Entrepreneurship & business planning
1. Designing Viable Business Models
Model
“a simplified description and representation of a complex entity or process”
➢ BUSINESS MODEL
o Describes the rationale of how an organization creates, delivers, and captures
value
o It’s like a blueprint for a strategy to be implemented through organizational
structures, processes, and systems
o It’s a conceptual tool containing a set of objects, concepts and their
relationships with the objective to express the business logic of a specific firm
o Therefore we must consider which concepts and relationship allow a
simplified description and representation of what value is provided to
customers, how this is done and with what financial consequences
/!\ know by heart
o A story of how a business works Commented [WS1]: People love stories, put it into a
▪ The method of doing business by which a revenue is generated story, make one
o Needs too pass two critical tests e.g. Glasses: ‘we were disgusted at having to pay 500 for
▪ Narrative test glasses so we make them for 100’
▪ Numbers test
o Think of business modelling as the managerial equivalent of the scientific
method: hypothesis → test in action → revise when necessary
o ‘A business model is nothing else than a representation of how an organization
makes (or intends to make) money’ ~ Peter Drucker
o At the end of the day, the business model should be condensed onto one page
o Three purposes a business model serves (Barringer and Ireland 2019)
1. CLARIFY THE VALUE PROPOSITION
• What problem does the firm solve? For whom? And how?
2. GUIDE RESOURCE ALLOCATION
• Which resources are essential, and how are they best deployed?
3. ARTICULATE A COHERENT STRATEGY
• How do the elements of the business model align to create and
sustain competitive advantage?
1
,Strategy vs. business model
➢ Strategy = business model?
o Business models describe, as a system, how the pieces of a
business fit together. But they don’t factor in one critical
dimension of performance: competition.
o Sooner or later—and it is usually sooner—every enterprise runs
into competitors. Dealing with that reality is strategy’s job. A
competitive strategy explains how you will do better than your
rivals.
o A firm’s strategy is deeply rooted in that particular firm’s
competitive environment.
➢ Which comes first: strategy or business model?
Note:
If you do something don’t focus on social media, especially if something already exists
because people will always compare it to the ‘original’.
Don’t think of your competition first and don’t copy too much, make it unique.
Create a buzz around your feature, a story, a narrative, use influencers to get people.
Mission: Why are we doing what we are doing? E.g. university: at first forming
executives for Dutch area, eventually evolved into KUL today
Vision: Where you’re going to
Strategy: Your way to realize where you’re going
/!\ BUSINESS MODEL COMES FIRST!
Business Model vs. Business Plan
➢ Business model
o the architectural configuration of the components of transactions
designed to exploit business opportunities
➢ Business plan
o Describes a firm’s business model
o And the way towards it
2
,Standard business models
➢ Standard business models rely on well-established methods of value
creation and delivery. They are underpinned by repeatable structures
that align closely with Stabell and Fjeldstad's (1998) theory of value
configurations. According to this framework, firms create value
through one or more of three dominant logic types:
o VALUE CHAIN (PRODUCTION)
▪ Linear, sequential transformation of
inputs into outputs (e.g., Primark).
o VALUE SHOP (PROBLEM SOLVING)
▪ Customised services tailored to
client issues (e.g., management consulting).
o VALUE NETWORK (MEDIATION)
▪ Linkages between customers, as seen
in platforms (e.g., Vinted, Airbnb).
➢ These value creation logics map directly onto typical standard business
models:
o The manufacturer-retailer model follows a value chain logic.
o The freemium and subscription models often rely on value Commented [WS2]: Netflix/spotify
networks where user retention and engagement are key.
o The low-cost model succeeds through cost optimisation across the Commented [WS3]: e.g. Cola vs pepsi cola, lowering
value chain. their prices to attract more customers which didn’t
change the profit in the end
Disruptive models
➢ Disruptive models deviate sharply from existing norms. They typically
introduce a new configuration of value creation or a novel resource
combination, which aligns closely with Teece’s (2010) concept of
dynamic capabilities—the ability to sense opportunities, seize them,
and reconfigure resources.
