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What is Business Activity Modelling?

October 25, 2017 in  Uncategorized

Business Activity Modelling is a technique to show high-level activities and logical dependencies as a conceptual model, based on a stakeholders perspective.

In a business analysis project there are often varying and differing business stakeholder beliefs, values and concerns held about the organisation’s business system, that may result in conflicting priorities and requirements. Facilitating discussion to explore gaps and overlaps between stakeholders perspectives is key to reaching agreement about worthwhile business improvement opportunities.

One of  many business analysis techniques , Business Activity Modelling provides a strategic view of the high-level business activities to be carried out given the stakeholders perspective and their world-view.

Five types of business activity are represented in a business activity model:

• Plan:  the planning activities that set what must be in place beforehand
• Enable:  the enabling activities that ensure necessary resources are available
• Do:  the doing activities that process the primary business system transformation
• Monitor:  the monitoring activities that check performance measures
• Control:  the control activities that institute corrective actions

The Business Activity Modelling technique provides a conceptual view, which can be used to compare what could be happening with what is actually happening so that any gaps can be explored.

Why use Business Activity Modelling?

Stakeholder perspectives, and the potential business activities that their view implies, need to be considered in the context of improvement opportunities. Often differing world-views emerge, making it necessary to explore each business perspective individually to facilitate the disconnect and reach a decision on the way forward. Either through compromise agreements and /or  resolving the conflicting elements.

Business Activity Modelling focuses on ‘what’ the organisation is doing, rather than ‘how’ it does it (which is more the job of Business Process Modelling). Meaning that business analysts must clear their minds of what’s going on now, and instead channel their domain knowledge and conceptual thinking to consider what could be happening.

How do you use Business Activity Modelling?

There are five main business activity types that need to be mapped out, which are built upon from the ‘transformation’ element of the CATWOE Analysis .

The ‘planning’ activities that decide which resources should be obtained and setting performance levels.

What planning activities must be considered beforehand in order to complete the ‘doing’ and ‘enabling’ activities?

For example:

• Define Employee Requirements
• Identify Suppliers
• Choose Materials
• Plan Infrastructure
• Source Finance

The ‘enabling’ activities that put in place the resources required for the transformation.

What enabling activities are needed to ensure that the resources for performing the ‘doing’ activities are available?

• Recruit Employees
• Train Employees
• Order Materials
• Develop Products
• Establish Facilities

The ‘doing’ activities that perform the primary tasks at the heart of the business system.

What doing activities perform the organisation’s core business activities, for which it has been set-up to do?

• Sell Product
• Perform Service
• Deliver Training
• Provide Consulting
• Give Advice

The ‘monitoring’ activities that measure the operational expectations for the primary tasks.

What monitoring activities check performance levels set during the ‘planning activities’ for the ‘doing’ activities?

• Monitor Sales
• Monitor Returns
• Evaluate Customer Feedback
• Appraise Staff Performance
• Measure Staff Satisfaction

The ‘controlling’ activities that take corrective action when performance is not as expected.

What controlling activities come into play to take action when ‘monitoring’ activities reveal poor performance?

• Adjust Sales Target
• Reconsider Product
• Improve Service Levels
• Adjust Performance Level
• Change Work Environment

In summary, the Business Activity Model is a conceptual model that represents the ideal set of business activities required to implement the particular business perspective.

Would you like some help with this?

Business Change Management Group (BCMG)  helps you build your business analyst career by teaching you the knowledge, skills and abilities needed, with an emphasis throughout on practical learning and real-life case studies.

BCMG’s Strategic Business Analysis course introduces you to all the essential skills of business analysis, including strategic analysis, stakeholder management, business activity modelling, gap analysis and making a business case.

Where do you use Business Activity Modelling?

