In a previous article, we looked at the types of business models and how an understanding of these can help businesspersons analyze their business ideas. We learnt that MIT has identified the four basic business models as Creators, Distributors, Landlords and Brokers. While creators and distributors sold full ownership rights to their customers, landlords sold only a right to use for a specific period or under certain conditions. Brokers did not sell directly but provided matchmaking services by bringing sellers and buyers together. In this article we look at how business modeling can help strategy development.

A Sample Business Model

Understanding concepts is easier with a graphic and we use the Business Model Canvas developed by Dr Alexander Osterwalder and Yves Pigneur. The canvas (image attached to this article) proposes nine building blocks that can define any business: