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The Seven Dimensions of a a Business Model

May 6, 2008
Business models contain seven dimensions that define how well your organization is positioned to serve customers and defeat the competition. Here is the list:

1. "Who?" defines all the stakeholders you are serving or affecting.

2. "What?" describes the offerings and their benefits and negative influences that affect each stakeholder.

3. "When?" captures the timing of offerings' effects on stakeholders.

4. "Where?" identifies the location for delivering the benefits and other impacts.

5. "Why?" gives the rationale for providing the stakeholder benefits you deliver.

6. "How?" explains your method of providing your offerings and being compensated for them.

7. "How much?" states the price customers and users pay and incur.

Why is it important to know what these seven dimensions are? By examining these areas, organizations will be able to focus on places where important benefits may be added.

Continuing business model innovation is the most valuable activity that any enterprise an engage in. But it's a problem for most leaders to take on this task. Why? They've never see anyone do it, and they have no personal experience.

To help overcome that problem, let's look at the key elements that such a process requires. With this template in mind, some leaders will be able to design and engage in the appropriate activities for continuing business model innovation.

Here are the four elements in continuing business model innovation:

1. Understand and follow the current business model well. -- Employ the optimum way that goods and services should be supplied now, by informing all stakeholders about what needs to be done to deliver the most benefits.

2. Understand and install the next business model. -- Specify the next innovation to provide more stakeholder benefits through goods and services and how the transition will occur.

3. Understand and use a business model innovation vision. -- The ideal benefits to deliver to stakeholders in your industry, which is used to test the appropriateness of developing future generations of potential business model innovations.

4. Ongoing design and testing of business model innovations. -- Vision-defined probes and tests to elicit reactions to providing new benefits and various ways of supplying them.

A more valuable approach to continuing business model innovation also describes more than one future generation of innovations in terms of the second element.

For each of the first three elements of continuing business model innovations, you need to identify seven key dimensions -- the who, what, when, where, why, how, and how much -- viewed from the perspective of all direct and indirect stakeholders. Their combination defines either a business model or a business model innovation vision.

With these perspectives in mind, there's no reason why you can't be developed advantaged business models as often as you need them.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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