Opportunity screening 3. Strategy 4. Operations 5. Revenue streams 6. Sales and marketing 7. Customer centricity Your machine does not exist in a vacuum. As you assess the macroand micro-economics situation, there are internal and external issues facing you. Internally, your concerns are team strength, infrastructure, capital availability, resource limitations, core competencies, product acceptance in the marketplace, sales, market penetration, and other strengths and weaknesses of your growing company. As you look externally, you face the global macro-economic context: Opportunities and threats, the competitive landscape, industry dynamics, and the political, social, and cultural contexts. Lets now dwell on the most crucial aspect of your machine: business design.1 The Three Elements of Business Design Business design (also referred to as business modeling and venture architecture) is the guts of the

The elements of business design encompass three interactive components: Strategy, Operations, and Revenue Streams, as shown in 11.2. For each one of these three components, you have many possible options to consider. Your goal is to make decisions

Strategy Strategy seeks to gain competitive advantages by differentiating the firm from its competitors. The goal is to accomplish superior, sustainable revenues and profits. What differentiates Dominos Pizza from the hundreds of thousands of 103 11.2 Three Elements of Business Design Strategy Operations Revenue Streams Who pays you? How much? What do they pay? Who else will pay? Superior, sustainable profits and competitive advantages Supplying products; delivering services Source: The Center for Competitive Success, www.CompetitiveSuccess.com, Three Elements of Business Design. Used with permission. other pizzerias? Strategy! Dominos opens pizzerias near colleges and military bases and in busy urban and suburban locations; they deliver hot pizza within 30 minutes; and they build momentum through a network of franchisees. And that is the difference between a $300,000 local p

(Approaches to strategy will be discussed more in 15.) Revenue Streams Revenue streams can be another element of differentiation. Who pays you, how much do they pay, for what do they pay, for what else might they pay? Who else will pay you? By way of example, what distinguishes Bright Horizons from other child day care facilities? Their recurring revenue streams! Instead of charging parents, it chose to charge corporations that want to offer in-house child care as an attractive benefit for working parents. Bright Horizons sets up child care centers using the space and facilities of their paying corporate clients. And that is the difference between the average child care business doing $200,000 and Bright Horizons doing $600 million per year. 104 Design Your Money Machine Operations Operations, the method by which you choose to deliver your product or service, is another business design option. What differentiates Wal-Mart, a $350 bil