Business Activity Modelling takes place after the initial investigation of a situation and the analysis of stakeholder perspectives, and can be used to:

• Determine the root cause of conflicting stakeholder perspectives
• Combine differing stakeholder perspectives towards consensus
• Perform gap analysis between the ‘as-is’ situation and ‘to-be’ model
• Identify business improvement opportunities and solution options
• Form the basis of detailed analysis through business process modelling

There isn’t a specific notation for the symbols used on a business activity model. Three symbols are typically used: an oval for the activities, an arrowed line for indicating the logical dependencies between them and a lightening strike exiting the control activity.

A Stakeholder Theory Perspective on Business Models: Value Creation for Sustainability

• Original Paper
• Published: 08 February 2019
• Volume 166 , pages 3–18, ( 2020 )

Cite this article

• Birte Freudenreich 1 ,
• Florian Lüdeke-Freund 2 &
• Stefan Schaltegger 1  

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Business models are developed and managed to create value. While most business model frameworks envision value creation as a uni-directional flow between the focal business and its customers, this article presents a broader view based on a stringent application of stakeholder theory. It provides a stakeholder value creation framework derived from key characteristics of stakeholder theory. This article highlights mutual stakeholder relationships in which stakeholders are both recipients and (co-) creators of value in joint value creation processes. Key findings include that the concept and analysis of value creation through business models need to be expanded with regard to (i) different types of value created with and for different stakeholders and (ii) the resulting value portfolio, i.e., the different kinds of value exchanged between the company and its stakeholders. This paper details the application of the stakeholder value creation framework and its theoretical propositions for the case of business models for sustainability. The framework aims to support theoretical and empirical analyses of value creation as well as the management and transformation of business models in line with corporate sustainability ambitions and stakeholder expectations. Overall, this paper proposes a shift in perspective from business models as devices of sheer value creation to business models as devices that organize and facilitate stakeholder relationships and corresponding value exchanges.

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Acknowledgements

The authors would like to thank Iolanda Saviuc for her support in an early stage of developing the framework.

Authors Birte Freudenreich and Stefan Schaltegger have received a research Grant (No 01UT1425D) from the German Ministry of Science and Education (BMBF).

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Chair for Corporate Sustainability, ESCP Europe Business School Berlin, Heubnerweg 8-10, 14059, Berlin, Germany

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Freudenreich, B., Lüdeke-Freund, F. & Schaltegger, S. A Stakeholder Theory Perspective on Business Models: Value Creation for Sustainability. J Bus Ethics 166 , 3–18 (2020). https://doi.org/10.1007/s10551-019-04112-z

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Received : 21 December 2016

Accepted : 18 January 2019

Published : 08 February 2019

Issue Date : September 2020

DOI : https://doi.org/10.1007/s10551-019-04112-z

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TOGAF ® Series Guide

Business Models

Prepared by The Open Group Architecture Forum

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Published by The Open Group, April 2022. This document supersedes the previous version published in June 2018.

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1 Introduction

1.1 Overview

1.2 Objectives

2 What is a Business Model?

3 The Impact and Benefit of Business Models

4 The Relationship between Business Models and Business Architecture

5 Using Business Models in the TOGAF Standard

6 A Structured Approach for Business Model Innovation

7 Example of a Business Model Framework

8 Conclusion

A Overview of the Business Model Canvas

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More information is available, along with a number of tools, guides, and other resources, at www.opengroup.org/architecture .

About the TOGAF ® Series Guides

The TOGAF ® Series Guides contain guidance on how to use the TOGAF Standard and how to adapt it to fulfill specific needs.

The TOGAF ® Series Guides are expected to be the most rapidly developing part of the TOGAF Standard and are positioned as the guidance part of the standard. While the TOGAF Fundamental Content is expected to be long-lived and stable, guidance on the use of the TOGAF Standard can be industry, architectural style, purpose, and problem-specific. For example, the stakeholders, concerns, views, and supporting models required to support the transformation of an extended enterprise may be significantly different than those used to support the transition of an in-house IT environment to the cloud; both will use the Architecture Development Method (ADM), start with an Architecture Vision, and develop a Target Architecture on the way to an Implementation and Migration Plan. The TOGAF Fundamental Content remains the essential scaffolding across industry, domain, and style.

