The 60 Business Model Patterns You Need To Know [Infographic]
In this article, we cover the Business Model Navigator Methodology, which in my opinion is among the most effective way to craft a business model. The BMI Lab gave us the opportunity to feature all the Business Model Navigator Patterns identified by the research of Oliver Gassmann, Karolin Frankenberger, and Michaela Csik.
All the materials and resources suggested are not linked to affiliations. I don’t earn anything from those suggestions, and I decided to feature the Business Model Navigator Methodology because I think it is an extremely valuable framework for anyone interested in business modeling.
Related: What Is a Business Model? 30 Successful Types of Business Models You Need to Know
Why is business modeling such a hot topic?
Business modeling has become a critical topic which rose of interest in the late 90s, until it became ubiquitous, after the rise of digital businesses and the dot-com era:
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How the terms “business model” and “business models” grew exponentially after the 1990s
The reason business modeling has become such a popular topic is that with the rise of tech companies and digitalization, a competitive advantage isn’t captured anymore with product and processes.
Instead, the ability to assemble a unique business model has become a key element.
In this article, we’ll take into account the Business Model Navigator methodology developed by Oliver Gassmann, Karolin Frankenberger, and Michaela Csik.
Indeed as explained in “What is a business model?” there is a single way to assess, understand and describe a business. There are several methodologies, each with a set of assumptions about the critical components of any business. Among those on FourWeekMBA, we covered:
Business Model Canvas
Lean Startup Canvas
Value Proposition Canvas
Blitzscaling Business Model Innovation Canvas
Growth Hacking Canvas
Each of those tools is quite useful from several standpoints. For instance, a business model canvas is an excellent place to start to have a complete framework of any business by looking at components such as key customers, partners, channels, and so on.
The lean startup canvas is a variation of business model canvas, based on the concept of lean startup and it is a good starting point for smaller businesses and startups.
Instead, a framework and tool like Blitzscaling canvas (I created this canvas by starting from the Blitzscaling book) is an excellent place to start if you need to assess whether your company or startup has all the key ingredients to scale up.
We’ll focus now on the business model navigator, which I found among the most effective tools to dissect any business, given its simplicity and effectiveness.
What’s a business model according to the Business Model Navigator Methodology?
What is precisely a business model? There isn’t a single definition of business modeling.
As pointed out by Oliver Gassmann, Karolin Frankenberger, Michaela Csik in The St. Gallen Business Model Navigator:
The business model can be defined as a unit of analysis to describe how the business of a firm works
In short, a business model is how the different bits and pieces of a company come together to form a whole, a sort of organism, which grows, survive and thrive in the marketplace.
Therefore, as defined in the book Business Model Navigator “a business model provides a holistic picture of how a company creates and capture value.”
The Business Model Navigator Methodology
The Business Model Navigator Methodology uses a simple framework to dissect a business model which looks at who, what, how and why of a business.
Those four dimensions allow you to map any company’s business model by having a complete picture of its engine. For instance:
The Who focuses on understanding the target customer.
The What helps to map the value proposition or the products and services offered and how they compel your target customers
The How defines the value chain or the set of activities the company undertakes to execute the value proposition
And the Why is about financial viability and how the company can balance between cost structure and revenue generation to achieve profitability
What is a business model pattern?
A business model pattern is a blueprint to creating new ideas and achieve business model innovation as a mean to create a lasting competitive advantage.
The BMI Lab gave us the opportunity to feature all the 60 Business Model Navigator Patterns identified by the research of Oliver Gassmann, Karolin Frankenberger, and Michaela Csik:
ADD-ON
AFFILIATION
AIKIDO
AUCTION
BARTER
CASH MACHINE
CROSS SELLING
CROWDFUNDING
CROWDSOURCING
CUSTOMER LOYALTY
DIGITIZATION
DIRECT SELLING
E-COMMERCE
EXPERIENCE SELLING
FLAT RATE
FRACTIONAL OWNERSHIP
FRANCHISING
FREEMIUM
FROM PUSHTO-PULL
GUARANTEED AVAILABILITY
HIDDEN REVENUE
INGREDIENT BRANDING
INTEGRATOR
LAYER PLAYER
LEVERAGE CUSTOMER DATA
LICENSE
LOCK-IN
LONG TAIL
MAKE MORE OF IT
MASS CUSTOMIZATION
NO FRILLS
OPEN BUSINESS MODEL
OPEN SOURCE
ORCHESTRATOR
PAY PER USE
PAY WHAT YOU WANT
PEER-TO-PEER
PERFORMANCE-BASED CONTRACTING
RAZOR AND BLADE
RENT INSTEAD OF BUY
REVENUE SHARING
REVERSE ENGINEERING
REVERSE INNOVATION
ROBINHOOD
SELF-SERVICE
SHOP-IN SHOP
SOLUTION PROVIDER
SUBSCRIPTION
SUPERMARKET
TARGET THE POOR
TRASH-TO CASH
TWO-SIDED MARKET
ULTIMATE LUXURY
USER DESIGNED
WHITE LABEL
SENSOR AS A SERVICE
VIRTUALIZATION
OBJECT SELF-SERVICE
OBJECT AS POINT OF SALE
PROSUMER
Key takeaway
A business model is a holistic picture of a business and how its bits and pieces come together to form a whole, that becomes a financially viable organization able to serve a target audience, through a value proposition executed via a value chain. While there are several tools, frameworks and methodologies to assess a business model, the Business Model Navigation Methodology by Oliver Gassmann, Karolin Frankenberger, and Michaela Csik from BMI Lab is – in my opinion – among the most valuable methodologies to assess any business model.
One common denominator is innovation and how business modeling can help you build a lasting competitive advantage for our business!
Suggested reading: The Business Model Navigator
I suggest you read the book if you want to have a deep understanding of the topic and the framework we discussed:
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Resources for your business:
What Is a Business Model? 30 Successful Types of Business Models You Need to Know
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
How to Write a One-Page Business Plan
What Is Business Development? The Complete Guide To Business Development
Handpicked popular case studies from the site:
The Power of Google Business Model in a Nutshell
How Does Google Make Money? It’s Not Just Advertising!
How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
How Amazon Makes Money: Amazon Business Model in a Nutshell
How Does Netflix Make Money? Netflix Business Model Explained
How Does Spotify Make Money? Spotify Business Model In A Nutshell
The Trillion Dollar Company: Apple Business Model In A Nutshell
DuckDuckGo: The [Former] Solopreneur That Is Beating Google at Its Game
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