« The origin and common sense of the Business Model »
This episode reminds us that “Business Model” became a buzzword with the advent of Internet startups, even if it existed before (see Magretta, 2002). This is not surprising because it abounds in common sense. In order to make complex business cases intelligible, it was necessary to model the business.
« Nature of the Business Model »
According to the authors of the GRP model, the Business Model is a convention. However, to popularize the theory and in order to avoid confusion with the “conventions” component of the GRP BM (see episode 11), GRP Lab speaks of “shared representation” with the owners of the resources needed to undertake the project, who thus become stakeholders by injecting those resources. The BM is therefore a shared representation.
« The GRP Business Model »
This episode presents the dimensions (G, R and P) of the GRP model that define the BM as a shared representation related to the Generation of Value, the Remuneration of Value and the Participation in Value Exchanges. The concept of value is polysemous and central in the definition of the BM. Each dimension has three components and the GRP BM GRP is thus a 9-component system, all the components being interlinked.
« The entrepreneur(s) »
The first component is the project manager(s). Resource providers pay great attention to the project manager. His profile, motivations, experience, etc… are closely studied. This episode encourages potential entrepreneurs to get to know themselves well in order to promote themselves better.
« The value proposition »
Once again, the phrase makes plain common sense because if what is proposed has no value, nobody will want it. The « value proposition » is the phrase used by almost all specialists of the Business Model. According to GRP Lab, it requires working on the business idea (origin, development, protection and transformation into a concrete offer) and the business opportunity (attractiveness of the market, customer targeting, analyzing the competition, presenting the ambition of the project), whether it is seized or created.
« Value manufacturing »
Promising the value of the offer is not sufficient (cf. component Value Proposition): you have to know how to create it. This process consists in identifying and capturing the tangible and intangible resources necessary to the project, arranging and organizing them to create the product or service and delivering it to the stakeholders, but first and foremost the customers or users.
« Sources of revenue »
This episode explains what the GRP BM calls “sources of revenue”: the financial resources collected to sustain and develop the operation of the project, whether it is a company (turnover), an association (turnover in certain cases or other types of revenue, contributions, operating grants, …), a department of a public service, etc… Any ambitious project will always require such means.
« Volume of revenue »
After having clearly identified the sources of revenue, its volume needs to be estimated, which is not easy with a business creation ex nihilo. However, thinking through where revenue can come from leads stakeholders to reflect about business opportunities, even though the reality of the project will lead to adjustments.
« Performances »
This word is in its plural form because it refers both to financial and non-financial performance. Financial performance concerns operating profitability (break-even point) and return on investment (financing plan) while non-financial performance refers more to qualitative aspects such as brand awareness, perceived service quality, image, etc.
« The stakeholders »
In addition to episode 2 which deals largely with stakeholders with whom the shared representation is built, this episode emphasizes the “partnership” aspect of entrepreneurship: no partner means no resource and without resources, there can be no project! The episode discusses how a matrix can be built that constitutes a sort of dashboard for the business network.
« The conventions »
This is a component that is apparently more difficult to grasp especially because it does not figure in strategic models, even though conventions are to be found everywhere in social systems. Conventions may be more or less explicit and formal and guide stakeholders in their behavior. Whether one refers to them or circumvents them, they cannot be ignored because they are part and parcel of the business.
« The ecosystem »
Tout projet s’insère dans un écosystème. L’épisode adopte une métaphore écologique pour mettre au jour les dimensions à étudier, notamment par la mise en place d’un système de veille. Entre autres, il propose d’utiliser l’outil PESTEL.
« The Business Model : a system »
Filling in each component of a Business Model is not enough to design it. The whole model must be consistent and coherent, so the links between the components have to be thought out.