ArchiMate, DirecNet, Making Standards Work, Open O logo, Open O and Check Certification logo, Platform 3.0, The Open Group, TOGAF, UNIX, UNIXWARE, and the Open Brand X logo are registered trademarks and Boundaryless Information Flow, Build with Integrity Buy with Confidence, Commercial Aviation Reference Architecture, Dependability Through Assuredness, Digital Practitioner Body of Knowledge, DPBoK, EMMM, FACE, the FACE logo, FHIM Profile Builder, the FHIM logo, FPB, Future Airborne Capability Environment, IT4IT, the IT4IT logo, O-AA, O-DEF, O-HERA, O-PAS, Open Agile Architecture, Open FAIR, Open Footprint, Open Process Automation, Open Subsurface Data Universe, Open Trusted Technology Provider, OSDU, Sensor Integration Simplified, SOSA, and the SOSA logo are trademarks of The Open Group.

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Business Model Canvas is a trademark of Alexander Osterwalder.

All other brands, company, and product names are used for identification purposes only and may be trademarks that are the sole property of their respective owners.

Acknowledgements

The Open Group gratefully acknowledges the following people and organizations for their contribution to the development of this Guide:

(Please note affiliations were current at the time of approval.)

• The authors and reviewers – Steve DuPont, J. Bryan Lail, Stephen Marshall, Chalon Mullins, Alec Blair, and Mats Gejnevall
• Past and present members of The Open Group Architecture Forum
• The Business Architecture Guild for permission to reuse graphics

References to the Business Model Canvas are as per the usage conventions issued by strategyzer.com .

Referenced Documents

The following documents are referenced in this TOGAF ® Series Guide:

• A Guide to the Business Architecture Body of Knowledge ® (BIZBOK ® Guide), Version 6.5, Business Architecture Guild ® , 2018
• Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, Alexander Osterwalder, Yves Pigneur, John Wiley & Sons, 2010
• Defining the IT Operating Model, White Paper (W17B), published by The Open Group, September 2017; refer to: www.opengroup.org/library/w17b
• Linking Business Models with Business Architecture to Drive Innovation, White Paper, Business Architecture Guild ® , August 2015
• Seizing the White Space: Business Model Innovation for Growth and Renewal, Mark W. Johnson,‎ Harvard Business Review Press, 2010
• The Age of the Platform: How Amazon, Apple, Facebook, and Google have Redefined Business, Phil Simon, Motion Publishing, 2011
• The Business Model Cube, Peter Lindgren, Ole Horn Rasmussen, Department of Mechanical and Manufacturing Engineering, Aalborg University, Denmark, 2013 (Journal of Multi Business Model Innovation and Technology, 135-182, River Publishers, 2013)
• The Business Model Innovation Factory: How to Stay Relevant when the World is Changing, Saul Kaplan, 2012
• The Five Competitive Forces that Shape Strategy, Michael E. Porter, Harvard Business Review Press, 2008
• The TOGAF ® Standard, 10 th Edition, a standard of The Open Group (C220), published by The Open Group, April 2022; refer to: www.opengroup.org/library/c220
• TOGAF ® Series Guide: Business Capabilities, Version 2 (G211), published by The Open Group, April 2022; refer to: www.opengroup.org/library/g211
• TOGAF ® Series Guide: Value Streams (G178), published by The Open Group, April 2022: refer to: www.opengroup.org/library/g178
• What is Business Design?, Rotman DesignWorks, Rotman School of Management, University of Toronto, 2015; refer to: www.rotman.utoronto.ca/FacultyAndResearch/EducationCentres/DesignWorks/About-BD

1 Introduction

This TOGAF ® Series Guide to Business Models provides a basis for Enterprise Architects to understand and utilize business models, which describe the rationale of how an organization creates, delivers, and captures value. [1] Business models provide a powerful construct to help focus and align an organization around its strategic vision and execution. In this Guide we cover different forms of business models and approaches to modeling, from the conceptual down to a practical example.

