Center for Educational Leadership Entrepreneurship and Financial Literacy Training

Competitive Advantage & Business Models “A company gains a competitive advantage by providing a product or service in a way that customers value more than the competition.”“A company gains a competitive advantage by providing a product or service in a way that customers value more than the competition.”

Competitive Advantage & Business Models What is a business Model?What is a business Model? “A long-term competitive strategy whose business design differentiates that enterprise from it’s competition and seeks to obtain an industry-wide competitive advantage and market dominance”.

Competitive Advantage & Business Models Achieving a business modelAchieving a business model –The purpose is to provide direction, concentration of effort, consistency of purpose, and flexibility as a business strives to improve its competitive position –Business must respond to perceived external opportunities and threats –A business must understand it’s strengths and weaknesses –Allocate what ever resources necessary to meet those challenges –The end-game is to obtain a long-term sustainable competitive advantage

Business Model Market ModelMarket Model –Promotion –Brand –Niche –Demographic –Lifestyle –Geographic –Personal –Business Operations Model –Customer Service –Convenience –Pricing –Customization –Intermediation –Business Process –Richness in Content

Business Model Revenue ModelRevenue Model –Product SuperioritySuperiority Pricing (Price Points)Pricing (Price Points) AvailabilityAvailability –Service Customer CentricCustomer Centric CustomizationCustomization Product InformationProduct Information Technical SupportTechnical Support Revenue Model –Payment Structure Membership Subscription Commissions Reoccurring Payment Credit Payment Hard Cash only! Innovation Model –Product –Technology –Marketing –Organization

Organizational Strengths are internal skills and capabilities that enable an organization to conceive of and implement its strategiesOrganizational Strengths are internal skills and capabilities that enable an organization to conceive of and implement its strategies Organizational Weaknesses are internal skills and capabilities that do not enable an organization to choose and implement strategies that support its business modelOrganizational Weaknesses are internal skills and capabilities that do not enable an organization to choose and implement strategies that support its business model Organization Opportunities are external areas that may generate higher performanceOrganization Opportunities are external areas that may generate higher performance Organizational threats are external areas that increase the difficulty of an organization’s performing at a high level.Organizational threats are external areas that increase the difficulty of an organization’s performing at a high level. Business Model SWOT Analysis

Business Model An Organizations fundamental purpose or design SWOT Analysis To formulate strategies that support the business model Internal Analysis External Analysis Strengths Opportunities Weaknesses Threats Good Strategies Exploit Opportunities and Strengths Neutralize threats and avoid weaknesses Business Model