➢ Disruption may occur through
o NOVEL PRICING STRATEGIES (e.g., freemium-to-subscription pivots) Commented [WS4]: Costs more to attract new
o DECENTRALISATION (blockchain-based platforms) customers (ads) instead of keeping existing customers,
try to keep them
o PROCESS INNOVATION (automation and AI integration)
o BUSINESS MODEL RECOMBINATION (combining elements from Commented [WS5]: Recombination of existing models
different archetypes)
3
, Organizational Development
➢ Plan that describes how the company will organize the
work that needs to be accomplished
o Work is typically divided into functional, geographical … Commented [WS6]: e.g. manager glasses: At first
departments worked 10hours, then 90h and now has over 50 people
under her
o Hiring moves from generalists to specialists as company grows
Commented [WS7]: e.g. Book keeper, if not hired you
o Coordination mechanisms (H.Mintzberg)
might go bankrupt
Note: Commented [WS8]: e.g. You’re in the army, boss gives
you orders, you execute them
supply triangle → COST – SERVICE – STOCKS
they’re compensating each other
Management
➢ Employees of the company responsible for making
the business model work
o Strong management team gives instant credibility to outside Commented [WS9]: Everyone always looks at the
investors management first before investing
o Strong management team may not be able to salvage a
weak business model but should be able to change the
model and redefine the business as it becomes necessary.
o Leadership Style, Motivation, …
Sea eagle: represents US, a predator, big claws, big speed and yet until couple of years ago
almost distinct → it’s business model didn’t work anymore (deforestation, pollution → hard to
find food), now eats garbage → different business model
→ better to have a less performing business model in the long run (so it keeps working)
LEITMOTIV ~ “A business model describes the rational of how an organization creates, delivers,
and captures value”
HOW? Business model generation
Book (business model generation)
→it’s written by ordinary people (not economics), designers, architects, ...
the feel of the book is different than from the economists
contribution instead of buying the book, then used this to publish it under his name, which
made him in charge (took most of the profit instead of publishing it with a company who would
give him less of the profits)
4
1. Designing Viable Business Models
Model
“a simplified description and representation of a complex entity or process”
➢ BUSINESS MODEL
o Describes the rationale of how an organization creates, delivers, and captures
value
o It’s like a blueprint for a strategy to be implemented through organizational
structures, processes, and systems
o It’s a conceptual tool containing a set of objects, concepts and their
relationships with the objective to express the business logic of a specific firm
o Therefore we must consider which concepts and relationship allow a
simplified description and representation of what value is provided to
customers, how this is done and with what financial consequences
/!\ know by heart
o A story of how a business works Commented [WS1]: People love stories, put it into a
▪ The method of doing business by which a revenue is generated story, make one
o Needs too pass two critical tests e.g. Glasses: ‘we were disgusted at having to pay 500 for
▪ Narrative test glasses so we make them for 100’
▪ Numbers test
o Think of business modelling as the managerial equivalent of the scientific
method: hypothesis → test in action → revise when necessary
o ‘A business model is nothing else than a representation of how an organization
makes (or intends to make) money’ ~ Peter Drucker
o At the end of the day, the business model should be condensed onto one page
o Three purposes a business model serves (Barringer and Ireland 2019)
1. CLARIFY THE VALUE PROPOSITION
• What problem does the firm solve? For whom? And how?
2. GUIDE RESOURCE ALLOCATION
• Which resources are essential, and how are they best deployed?
3. ARTICULATE A COHERENT STRATEGY
• How do the elements of the business model align to create and
sustain competitive advantage?
1
,Strategy vs. business model
➢ Strategy = business model?
o Business models describe, as a system, how the pieces of a
business fit together. But they don’t factor in one critical
dimension of performance: competition.
o Sooner or later—and it is usually sooner—every enterprise runs
into competitors. Dealing with that reality is strategy’s job. A
competitive strategy explains how you will do better than your
rivals.
o A firm’s strategy is deeply rooted in that particular firm’s
competitive environment.
➢ Which comes first: strategy or business model?
