Catalog
concept#Governance#Product Strategy#Delivery & Channels#Organization

Business Model

Concept describing how an organization creates, delivers and captures value. It structures customer segments, value propositions, revenue streams and costs and links them to organizational and product strategy.

A business model describes how an organization creates, delivers and captures value.
Established
Medium

Classification

  • Medium
  • Business
  • Organizational
  • Intermediate

Technical context

CRM and analytics systemsFinance and BI platformsStrategy and project management tools

Principles & goals

Value proposition first: customer needs are the starting point.Iterative learning: models are tested early and adapted.Holistic perspective: link finance, organization and product.
Discovery
Enterprise, Domain

Use cases & scenarios

Compromises

  • Incorrect pricing assumptions lead to financial problems.
  • Overestimating channel scalability.
  • Ignoring regulatory requirements.
  • Use canvas visualizations for collaborative discussion.
  • Prioritize hypotheses and test iteratively.
  • Link model decisions with KPIs.

I/O & resources

  • Market and customer research
  • Financial figures and budget assumptions
  • Organization and process overviews
  • Model variants and scenarios
  • Decision proposals for stakeholders
  • Implementation roadmap

Description

A business model describes how an organization creates, delivers and captures value. It covers customer segments, value propositions, channels, revenue mechanisms and cost structures. The concept guides strategic decisions, validates new offers and aligns organization, product and revenue streams. It is used in workshops and strategic planning.

✔

  • Clarity about revenue streams and cost structure.
  • Basis for strategic prioritization.
  • Facilitates communication with stakeholders.

✖

  • Simplifying complex reality can obscure details.
  • No guarantee of market success despite good modeling.
  • Can become outdated quickly in dynamic markets.

  • Revenue by income stream

    Measures the contribution of different revenue mechanisms to total revenue.

  • Customer Lifetime Value (CLV)

    Estimates the expected value of a customer over the entire relationship.

  • Cost structure ratio

    Analyzes fixed vs. variable costs as a share of total expenditure.

Marketplace platform model

Marketplaces connect suppliers and demanders, monetizing via transaction fees and supplementary services.

Subscription model for software

Recurring subscriptions secure ongoing revenue and enable continuous product development.

Freemium model

Basic features are free, premium features are paid; the aim is scaling and targeted monetization.

1

Capture the current business logic and core assumptions.

2

Model alternative value propositions and revenue sources.

3

Conduct rapid validation experiments with customers.

4

Assess financial impact and scalability.

5

Derive organizational and technical adjustments.

⚠️ Technical debt & bottlenecks

  • Legacy systems prevent flexible pricing models.
  • Lack of data infrastructure hinders validation.
  • Fragmented platforms block cross-channel offerings.
Capital constraintsScalability of distribution channelsRegulatory constraints
  • A company runs multiple incompatible pricing models simultaneously and confuses customers.
  • The model is never updated and ignores changed customer behavior.
  • Focusing on margins leads to neglect of customer retention.
  • Overestimating economies of scale without operational foundation.
  • Underestimating legal or regulatory requirements.
  • Ignoring indirect costs in the cost structure.
Business modeling and strategic analysisFinancial literacy and costingCustomer and market research methods
Market requirements and customer needsFinancial sustainability and marginsOrganizational capabilities and governance
  • • Existing contracts and partnerships
  • • Technological platform dependencies
  • • Legal and tax frameworks