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Business Models And Strategic
Management Framework
Part 2
Lectured By
Dr. Zar Ni Maw Win
Lectured by Dr. Zar Ni Maw Win 1
6/2/2022

Contents
✓Business Models
✓From Old to New Business Models
✓Business Policy
✓Strategy management framework
✓Benefits of Strategic Management
✓Why Some Firms Do No Strategic Planning
6/2/2022

Learning Objectives
1. Describe the basic components of Business and Strategic Management Models.
2. Discuss the benefits of strategic management.
6/2/2022

Business Models
A business model is a
company’s method for making
money in the current business
environment. It includes the key
structural and operational
characteristics of a firm—how it
earns revenue and makes a profit.
6/2/2022 Lectured by Dr. Zar Ni Maw Win 4
Who it serves
What it provides
How it makes money
How it differentiates
and sustains
competitive advantage
How it provides its
product/service

Business Model
• A business model is managers’ conception of how the set of strategies
their company pursues should work together as a congruent whole,
enabling the company to gain a competitive advantage and achieve
superior profitability and profit growth.
• A business model is a kind of mental model, or gestalt, of how the
various strategies and capital investments a company makes should fit
together to generate above-average profitability and profit growth.

From Old to New Business Models

Business Models
1. Customer solutions model
2. Profit pyramid model
3. Multicomponent
system/installed base model
4. Advertising model
5. Switchboard model
6. Time model
7. Efficiency model
8. Blockbuster model
9. Profit multiplier model
10. Entrepreneurial model
11. De facto industry standard
model & etc.

A business model encompasses the totality of how a company
will: 1. Select its customers.
2. Define and differentiate its product offerings.
3. Create value for its customers.
4. Acquire and keep customers.
5. Produce goods or services.
6. Lower costs.
7. Deliver goods and services to the market.
8. Organize activities within the company.
9. Configure its resources.
10. Achieve and sustain a high level of profitability.
11. Grow the business over time.

Strategy Management Framework/Model

Strategic Management Model or Framework

Strategic Management Process
Source: Stephen P. Robbins, Mary A. Coulter, 2009. Management
6/2/2022

Benefits of Strategic Management
Financial Benefits & Nonfinancial Benefits

Why Some Firms Do No Strategic Planning
1. Lack of knowledge or experience in strategic planning.
2. Poor reward structures
3. Firefighting
4. Waste of time
5. Too expensive
6. Laziness

The Three Tests of a Winning Strategy
1. How well does the strategy fit the company’s situation?
2. Is the strategy helping the company achieve a sustainable competitive
advantage?
3. Is the strategy producing good company performance?

Competitive Advantage
A company is said to have a competitive advantage over its rivals when its
profitability is greater than the average profitability and profit growth of
other companies competing for the same set of customers.

Competitive Advantage
The higher its profitability relative to rivals, the greater its competitive
advantage will be.
A company has a sustained competitive advantage when its strategies
enable it to maintain above-average profitability for a number of years.
E.g. Wal-Mart had a significant and sustained competitive advantage over rivals such as
Target, Costco, and K-Mart for most of the last two decades.

A Model of the Strategic Planning Process
The formal strategic planning process has five main steps:
1. Select the corporate mission and major corporate goals.
2. Analyze the organization‘s external competitive environment to
identify opportunities and threats.

A Model of the Strategic Planning Process
The formal strategic planning process has five main steps:
3. Analyze the organization‘s internal operating environment to identify the
organization‘s strengths and weaknesses.
4. Select strategies that build on the organization‘s strengths and correct its
weaknesses in order to take advantage of external opportunities and counter
external threats. These strategies should be consistent with the mission and
major goals of the organization. They should be congruent and constitute a
viable business model.
5. Implement the strategies.

Business Model Analysis
1. The BLACKBERRY – SWOT analysis
The BlackBerry is a desirable product for business executives. Why?
2. COCA-COLA – number one brand
Does Coca-Cola only produce its famous drink or has it diversified?
3. McDONALD’S – successful franchising
The company uses a successful franchise model. How?
4. GOOGLE – how to make a profit
Google’s annual revenue is over $8 billion. How does it make money?
5. SWATCH – business timing
How did Swatch become a global brand?

Business Model Analysis
6. KODAK – business mistakes
Kodak made a serious business mistake. Can it survive?
7. YOUTUBE – new business
Why is YouTube so popular and is it making any money?
8. DELL – customer service
Dell is the biggest PC seller in the world. Why is it a success?
9. The BODY SHOP – women in business
Anita Roddick founded The Body Shop with $6000. How?
10. NINTENDO Wii – product innovation
Is the Nintendo Wii a great innovation?

Discussion & Question
6/2/2022
THANK YOU

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Business Models.pdf

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Business Models.pdf