Business Orientated Solutions in enforcement Business Orientated Solutions in enforcement Jos Uitdehaag

Business Model A business model describes the rationale of how an organisation creates, delivers and captures value.

Business Model: “Every organisation, whether a business or not, has a theory of the business. Indeed, a valid theory that is clear, consistent, and focused is extraordinarily powerful”. Peter Drucker, Harvard Business Review, Sept-Oct, 1994 – ‘The Theory of the Business’, p. 96. [italics added]

Business Model In other words: in theory there is no difference whether we are talking about a private business orientated or a state based organization And in practice????

A business model can best be described through nine basic 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, processes, and systems Contact

An organization serves one or several Customer Segments. It seeks to solve Customer problems and satisfy customer needs with value propositions. Value propositions are delivered to Customers through communication, distribution, and sales Channels. Customer relationships are established and maintained with each Customer Segment. The Building Blocks Value Propositions ChannelsCustomer Relationships Customer Segments The building blocks

Revenue streams result from value propositions successfully offered to customers. Key resources are the assets required to offer and deliver the previously described elements… …by performing a number of Key Activities. The business model elements result in the cost structure. Key resourcesChannelsCost structureRevenue streamsKey partnerships Some activities are outsourced and some resources are acquired outside the enterprise. The building blocks

The Building Blocks – Customer Segments Customer Segments - massmarket - niche market - segmented - diversified - multi-sided platforms The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve

The Building Blocks – Value Propositions Customer Segments Value Proposition - newness: IT use - performance - customisation - getting the job done - design - brand/ status - price - cost reduction - risk reduction - accessibility - convenience/ usability The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment

The Building Blocks – Channels Customer Segments Value Proposition - own - partner - direct - indirect Channels The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition

The Building Blocks – Customer Relationships Customer Segments Value Proposition Customer Relationships - personal assistance - dedicated personal assistance - self-service - automated services - communities - co-creation Channels The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments

The Building Blocks – Revenue Streams Customer Segments Value Proposition Customer Relationships - asset sale - usage fee - subscription fees - lending/ renting/ leasing - licensing - brokerage fees - advertising Revenue Streams Channels The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings)

The Building Blocks – Key Resources Customer Segments Value Proposition Channels Key Resources Customer Relationships - physical - intellectual - human - financial Revenue Streams The Key Resources Building Block describes the most important assets required to make a business model work

The Building Blocks – Key Activities Customer Segments Value Proposition Channels Customer Relationships Key Activities - production - problem solving - platform/ network Revenue Streams Key Resources The Key Activities Building Block describes the most important things a company must do to make its business model work

The Building Blocks – Key Partnerships Customer Segments Customer Relationships Channels Revenue Streams Value Proposition Key Activities Key Partnerships - optimisation/ economy of scale - reduction of risk & uncertainty - acquisition of resources and activities Key Resources The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work

The Building Blocks – Cost Structure Customer Segments Customer Relationships Channels Revenue Streams Key Resources Value Proposition Key Activities Key Partnerships Cost Structure - cost-driven - value-driven - fixed costs - variable costs - economies of scale - economies of scope The Cost Structure describes all costs incurred to operate a business model

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The Business Model Canvas - Example C$ R$ KP Customers who build new LEGO designs and post them online become key partners generating content and value KA LEGO has to provide and manage the platform/ logistics that allow packaging/ delivery of customer made sets KR LEGO has not yet fully adapted its resources and activities, which are optimised primarily for the mass market VP LEGO Factory substantially expands the scope of the off-the-shelf kit offering by giving LEGO fans the tools to build, showcase, and sell their own custom designed kits CR LEGO Factory builds a Long Tail community around customers who are truly interested in niche content and want to go beyond off-the-shelf kits CH LEGO Factory’s existence depends heavily on the Web channel CS Thousands of new, customer designed kits perfectly complement LEGO’s standard sets of blocks. LEGO Factory connects customers who create customised designs with other customers, thus becoming a customer match- making platform and increasing sales The Factory leverages production and logistics costs already incurred by its traditional retail mode LEGO Factory aims to generate small revenues from a large number of customer designed items. This represents a valuable addition to traditional high-volume retail revenues.

Alexander Osterwalder