships, channels (including advertising in various ways, supply of good or service), key partners, cost structure, and value proposition are all things that might effect your business growth model. Thus the key again is to use all the parts to design it so there is no competition and ergo, you end up being the leader here also. There are many other things that also might force you into an unwanted race (and you need design these out of your business model, or make contingency plans for them), including you growing older, and your values and desires changing—such as standard business considerations like law, rent changes, technology changes, major restructuring that shift your customers habits, you getting sick (or wanting to exit or take a break from the business for some reason), cash flow, political change, cultural changes, seasonal changes, and so on. If you know how to make a standard business plan, then you might already be aware of a number of things that might need to be considered when designing your business model—giving you a chance do design out competition.

The environment you live in also forms a part of how you think. Thinking outside the restrictions, and threats of your environment can produce interesting business models that may not only be testable, but can also actually work in the real world.

Many people will object to anything that does not model itself on previously established, and successful businesses ideas–making competition and other environmental factors unavoidable. It’s up to you to decide if these critics are correct; or are they making assumptions about you, simply selling you an established package for some reason and/or they truly lack the ability to create new businesses–because competition, technology, laws, and the economy are always changing. Customers segments also change due to people having changing needs, and different jobs.

You will also change as you grow older, and possibly have problems that will keep you from the business that you love to do. Try and anticipate change and plan for it.

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