Exam 6: The Business Model

Match the business model headings with the question addressed beneath each heading. -Key Activities

The main difference between traditional enterprise and social enterprise is the motive behind the venture.

When people in a certain sector or branch use approximately the same business model, this is referred to as industrial wisdom/industrial logic - a generally accepted idea of how things are done in a certain branch (and how things aren't done).

In an entrepreneurial context, a business model is often the result of entrepreneurial experimentation and learning. Effectuation and Lean Startup are examples of this successive logic.

Proponents of the value pyramid claim that one should think in terms of value constellations when composing a proposition. This expression can be defined as a combination of value elements that together constitute a unique and attractive proposition.

In order to grasp the concept of the business model, the book lists various alternative definitions. Which three of the following are correct? A business model:

Within an organization, there is a strategic level and an operational level (containing concrete processes and flows of activity). Where does the business model fit in this universe?

The book states that revenue and costs are mutually interdependent. Without costs, no revenue and without revenue, no ability to cover costs.

When creating a business model, the work of answering questions and calibrating responses is called business modelling or business model design. These words reflect the nature of creating a business model as:

The final paragraph in Chapter 6 (Business Model) states that a perfect business model on paper is no guarantee of success. It continues by stating that it is probably better to have a mediocre business model with a strong X than a mediocre X of even the very best of business models! What is the condition (X)?

The book discusses two tools, namely the Value Curve and The Four Questions. They are used to ensure that the proposition is sufficiently differentiated.

The business model can be seen as providing an answer to certain key questions, including: What will the customer be provided? Who is the customer? How or with whom should the offering be produced? How will it be financially sustainable?

Match the business model headings with the question addressed beneath each heading. -Customer Relationships

Blue Ocean Strategy is a book on management and strategy which argues that in highly competitive situations, where the pressure to cut prices is often very high, one should develop radically different value propositions that render the competition irrelevant.

The business model can be said to form a bridge between the strategic and operational levels, indicating what in the way of ideas, resources, activities and relationships is needed to carry out a given strategy successfully.

The book contains the following quote by Henry Chesbrough. "The economic value of a technology remains latent until it is commercialized via a business model. " In other words, technology alone is not enough - it must be translated into a business model that captures/extracts the financial value.

Social enterprise means that people conduct socially beneficial work using many of the same ideas and tools that make entrepreneurship economically stable and efficient.

Social impact is at the top of the value pyramid. This can be defined as…

One of the roles of a good model is to simplify reality so that it becomes easier to understand and easier to discuss.

Match the business model headings with the question addressed beneath each heading. -Channels