There is a direct relationship between the business innovation captured in these models and the approach to implementing that innovation through Enterprise Architecture. We explore that relation through Business Architecture methods such as value streams and business capabilities, then provide a specific example based on a generic retail company undertaking a Digital Transformation. An appendix delves deeper into the structure of one of the most commonly used business model frameworks for architects interested in working with business leaders to execute their strategy.

1.1 Overview

The world’s top C-suite leaders know that the effective management and exploitation of information is a key factor for business success, and is critical to developing and maintaining competitive advantage. An Enterprise Architecture supports this objective by providing a strategic context for the evolution of technologies in response to the constantly changing needs of the business environment.

As stated in the TOGAF Standard – Introduction and Core Concepts, a key goal of Enterprise Architecture is to create or enable the alignment of the business operations with the overall business direction (vision and strategy). Furthermore:

“… a good Enterprise Architecture enables you to achieve the right balance between business transformation and continuous operational efficiency. It allows individual business units to innovate safely in their pursuit of evolving business goals and competitive advantage. At the same time, the Enterprise Architecture enables the needs of the organization to be met with an integrated strategy which permits the closest possible synergies across the enterprise and beyond.”

To achieve this alignment, the architect must develop a fundamental understanding of the core elements that make up a business and how they relate to the ways in which it creates, captures, and delivers value. However, it is not always clear what the business direction is, or how the business intends to create, capture, and deliver value to customers and stakeholders. If we don’t fully understand what a business does or what it intends to do; why it exists; or how it works to produce something of value to stakeholders (while making money in the process), then how can architects devise an appropriate target-state environment that realizes the business objectives?

One effective way to achieve alignment between an organization’s strategic objectives and the target-state architecture is to employ the concept of the business model. Business model artifacts are used to:

• Provide a common understanding of what the organization is, or looks like, today
• Portray what it intends to become in the future
• Create a critical link between the business strategy and the required blueprints of the Enterprise Architecture that define what the business needs to transform to, along with the plans that describe how to do it

The rest of this Guide describes what business models are and how business model artifacts are constructed; their purpose and benefits; how to use modeling frameworks to create a business model artifact and perform business model innovation; and where to apply them within the realms of Enterprise Architecture and the TOGAF Architecture Development Method (ADM).

1.2 Objectives

The objectives of this Guide are to:

• Familiarize architects with the concept and purpose of business models
• Illustrate the concept and purpose by looking in some detail at one particular technique for creating and leveraging business model artifacts: the Business Model Canvas™
• Explain how business models relate to and influence the TOGAF ADM

The goal is for practitioners to be able to use business models to frame, scope, and define the boundaries of their architecture work, particularly in relation to creating current and target states for the Phase B: Business Architecture part of the ADM process. A key practice we apply to help achieve this goal is to follow Business Architecture principles from the best practices in the Business Architecture Guild ® , such as the Guild White Paper that provided the basis for this Guide. [2]

2 What is a Business Model?

A business model describes the rationale for how an organization creates, delivers, and captures value. This may refer only to an abstract concept that may exist in a leader’s mind. Or it may be more concrete, whereby business model artifacts provide specific views of an instance of a business model, defining the structural elements of the business model as well as the relationships between each element.

Business models can be represented in different ways. The three-element framework shown in Figure 1 describes the structure of a business model in its most abstract form.

(Source: The Business Model Innovation Factory, Saul Kaplan, 2012)

Figure 1: Abstract View of a Business Model

Other well-known framework examples include the Four-Box Framework ( Figure 2 ) and the Business Model Cube ( Figure 3 ).

