Business Models and Strategies

This flashcard set covers various business models, strategies, and related terminology based on the lecture notes.

Premium Price/Profit Model/Configuration

Price at a higher margin than competitors, usually for a superior product, offering, experience, service or brand.

Cost Leadership/Profit Model/Configuration

Keep variable costs low and sell high volumes at low prices.

Scaled Transactions/Profit Model/Configuration

Maximize margins by pursuing high volume, large scale transactions when unit costs are relatively fixed.

Microtransactions/Profit Model/Configuration

Sell many items for as little as a dollar—or even only one cent—to drive impulse purchases at volume.

Forced Scarcity/Profit Model/Configuration

Limit the supply of offerings available, by quantity, time frame or access, to drive up demand and/or prices.

Subscription/Profit Model/Configuration

Charging customers up front for access to a product or service over time.

Membership/Profit Model/Configuration

Charge a time-based payment to permit access to locations, offerings, or services that non-members don’t have.

Installed Base/Profit Model/Configuration

Offer a “core” product for slim margins (or even a loss) to drive demand and loyalty; then realize profit on additional products and services.

Switchboard/Profit Model/Configuration

Connect multiple sellers with multiple buyers; the more buyers and sellers who join, the more valuable the switchboard.

Auction/Profit Model/Configuration

Allow a market—and its users—to set the price for goods and services.

Try Before You Buy/Service/Experience

Let customers test and experience an offering before investing in it.

Guarantee/Service/Experience

Remove customer risk of lost money or time stemming from product failure or purchase error.

Loyalty Programs/Service/Experience

Provide benefits and/or discounts to frequent and high-value customers.

Added Value/Service/Experience

Include an additional service/function as part of the base price

Concierge/Service/Experience

Provide premium service by taking on tasks for which customers don’t have time.

Total Experience Management/Service/Experience

Provide thoughtful, holistic management of the consumer experience across an offering’s lifecycle.

Supplementary Service/Service/Experience

Offer ancillary services that fit with your offering.

Superior Service/Service/Experience

Provide service(s) of higher quality, efficacy, or with a better experience than any competitor

Personalized Service/Service/Experience

Use the customer’s own information to provide perfectly calibrated service.

User Communities/Support Systems/Service/Experience

Provide a communal resource for product/service support, use and extension.

Lease or Loan/Service/Experience

Let customers pay over time to lower upfront costs.

Self-Service/Service/Experience

Provide users with control over activities that would otherwise require an intermediary to complete.

User-Defined/Profit Model/Configuration

Invite customers to set a price they wish to pay.

Freemium/Profit Model/Configuration

Offer basic services for free, while charging a premium for advanced or special features

Flexible Pricing/Profit Model/Configuration

Vary prices for an offering based on demand.

Float/Profit Model/Configuration

Receive payment prior to building the offering—and use the cash to earn interest prior to making margins.

Financing/Profit Model/Configuration

Capture revenue not directly from the sale of a product, but from structured payment plans and after-sale interest.

Ad-Supported/Profit Model/Configuration

Provide content/servicesfor free to one party whileselling listeners, viewers or “eyeballs” to another party.

Licensing/Profit Model/Configuration

Grant permission to some other group or individual to use your offering in adefined way for a specified payment.

Metered Use/Profit Model/Configuration

Allow customers to pay for only what they use.

Bundled Pricing/Profit Model/Configuration

Sell in a single transaction two or more items that could be sold as standalone offerings.

Disaggregate Pricing/Profit Model/Configuration

Allow customers to buy exactly—and only—what they want.

Risk Sharing/Profit Model/Configuration

Waive standard fees/costs if certain metrics aren’t achieved, but receive outsize gains when they are.

Merger/Acquisition/Network/Configuration

Combine two or more entities to gain access to capabilities and assets.

Consolidation/Network/Configuration

Acquire multiple companies in the same market or complementary markets.

Open Innovation/Network/Configuration

Obtain access to processes or patents from other companies to leverage, extend, and build on expertise and/or do the same with internal IP and processes.

Secondary Markets/Network/Configuration

Connect waste streams, by-products, or other alternative offerings to those who want them.

Supply Chain Integration/Network/Configuration

Coordinate and integrate information and/or processes across a company or functions of the supply chain.

Complementary Partnering/Network/Configuration

Leverage assets by sharing them with companies that serve similar markets but offer different products and services.

Alliances/Network/Configuration

Share risks and revenues to jointly improve individual competitive advantage.

Franchising/Network/Configuration

License business principles, processes, and brand to paying partners.

Coopetition/Network/Configuration

Join forces with someone who would normally be your competitor to achieve a common goal.

Collaboration/Network/Configuration

Partner with others for mutual benefit.

Organizational Design/Structure/Configuration

Make form follow function and align infrastructure with core qualities and business processes.

Incentive Systems/Structure/Configuration

Offer rewards (financial or non-financial) to provide motivation for a particular course of action.

IT Integration/Structure/Configuration

Integrate technology resources and applications.

Competency Center/Structure/Configuration

Cluster resources, practices, and expertise into support centers that increase efficiency and effectiveness across the broader organization.

Outsourcing/Structure/Configuration

Assign responsibility for developing or maintaining a system to a vendor.

