WYCHE
INNOVATION
CENTRE
Business Models & Introduction
to Business Modelling
Learning Objectives
◦ Understand the difference between common business models
◦ Compare and contrast common business models when applied
to a business
Business Models
◦ A business models is the system that transforms intangible
business ideas into products/services that have value in the
market place (Hedman and Kalling, 2003)
◦ Business models define:
◦ How a firm works
◦ Who its customers are
◦ What the customer values
◦ How a firm makes money
◦ How value can be delivered to the customer cost effectively
Magretta (2002)
Classifying Business Models
Business models provide a framework creating and delivering
value to the end consumer. This can be done in the following
ways:
1. Product/service provider
◦ Offers an end product or service to the customer
2. Ownership and rent of key assets
◦ Offers customers the use of a product/service
3. Finance provider
◦ Offers customers access to money and capital and associated
services
Tidd & Bessant (2013)
Classifying Business Models
4. Systems integrator
◦ Pulls together components on behalf of customers
5. Platform provider
◦ Offers a platform from which other businesses can create value
6. Network provider
◦ Offers access to a network
7. Skills provider
◦ Rents or sells access to knowledge or human resources
8. Outsourcer
◦ Offers to take responsibility for a non core/key activity for another
business
Business Model
Classification Discussion
◦ Come up with an existing business which could be categorised
under each of the business model categorises
◦ What business benefits could be gained from categorising
businesses based on their business model?
◦ Do you think it is a good idea for a single business to adopt
several business models?
◦ How/why have you come to this conclusion?
◦ Is one business model more sustainable than other?
◦ How/why have you come to this conclusion?
Case Study: Wyche
Innovation Centre
In their own words:
◦ Managed by Key IQ
◦ An innovation and technology hub in Worcestershire. They provide
workspaces and business services
◦ Flexible to suit the needs of both small and growing businesses.
Operating an easy in and easy out policy
Video
◦ Embed/show video
Case Study Discussion
Questions
◦ What type of business model(s) would you classify the Wyche
Innovation Centre of currently following?
◦ How/why have you come to this conclusion?
◦ What are the benefits for the Wyche Innovation centre of having
two different business models?
◦ Are there ever any potential dangers with operating more than
one business model in a single business?
Mapping the Key Elements
of a Business Model
◦ Many tools exist to help with the mapping and visual
representation of a business (including the Business Model Canvas)
◦ When mapping the key elements of a business it is important to
consider the following:
◦ What is the value proposition offered by the business?
◦ What are the key activities and resources required to realise the value
proposition?
◦ Who is the customer segment is?
◦ How will the firm will generate revenue money?
Mapping the Key Elements
of a Business Model Activity
1. Answer the following questions for the case of the Wyche
Innovation Centre in order to map out the key elements of their
business plan
2. Pick a business and answer the following questions for that
business in order to map out the key elements of their business
plan
◦ What is the value proposition offered by the business?
◦ What are the key activities and resources required to realise the value
proposition?
◦ Who is the customer segment is?
◦ How will the firm will generate revenue money?
References
◦ Hedman, J., Kalling, T. (2003) The Business Model Concept:
Theoetical underpinnings and empirical illustrations, European
Journal of Information Systems, 12(1), 42-59
◦ Magretta, J. (2002) Why Business Models Matter?, Harvard
Business Review, 80(5), 86-92.
◦ Tidd, J., Bessant, J. (2013) Managing Innovation: Integrating
Technological, Market and Organizational Change, John Wiley
& Sons: Chichester.