Note:
If you do something don’t focus on social media, especially if something already exists
because people will always compare it to the ‘original’.
Don’t think of your competition first and don’t copy too much, make it unique.
Create a buzz around your feature, a story, a narrative, use influencers to get people.
Mission: Why are we doing what we are doing? E.g. university: at first forming
executives for Dutch area, eventually evolved into KUL today
Vision: Where you’re going to
Strategy: Your way to realize where you’re going
/!\ BUSINESS MODEL COMES FIRST!
Business Model vs. Business Plan
➢ Business model
o the architectural configuration of the components of transactions
designed to exploit business opportunities
➢ Business plan
o Describes a firm’s business model
o And the way towards it
2
,Standard business models
➢ Standard business models rely on well-established methods of value
creation and delivery. They are underpinned by repeatable structures
that align closely with Stabell and Fjeldstad's (1998) theory of value
configurations. According to this framework, firms create value
through one or more of three dominant logic types:
o VALUE CHAIN (PRODUCTION)
▪ Linear, sequential transformation of
inputs into outputs (e.g., Primark).
o VALUE SHOP (PROBLEM SOLVING)
▪ Customised services tailored to
client issues (e.g., management consulting).
o VALUE NETWORK (MEDIATION)
▪ Linkages between customers, as seen
in platforms (e.g., Vinted, Airbnb).
➢ These value creation logics map directly onto typical standard business
models:
o The manufacturer-retailer model follows a value chain logic.
o The freemium and subscription models often rely on value Commented [WS2]: Netflix/spotify
networks where user retention and engagement are key.
o The low-cost model succeeds through cost optimisation across the Commented [WS3]: e.g. Cola vs pepsi cola, lowering
value chain. their prices to attract more customers which didn’t
change the profit in the end
Disruptive models
➢ Disruptive models deviate sharply from existing norms. They typically
introduce a new configuration of value creation or a novel resource
combination, which aligns closely with Teece’s (2010) concept of
dynamic capabilities—the ability to sense opportunities, seize them,
and reconfigure resources.
➢ Disruption may occur through
o NOVEL PRICING STRATEGIES (e.g., freemium-to-subscription pivots) Commented [WS4]: Costs more to attract new
o DECENTRALISATION (blockchain-based platforms) customers (ads) instead of keeping existing customers,
try to keep them
o PROCESS INNOVATION (automation and AI integration)
o BUSINESS MODEL RECOMBINATION (combining elements from Commented [WS5]: Recombination of existing models
different archetypes)
3
, Organizational Development
➢ Plan that describes how the company will organize the
work that needs to be accomplished
o Work is typically divided into functional, geographical … Commented [WS6]: e.g. manager glasses: At first
departments worked 10hours, then 90h and now has over 50 people
under her
o Hiring moves from generalists to specialists as company grows
Commented [WS7]: e.g. Book keeper, if not hired you
o Coordination mechanisms (H.Mintzberg)
might go bankrupt
Note: Commented [WS8]: e.g. You’re in the army, boss gives
you orders, you execute them
supply triangle → COST – SERVICE – STOCKS
they’re compensating each other
Management
➢ Employees of the company responsible for making
the business model work
o Strong management team gives instant credibility to outside Commented [WS9]: Everyone always looks at the
investors management first before investing
o Strong management team may not be able to salvage a
weak business model but should be able to change the
model and redefine the business as it becomes necessary.
o Leadership Style, Motivation, …
Sea eagle: represents US, a predator, big claws, big speed and yet until couple of years ago
almost distinct → it’s business model didn’t work anymore (deforestation, pollution → hard to
find food), now eats garbage → different business model
→ better to have a less performing business model in the long run (so it keeps working)
LEITMOTIV ~ “A business model describes the rational of how an organization creates, delivers,
and captures value”
HOW? Business model generation
Book (business model generation)
→it’s written by ordinary people (not economics), designers, architects, ...
the feel of the book is different than from the economists
contribution instead of buying the book, then used this to publish it under his name, which
made him in charge (took most of the profit instead of publishing it with a company who would
give him less of the profits)
4