(Source: Seizing the White Space, Mark W. Johnson, 2010)

Figure 2: Four-Box Framework

(Source: The Business Model Cube, Peter Lindgren, Ole Horn Rasmussen, 2013)

Figure 3: Business Model Cube

The theoretical arguments supporting different representations of business models have been in play for many years, yet it was Alexander Osterwalder and Yves Pigneur’s simple-to-use methods and tools described in their book Business Model Generation that popularized the Business Model Canvas (see Figure 4 ) and established it as the baseline for business model innovation. We use this form to show business model alignment between strategy and Business Architecture, followed by a deeper look in Appendix A . Note this type of business model has been introduced in earlier work of The Open Group through the IT4IT Forum. [3]

(Source: Business Model Generation, Alexander Osterwalder, Yves Pigneur, 2010)

Figure 4: The Business Model Canvas

3 The Impact and Benefit of Business Models

Business and IT leaders can obtain powerful leverage using business model artifacts in conjunction with other strategic planning artifacts, Business Architecture views, and organizational change methods to accelerate strategic execution and alignment. Business model artifacts highlight the critical relationships between the various elements that constitute a business in ways that:

• Are not fully covered by other approaches or techniques and, therefore, contribute to a more complete examination of costs, revenues, and other business perspectives
• Are covered by other approaches or techniques – but through a different method or viewpoint – in which case business modeling helps cross-check other points of information and assumptions

Business models improve communication among business executives because they provide a common perspective for the organization’s core business logic, thus helping executives “get on the same page”. Having this common perspective, structure, and understanding allows for more effective business design [4] and enables the successful deployment of an organization’s target-state Enterprise Architecture. In essence, business models provide clarity of thought using a different point of view from the one provided by traditional strategic planning methods, and can foster a greater level of thinking required for innovation.

4 The Relationship between Business Models and Business Architecture

Business models provide a high-level visual representation of the current-state and/or future-state design of a business. They describe the rationale for how an organization creates, captures, and delivers value to its various internal and external stakeholders.

Business models also provide a basis for establishing a common understanding of how to describe and manipulate the business in pursuit of new strategic alternatives. In that sense, business models are a starting point for discussions around business innovation and strategy planning for the allocation of resources.

The development of a business model is initially performed at a relatively abstract or conceptual level. Maintaining this summary view encourages and enables the creative thought process that underpins innovation. It also helps to communicate key ideas about the vision and strategy to a broad audience, at a level that is appropriate to generate cross-disciplinary discussion and promote buy-in.

Usually there is just enough information available in a draft business model for interested parties to explore overall feasibility and support strategic decision-making. On the other hand, the sketch view does not normally contain sufficient information to perform a risk assessment or to develop a plan to execute the agreed strategy.

While the business model creates alignment for achieving business strategy, it is the Business Architecture that articulates the different perspectives and impacts of the business model. Business Architecture breaks the business model down into the core functional elements that describe how the business works, including the business capabilities, value streams, organizational structure and information objects required to deliver the desired business result. This process can also identify gaps and conflicts in the thinking and assumptions used to create the business model. In doing so, it can loop the discussion back to any required changes or improvements to the business model.

In the TOGAF Standard, Phase B: Business Architecture is where architects take the high-level business model artifact and develop a detailed set of architecture blueprints (representing different viewpoints of the proposal) to enable more in-depth planning, investment, and option analysis (see Figure 5 ). These detailed perspectives are useful and necessary for planning teams, business analysts, and business unit managers to understand and evaluate the overall impact of the proposed business model on the operation.