Corporate University/Structure/Configuration

Provide job-specific or company-specific training for managers.

Decentralized Management/Structure/Configuration

Distribute decision-making governance closer to the customer or other key business interfaces.

Knowledge Management/Structure/Configuration

Share relevant information internally to reduce redundancy and improve job performance.

Asset Standardization/Structure/Configuration

Reduce operating costs and increase connectivity and modularity by standardizing your assets.

Process Standardization/Structure/Configuration

Use common products, processes, procedures, and policies to reduce complexity, costs, and errors.

Localization/Structure/Configuration

Adapt an offering, process, or experience to target a culture or region.

Process Efficiency/Structure/Configuration

Create or produce more while using fewer resources—measured in materials, energy consumption or time.

Flexible Manufacturing/Structure/Configuration

Use a production system that can rapidly react to changes and still operate efficiently.

Process Automation/Structure/Configuration

Apply tools and infrastructure to manage routine activities in order to free up employees.

Crowdsourcing/Structure/Configuration

Outsource repetitive or challenging work to a large group of semi-organized individuals.

On-Demand Production/Process/Configuration

Produce items after an order has been received to avoid carrying costs of inventory.

Lean Production/Structure/Configuration

Reduce waste and cost in your manufacturing process and other operations.

Logistics Systems/Structure/Configuration

Manage the flow of goods, information and other resources between the point of origin and the point of use.

Strategic Design/Structure/Configuration

Employ a purposeful approach that manifests itself consistently across offerings, brands, and experiences.

Intellectual Property/Structure/Configuration

Protect an idea that has commercial value—such as a recipe or industrial process—with legal tools like patents.

User Generated/Structure/Configuration

Put your users to work in creating and curating content that powers your offerings.

Predictive Analytics/Structure/Configuration

Model past performance data and predict future outcomes to design and price offerings accordingly.

Superior Product/Product Performance/Offering

Develop an offering of exceptional design, quality, and/or experience.

Ease of Use/Product Performance/Offering

Make your product simple, intuitive and comfortable to use.

Engaging Functionality/Product Performance/Offering

Provide an unexpected or newsworthy experiential component that elevates the customer interaction.

Safety/Product Performance/Offering

Increase the customer’s level of confidence and security.

Feature Aggregation/Product Performance/Offering

Combine existing features found across offerings into a single offering.

Added Functionality/Product Performance/Offering

Add new functionality to an existing offering.

Performance Simplification/Product Performance/Offering

Omit superfluous details, features, and interactions to reduce complexity.

Environmental Sensitivity/Product Performance/Offering

Provide offerings that do no harm—or relatively less harm—to the environment.

Conservation/Product Performance/Offering

Design your product so that customers can reduce their use of energy or materials.

Customization/Product Performance/Offering

Enable altering of the product or service to suit individual requirements or specifications.

Focus/Product Performance/Offering

Design an offering specifically for a particular audience at the expense of others.

Styling/Product Performance/Offering

Impart a style, fashion or image.

Complements/Product System/Offering

Sell additional related or ancillary products or services to a customer.

Extensions/Plug-ins/Product System/Offering

Allow first- or third-party additions that add functionality.

Product Bundling/Product System/Offering

Offer several products for sale as one combined product.

Modular Systems/Product System/Offering

Provide a set of individual components that can be used independently, but gain utility when combined.

Product/Service Platforms/Product System/Offering

Develop systems that connect with other, partner products and services to create a holistic offering.

Integrated Offering/Product System/Offering

Combine otherwise discrete components into a complete experience.

Diversification/Channel/Experience

Add and expand into new or different channels.

Flagship Store/Channel/Experience

Create a store to showcase quintessential brand and product attributes.

Go Direct/Channel/Experience

Skip traditional retail channels and connect directly with customers.

Non-Traditional Channels/Channel/Experience

Employ novel and relevant avenues to reach customers.

Pop-up Presence/Channel/Experience

Create a noteworthy but temporary environment to showcase and/or sell offerings.

Indirect Distribution/Channel/Experience

Use others as resellers who take ownership over delivering the offering to the final user.

Multi-Level Marketing/Channel/Experience

Sell bulk or packaged goods to an affiliated but independent sales force that turns around and sells it for you.

Cross-selling/Channel/Experience

Place products, services, or information that will enhance an experience in situations where customers are likely to want to access them.

On-Demand/Channel/Experience

Deliver goods in real-time whenever or wherever they are desired.

Context Specific/Channel/Experience

Offer timely access to goods that are appropriate for a specific location, occasion, or situation.

Experience Center/Channel/Experience

Create a space that encourages your customers to interact with your offerings—but purchase them through a different (and often lower-cost) channel.

Co-Branding/Brand/Experience

Combine brands to mutually reinforce key attributes or enhance the credibility of an offering.

Brand Leverage/Brand/Experience

“Lend” your credibility and allow others to use your name—thus extending your brand’s reach.

Private Label/Brand/Experience

Provide goods made by others under your company’s brand.

Brand Extension/Brand/Experience

Offer a new product or service under the umbrella of an existing brand.

Component Branding/Brand/Experience

Brand an integral component to make a final offering appear more valuable.

Transparency/Brand/Experience

Let customers see into your operations and participate with your brand and offerings.