Crafting a Robust Business Model
Strategy Guide
Overview
Introduction
A business model is the foundation of an organisation’s success. It determines how value is created, delivered, and captured, ensuring sustainability and long-term profitability.
A strategy without a viable business model is ineffective – while strategy provides direction, the business model defines how the organisation operates to achieve that strategy.
This guide explores business models in strategy execution, structuring with the Business Model Canvas, and building scalable, resilient models.
Want to Read More About Target Operating Models?
Table of Contents
In this guide you will learn about:
Why Business Models Matter
Key benefits of a well-defined business model:
Revenue Stability
Clear monetisation strategies ensure predictable income.
Scalability
A structured model allows for growth without operational chaos.
Competitive Differentiation
Unique business models create market advantages.
Risk Mitigation
Identifying cost structures and dependencies improves resilience.
Example:
Uber’s initial strategy was to disrupt the taxi industry. However, its commission-based business model with minimal asset ownership made the company scalable and financially sustainable.
Business Model Frameworks
The Business Model Canvas (BMC)
Customer Segments
Who are the target customers?
Value Proposition
What unique value does the company provide?
Channels
How do customers access the products/services?
Customer Relationships
How does the business interact with customers?
Revenue Streams
How does the company generate income?
Key Resources
What assets are essential for success?
Key Activities
What operational tasks drive success?
Key Partnerships
What external relationships enhance operations?
Cost Structure
What are the major expenses?
Example:
Netflix analysed digital streaming trends and pivoted from DVD rentals to an online subscription model, transforming the business.
Lean Startup Model
Minimum Viable Product (MVP)
Release a basic version to test assumptions
Build-Measure-Learn Cycle
Iterate based on real-world feedback
Pivoting Strategy
Adapt the model if initial hypotheses fail
Example:
Slack pivoted from a gaming company to a communication platform after recognising a greater demand for collaborative messaging software.
Types of Business Models
Subscription-Based Model
- Customers pay a recurring fee (monthly/annually).
- Ensures consistent revenue streams.
- Examples: Netflix, Spotify, Microsoft Office 365.
Platform Business Model
- Connects buyers and sellers without owning inventory.
- Generates revenue via commissions and advertising.
- Examples: Uber, Airbnb, Amazon Marketplace.
Freemium Model
- Offers a free product with premium upgrades.
- Attracts a large user base, then monetises through additional features.
- Examples: LinkedIn, Dropbox, Zoom.
Direct-to-Consumer (DTC) Model
- Brands sell directly to customers, bypassing retailers.
- Increases profit margins and customer data control.
- Examples: Tesla (no dealership model), Warby Parker (eyewear).
Building a Resilient Business Model
Step 1: Identify Market Gaps
Step 2: Define the Value Proposition
Step 3: Test with Prototypes
Step 4: Validate Revenue Streams
Step 5: Scale and Adapt
Example:
Amazon started as an online bookstore, but Jeff Bezos gradually expanded into cloud computing (AWS), streaming (Prime Video), and logistics (Amazon Fulfillment) – demonstrating the power of iterative business model transformation.
Conclusion & Next Steps
A strong business model is the foundation of a sustainable and scalable business strategy.
Visit our guide Designing an Effective Target Operating Model (TOM) to explore how to translate business strategy into an effective TOM.
Further Resources
Useful Links
StratNavApp is The Sixsess Consultancy’s preferred and recommended tool for strategic and organisation planning.
The Sixsess Consultancy
Our bespoke consultancy services are designed to empower leaders, optimise processes, and embed sustainable change.
Contact us today to learn more about how we can support your journey.
About The Sixsess Consultancy
Experts in Change and Transformation
The Sixsess Consultancy specialises in guiding organisations through complex transformations. Our bespoke consultancy services are designed to empower leaders, optimise processes, and embed sustainable change. With proven strategies and a team-first approach, we help organisations navigate change with confidence.
Ready to transform your organisation? Contact us today to learn more about how we can support your journey.