(Source: (top-left) The Five Competitive Forces that Shape Strategy, Michael E. Porter, 2008; and (Business Architecture Blueprints) BIZBOK ® Guide, Version 6.5, 2018)

Figure 5: Relationships between Strategy, Business Models, and Architecture

5 Using Business Models in the TOGAF Standard

The physical process of constructing a business model artifact presents a great opportunity for the architect to bring strategic perspectives of the enterprise into strategy formulation and business planning activities. In this case, the architect and the models they create bridge the gap between strategy and architecture. This helps to:

• Improve the alignment of Enterprise Architecture to strategy
• Elevate the overall quality of the architecture
• Increase the knowledge and value of the architect to the organization

Business models can be a key input into Phase B: Business Architecture of the TOGAF ADM. As such, they are normally associated with the Architecture Vision phase of Enterprise Architecture development. The business model is highly effective at aligning members of the leadership team around new strategies or a different business direction. The Business Architecture is more effective at aligning the rest of the enterprise on what needs to be done (and how) at an operational and organizational level:

• First, planners and architects use the business model to identify key partners that are stakeholders in the change

The business models are analyzed to gain insight into additional stakeholders, and their concerns, objectives, and key business requirements.

• Next, the business models are used to verify the business goals, strategic drivers, and constraints of the organization

Any inconsistencies or gaps are provided as feedback to the sponsors of the architecture statement of work for clarification.

• Architects then analyze the business models and use capability mapping to identify new capabilities (or enhancements to existing ones) that are required to realize the target business model

Architects also use value stream mapping to identify new value streams (or gaps in existing value streams) that must be developed to produce the value items described in the business model value propositions.

• Having assessed the capability gaps and future requirements, the target business models can be used to define the scope of the architecture statement of work in greater detail

They offer insights as to the breadth and depth of the architecture efforts. During this scoping step, the architecture is partitioned and aligned with the organization’s business models to ensure alignment of the architecture to strategy and value.

• The business models help to formulate architecture and business principles

For example, an organization shifting to a model that requires greater orchestration of the customer experience may benefit from establishing business principles for managing customer-centered solutions and handling customer information at different touch points.

• The business models provide an anchor for the development of the architecture project value proposition

An architecture project value proposition that demonstrates close alignment to the business model value proposition provides a powerful business case for the project.

• Finally, the business models facilitate the detailed statement of work and approval of the architecture project

This analysis provides a better understanding of the business problem at hand and offers insights into the nature, scope, and effort required for the architecture project.

Business models are part of the Architecture Vision inputs to the Business Architecture phase of the TOGAF ADM where they serve to help describe the business problem and scope of work of the Business Architecture phase, provide the business value context for the Business Architecture target description, and provide a means to align the Business Architecture to strategy and value:

• Planners and architects use the business models to understand the essential business problem and the vision of the change being proposed
• Business models help determine the Business Architecture statement of work and the types of Business Architecture models or artifacts required

For example, a company that envisions a business model that expands its existing product offering through new delivery channels to new customers may not require updates to the existing product catalog or product lifecycle diagrams.

• Business Architects utilize the business models as context and a starting point for baseline and target Business Architecture development
• Transition business models, if available, are valuable inputs to creating transition Business Architectures and business roadmaps

Business models help keep initiatives focused on the organization’s value-producing logic during the remainder of the TOGAF ADM phases. In the Information Systems Architecture and Technology Architecture phases, they can help planners and architects to maintain orientation of the architecture effort to the organization’s vision for value creation and exchange. During the Opportunities & Solutions and Migration Planning phases, business models, companions to the business roadmap produced in the Business Architecture phase, provide context for the development of architecture roadmaps, and implementation and migration plans.

Finally, because business models speak the language of the business and are validated early, they serve as an effective tool to communicate traceability of the architecture and solutions to the organization’s strategy. This greatly facilitates stakeholder engagement.

6 A Structured Approach for Business Model Innovation

In order to steer the business in the face of constant change or to intentionally disrupt the market, business strategists are starting to use business models to identify new opportunities for innovation. Like other architecture disciplines, a designed structure that helps align leaders on the big shifts in revenue streams, costs, customer segments, and value propositions will improve the chances of success for any new strategy formulation.

