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BUSINESS MODEL GENERATION EXERCISE 1 INSTRUCTIONS
What is a Business Model?
A business model concept helps a company describe to employees at every level how
value will be added to the organization and given to the customer. In order to be successful, the
concept cannot be complex, but instead must be simple, relevant, and understandable to each
member of the organization. “The mission statement of Amazon.com centers around the one
thing that’s always been most important – the online Amazon.com customer” (Farfan, 2018).
Amazon has an unstaiable customer obsession that drives everything that the company does and
Jeff Bezos has made this abundantly clear to every member of his 600,000 person team. The
company’s strict adherence to its business model and mission statement is arguably one of the
greatest reasons the company has experienced astronomical success throughout the company’s
18-year lifespan.
Every company has a business model that they employ in order to seek competitive
advantage within their particular industry. “An updated generic business model framework
consists of four primary categories, namely, value proposition, value capture, value creation, and
value network, and could be useful for a variety of organizations, profit and non-profit, with
various mission and vision orientations and interaction with the environment” (Peric, Vitezic, &
Durkin, 2017). The importance of having a clear business model concept is being increasingly
realized by managers within the modern-day workplace, who are working to delineate the
company’s vision in a way that is understandable and relatable at every level in the firm. In
some ways, the business model can be seen as the anchor that holds the company’s values within
the turbulent environment of the 21st century’s globalized economy.
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According to the Business Model Generation and/or Strategic Management Concepts and
Cases literature, what is a business model?
“A business model describes the rational of how an organization creates, delivers, and
captures value” (Osterwalder & Pigneur, 2018, p. 14). In the last twenty years, business leaders
have tried to organize their most competitive practices around creating value propositions for
their customers. “The business model (BM) concept emerged in theory and practice without a
consensus on the understanding of the concept, but it has become a well accepted and useful
construct in fields such as strategy, organization, information systems and technology” (Musulin
& Strahonja, 2016). To better understand the business model concept and leverage its strategic
capabilities, managers and leaders within the organization must consider t nine building blocks:
customer segments, value propositions, channels, customer relationships, revenue streams, key
resources, key activities, key partnerships, and cost structure. Understanding how each of these
building blocks are able to play a role within the organization is how the company is able to
innovate and determine what future developments will be made. “Effective organizations
constantly align the elements of their business model to the environment in which they are
operating” (Fjeldstad, O.D. & Snow, C.C., 2018). This dynamic dimension of the business
model concept is what sets apart companies, such as Amazon.com, Uber, and Apple from their
competitors in an ever-changing business environment.
What role do value propositions perform in successful business models?
“A value proposition creates value for a customer segment through a distinct mix of
elements catering to that segment’s needs” (Osterwalder & Pigneur, 2018, p. 23). Value
propositions give the company a competitive advantage in encouraging customers to choose their
product or service over another company’s offering. Apple’s user-friendly interface has long
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been a reason for customers to choose their various product platforms over companies that
arguably may have more depth in their performance capabilities. A value proposition can be
defined in the branding context as “a statement of the functional benefits, emotional benefits, and
self-expressive benefits that provide value to the customer” (Starr & Brodie, 2016, p. 718). For
value propositions to perform a role in successful business models, the company must start by
asking the question, ‘what value are we creating?’. Once this question has been answered, the
company can begin making decisions that solve the customer’s problems and satisfy their needs.
“Given that value propositions are considered one of firms’ most important organizing
principles, and the development of improved value propositions has been highlighted as a key
research priority, industrial firms need more understanding on how to integrate environmental
and social elements into value propositions” (Patala, Jalkala, Keranen, Vaisanen, Tuominen, &
Soukka, 2016). Larger companies are able to spend strategically driven time to
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RQ4 How does “Brainstorming New Business Models” by answering the “What If” questions
impact successful businesses? This must be at least 2 paragraphs.
Deliverables:
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This assignment must be in a business professional format with a cover page in
current APA format and must contain at least 600–800 words. This assignment
must also include current APA citations and references.
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You must post the final draft of this assignment in Blackboard using the
SafeAssign link provided. Before submitting your final draft, check for any
plagiarism issues with the SafeAssign Draft link provided. NOTE: All SafeAssign
scores must be less than 28%.
Submit this assignment by 11:59 p.m. (ET) on Sunday of Module/Week 4.
References
Farfan, B. (2018). Amazon.com’s Mission Statement. The Balance Small Business. Retrieved by
https://www.thebalancesmb.com/amazon-mission-statement-4068548
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Fjeldstad, O.D. & Snow, C.C. (2018). Business models and organization design. Long Range Planning
51(1): 32-39. Retrieved by https://www-sciencedirect-
com.ezproxy.liberty.edu/science/article/pii/S0024630117303151
Musulin, J. & Strahonja, V. (2016). Business Model Concept Unburdened: The State of the Art. Central
European Conference on Information and Intelligent Systems: 71-79. Retrieved by https://search-
proquest-com.ezproxy.liberty.edu/docview/1833969601?pq-origsite=summon&accountid=12085
Patala, S., Jalkala, A., Keranen, J., Vaisanen, S., Touminen, V., Soukka, R. (2016). Sustainable value
propositions: Framework and implications for technology suppliers. Industrial Marketing Management
59: 144-156. Retrieved by https://www-sciencedirect-
com.ezproxy.liberty.edu/science/article/pii/S0019850116300232
Peric, M., Vitezic, V, & Durkin, J. (2017). Business Model Concept: An Integrative Framework Proposal.
Managing Global Transitions 15(3): 255-274. Retrieved by
https://doaj.org/article/395051eed5a949e5824b922f368f16cb
Starr, R.J. & Brodie, R.J. (2016). Certification and authentication of brand value propositions. Journal of
Brand Management 23(6): 716-731. Retrieved by https://search-proquest-
com.ezproxy.liberty.edu/docview/1871311123?pq-origsite=summon&accountid=12085
