55 Business Models- to revolutionize your business

The 55 Business Models includes the representation of the 55 business patterns described by Oliver
Gassman, Karolin Frankenberger and Michaela Csik in the Business Model Navigator book.

If you want to organize a business model workshop, or just want to do a brainstorming, the BMI
Pattern Cards are a handy tool. The cards contain all 55 business model patterns plus five new
patterns with a brief description, illustration and some examples of companies that successfully
applied the pattern. They also provide enough information to understand each concept fully.

1. ADD-ON:
Extra Offerings that drive up the final price.
Customer end up paying more, from what he or she initially thought of.

2. AFFILIATION:
Benefits from Wider Market

3. AIKIDO:
New offering as compared to competitor
New offerings attracts customers who prefer something against mainstream

4. AUCTION:
Sale by bidding
Highest possible price

5. BARTER:
Transactions without actual money
Customer provides something valuable in return

6. CASH MACHINE:
Increases liquidity

7. CROSS SELLING:
Extra offerings by increased revenues and thereby more profits

8. CROWD-FUNDING:
Underlying business ideas get support from investor

9. CROWD-SOURCING:
Solution to a problem faced through anonymous crowds
A small reward is usually associated if a person’s solution is adopted by the company
to solve the problem faced by the company.

10. CUSTOMER LOYALTY:

Retain customers by providing values that are beyond the actual product offerings
 Creates an emotional bond

11. DIGITIZATION:
Ease of distribution, through digital platforms

12. DIRECT SELLING:

No middleman, Savings on commissions

13. E-COMMERCE:
Cost effective measure to remove middleman and strengthen operational efficiency

14. EXPERIENCE SELLING:

Charging for experience offered along with the products
Higher profits and gains

15.FLAT RATE:
Time and efforts saving

16. FRACTIONAL OWNERSHIP: –

Capital intensive asset is shared amongst group of owners.
Cost saving measure

17. FRANCHISING:
The business which owns the brand name, products licenses them to independent
franchises who carry the risk of local operations and the business generates revenue
from a part of the revenue of the franchisee.

18. FREEMIUM:
Basic version for free
And later creating a demand for premium version to create revenues

19. FROM PUSH-TO-PULL:

Operational ease to put Customer at centre.

20. GURANTEED AVAILABILITY:

The business guarantees that the product will be available at any given point of time
which reduces the losses that a customer might have to bear because of the
downtime involved in the buying process.

21. HIDDEN REVENUE:

Major Revenues from third party

22. INGREDIENT BRANDING:

The business uses a branded ingredient from a supplier and uses it to manufacture
its own product. The product is then advertised along with the branded ingredient to
attract more consumers.

23. INTEGRATOR:
 An integrator is in command of the bulk of steps in a value-adding process. The
control off al resources in terms of value creation lies with the company.

24. LAYER PLAYER:

A layer player is a specialized company and is limited to providing one step in the
value-adding process for value chains of different organisations. The layer player can
benefit from economies of scale.

25. LEVERAGE CUSTOMER DATA:

Value is created by collecting customer data and preparing it in beneficial ways either
for own usage or to sell it to interested third parties.

26. LICENSE:
The business focuses on developing intellectual property that can be licensed to
other manufacturers in exchange of licensing fees to generate revenue.

27. LOCK-IN:
The business locks in the customers in its own world and switching to another
business would involve substantial switching cost for the customer.

28. LONG TAIL:

Instead of focusing on a single large product, the business focuses on several small
niche products. These products when put together create demand which is more
than the blockbuster product.

29. MAKE MORE OF IT:

The business model ensures that there are no slack resources and if any, such
resources are either used to create additional products for the organisation or to
produce for other organisations.

30. MASS CUSTOMIZATION:

The business models integrates mass manufacturing with customization of products
which earlier seemed to be an impossible task. The focus of the business is on
production systems that enable individualisation of products.

31. NO FRILLS:
Value creation focuses on what is necessary to deliver the core value proposition
which is as basic as possible. The cost saving is shared between the organisation and
the customers.

32. OPEN BUISNESS MODEL:

In this business model, an organisation collaborates with the partners in the
ecosystem and it becomes a central source of value creation.

33. OPEN SOURCE:

Others can contribute to the product, but also use it for free as a sole user. Money is
usually earned by services that are complementary with the product.
34. ORCHESTRATOR:
The business focuses on the core competencies in the value chain and other
segments of the value chain are outsourced.

35. PAY PER USE:

In this business model the customer usage is monitored, and any user must pay only
for how much or for how long he or she uses the product.

36. PAY WHAT YOU WANT:

The buyer is free to any price he or she wants to pay for a product which might even
be zero. Usually the business sets a floor price in this business model.

37. PEER-TO-PEER:
The company offers a meeting point between two customers to exchange products
or services and only acts as a mediator between the two consumers.

38. PERFORMANCE BASED CONTRACTING:

The price of a good or service is not derived based on the physical value of the
product but on the outcome it delivers for the user.

