7. Eight Key Ingredients of a Business Model Key Questions Business Model Components Value Proposition Why should the customer buy from you? Revenue model How will you earn money? Market opportunity What marketspace do you intent to serve, and what is its size? Competitive environment Who else occupies your intended marketspace? Competitive advantage What special advantages does your firm bring to the marketspace? Market strategy How do you plan to promote your products to attract customer? Organizational development What types of organizational structures within the firm are necessary to carry out the business plan? Management team What kinds of experiences and background are important for the company’s leaders to have?
51. A Spectrum of Choices Joint Venture Mostly integrated Slightly integrated Moderately integrated Partnership Separate Slightly integrated Moderately integrated Model Brand Management Operation Seamless Fully integrated Fully integrated Fully integrated
52. Decision Process Brand Separation Integration Does the brand extend naturally to the Internet? Yes Will we need to price differently? Yes Management Do we have the skills and experience? Yes Will there be major channel conflict? Yes Does the Internet threaten the current business model? Yes
53. Decision Process Operations Separation Integration Do our distribution systems translate well to the Internet? Yes Do our information systems provide a foundation on which to build? Yes Does either systems constitute a significant competitive advantage? Yes
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