Business model can be best described through nine building blocks that show the logic of how a company intends to make money. The nine blocks cover the four main areas of a business: customers, offer, infrastructure, and financial viability. The business model is like a blueprint for a strategy to be implemented through organizational structures, process, and systems.
Per Business Model Generation Book, following are the 9 blocks –
- Customer Segments – An organization serves one or several customers.
- Value Propositions – It seeks to solve customer problems and satisfy customer needs with value propositions.
- Channels – Value Propositions are delivered to customers through communication, distribution, and sales Channels.
- Customer Relationships – Customer relationships are established and maintained with each customer segment.
- Revenue Streams – Revenue streams result from value propositions successfully offered to customers.
- Key Resources – Key resources are the assets to offer and deliver the previously described elements.
- Key Activities – Performing a number of key activities
- Key Partnerships – Some activities are outsourced and some resources are acquired outside of the enterprise.
- Cost Structure – The business model elements result in the cost structure.
