I’ve been thinking …

I don’t think that any two authors have defined or described the term business model in quite the same way. However I happily discovered a particularly cogent description in Joan Magretta’s book What Management IS … How it works and why it’s everyone’s business. 

Here’s how she presented her definition:

A business model is a story of how the enterprise works.

  • It is a set of assumptions about how the organization performs by creating value for all of its stakeholders
  • It is a theory that is constantly being tested in the marketplace
  • It reflects a systems thinking approach to the organization

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers
Although the creators of the popular business model canvas do not articulate their definition as clearly, I think that the canvas is well-supported by Magretta’s definition.

What do you think?

Until tomorrow, GUNG Ho friends!