39. RAZOR AND BLADE:

The basic product is given away for free or for a low price, but the products needed
to operate the basic good are expensive and sold at a high margin.

40. RENT INSTEAD OF BUY:

Instead of buying the product, the customer has an option to rent the product for
the time period for which it is needed. It reduces the capital required to access the
product.

41. REVENUE SHARING:

The business shares the revenue generated with the stakeholders of the company.

42. REVERSE ENGINEERING:

New products are developed by obtaining the competitor’s product, taking it apart,
gaining knowledge from it and using it to design a similar product.

43. REVERSE INNOVATION:

The process involves developing products in industrial nations and adapting them to
meet the need of emerging markets.

44. ROBIN HOOD:

In this business model, the organisation offers the same product to the rich at a
much higher price than the poor and the bulk of the profit is generated by servicing
the rich segment of the society.

45. SELF-SERVICE:
 The business transfers a part of the value creation process to the customers in
exchange for a lower price of the product. These steps usually add little to the value
obtained by the customer but incurs a huge cost or the business.

46. SHOP-IN-SHOP:
Instead of opening new branches, the organisation ties up with other businesses and
sets up their offerings in the stores of other businesses in a way that imitates a small
shop within another shop so that it results in a win-win situation.

47. SOLUTION PROVIDER:

A solution provider offers total coverage of products and services in a particular
domain and the customer needs to contact a single person for any need in that
particular domain.

48. SUBSCRIPTION:
The customer has to pay a regular fee on a monthly or annual basis for continued
use of product or service. The business is able to generate a steady stream of
income.

49. SUPER-MARKET:
In this business model an organisation sells a number of products under a single
roof. The assortment of the products is high but the prices are generally kept low.

50. TARGET THE POOR:

The business instead of targeting the rich, targets the customers at the base of the
pyramid. The customers with low purchasing power are able to benefit from the low
price of goods and the organisation earns a small margin of profit compensated by
the large sales numbers.

51. TRASH-TO-CASH:
In this business models, the organisation collects used products which are sold in
other countries or transformed into new products. The scheme is based on low-to-no
purchase prices.

52. TWO-SIDED MARKET:

It facilitates interactions between multiple independent groups of customers. The
value of platform increases as more groups or more individual members of a group
are using it.

53. ULTIMATE LUXURY:

The focus of the business is on the top of the pyramid which comprises of the upper
section of the society. This allows a company to distinguish its products or services
greatly from others and they are able to charge a premium for the same.

54. USER DESIGNED:

The business model benefits from the creativity of the consumer and the consumer is
both, the manufacturer and the consumer. The business provides a platform for the
 consumer to design the products and the consumer benefits from not having to
obtain the required entrepreneurial resources to implement their ideas.

55. WHITE LABEL:

A white label producer allows other companies to distribute its goods under their
own brand name, so it appears that the products are made by them. The same
product is usually sold by different businesses under different brands which allows
various segments of the population to be satisfied by the same product.

The Stages of Implementation of Business Model

Innovation
A business model is made of-:

1. Who? -: Who is your target customer segment?

2. What? -: What do you offer to your customer? [Customer Value Proposition]

3. How? -: How do you create value? [Value Chain]

4. Value? -: How do you generate revenue [Revenue Model]

These are the four stages of Implementation of a Business Model-:

1. Initiation-: In this process, we analyse our current business model and get to know our
customers and the benefits we are providing, etc.
This process involves the following steps

⮚ What is the problem?

⮚ Where is it happening?
⮚ When is it happening?
⮚ How can we overcome the problem?
⮚ When do we need to get involved?
⮚ How do we know when the problem is fixed?

2. Ideation-: This process involves the following steps

⮚ Analyse the current business model with the existing 55 business model patterns and
develop newer business models.
⮚ We challenge our basic assumptions and the dominant common sense of our
company and never try to Re-Invent the wheel.
⮚ We need to know what can be learned, copied and adapted from other business
models into our own business model.
3. Integration-: In this step, we need to check the consistency of the current business
model and should examine all four questions regarding organizational fit. Here we integrate
all pieces of the new business model into the company keeping in mind all the four
dimensions(who, what, how, why).Here the challenge is to the integration of partners into
the design of the concrete new business model, and it can only work of all involved
stakeholders support it and adjust their business models accordingly.

4. Implementation-: During implementation, now it’s the moment when we have to

awaken the beast and take care of the steps we take. In iterative cycles, we design a
business model, develop a point, examine our point, and return to the design phase. It is
important to gain qualitative and quantitative data to confirm or fix our assumption about
our new business model but also not forget about the soft factor of innovation.

Due to incorrect management’s behaviours and organizational resistance, more than 70% of
all transformative plans be unsuccessful. So, we should keep the few rules in mind-:

⮚ At one time, only implement only one business model.

⮚ Evidently communicate the new business model and the need for change.
⮚ Don’t overemphasize short term KPI’s as modernism requires time.
⮚ We should have the commitment of top management as without their sponsorship
business model is doomed to fail.
⮚ Overcome the not invented here syndrome.