Classically, business innovation has focused on product development or on process optimization. Businesses are increasingly recognizing that there are other aspects of the enterprise that offer more lucrative opportunities for improvement. For example, revenue streams (moving customers to subscription models rather than one-time purchases), value propositions (emphasizing service rather than just the physical product), cost structures (streamlining the supply chain), or channels (moving to online channels and reducing the physical footprint). Business model analysis enables this kind of innovation by explicitly calling out other aspects of the business around which more significant opportunities to improve business outcomes may exist.

Business model innovation involves taking a proposed business model or models from ideation to implementation in line with an overall business strategy. Using a design-oriented approach, business model innovators first construct observations about their environment and the organization’s position within that environment, including a description of the current-state business model. Then they develop and test a set of hypotheses using alternative future-state business models. They may design working prototypes of those business models in order to test and validate assumptions.

Most importantly, business model innovators use test results to confirm or reject the hypotheses and adjust or iterate the business model prototypes accordingly. Finally, they select the optimal business model (or models, as required to address different customer groups and value propositions within a single business) and describe them in sufficient detail through the Enterprise Architecture to support planning, development, and deployment.

While it might be a relatively easy task to conceive a new business model, implementing it and then continuously adapting it are not so easy. However, in the current environment of constant and rapid change, implementation and adaptation are exactly where successful organizations need to excel. It is not sufficient to establish a business model and then stop there; companies must constantly re-evaluate and redefine basic precepts including:

• What the company currently does
• How the company does it
• What the company could do
• How the company could do it
• With whom the company should do it
• How each piece interacts with parts of the company’s business ecosystem and the world at large [5]

The last point is particularly significant. When constructing a business model, organizations should ensure that they design and build all elements of that business model for agility so as to enable the business to thrive in a state of constant motion.

7 Example of a Business Model Framework

We will now use a specific type of business model framework – the Business Model Canvas – to provide a use-case. Appendix A provides a deeper definition of the structural elements in the canvas and how to interpret them. The starting place to build a model in the canvas depends on the organization and the desired usage for describing business value. Our use-case will take us through a retail business, which relates to the examples previously used in the TOGAF Series Guides to Business Capabilities and Value Streams (see Referenced Documents ).

In Figure 6 , we have a generic representation of a retail business model in its current state, meaning it represents how the business has been delivering value for the last several years. One way to understand the model is to read from the customers’ perspective – right-to-left – seeing how the business strives to serve both a mass retail shopper market and provide some regional specialization; provides both personal and sustained services; and gives shoppers both physical store shopfronts and the ability to find inventory ahead of time through the Internet. The business intends to provide greater value than the competition through lower prices, personalized help, and a better product range. To achieve this, they must have strong customer analytics, maintain their brand and facilities, and keep strong partnerships that lead to the right products through the right suppliers to meet those customer needs.

Figure 6: Retailer Business Model Canvas – Current State

Next we look at a situation that could lead to a change in the business model. The business may need to make significant changes due to market pressures, reduced sales, or increasing costs, or it may want to introduce new products or services to address unmet customer needs. A common guideline is that a truly new business model comes from a combined shift in customer segments and value proposition; anything narrower or on a smaller scale is merely an adjustment to the current business model.

In the future-state model (see Figure 7 ), we see shifts in both the revenue-generating side of the canvas (increased specialization with specific customers, more online and digital presence, targeted value at the lowest possible cost) and the cost side (digital technologies being a key cost driver, a need for new partnerships, plus the global impacts on partnerships and costs). Some areas, such as key activities and sources of revenue, don’t change. Forming a new business model like this is a very people-oriented process, ideally based on good market, product, and cost data, but with leaders reaching alignment on how the business will deliver the most value in the future.

Let’s focus on the potential role of the architect and the Business Architecture methodology involved in helping leadership make this journey. The retailer has decided to pursue a new business model based on sound market trends and competitive imperatives (addressed on the revenue-generating or right-hand side of the canvas), but lacks a clear understanding of how value is truly delivered to stakeholders. Value streams can help provide that exact understanding, which then lead to identifying key business capability gaps that in turn define the required changes to the cost (left-hand) side.

Figure 7: Retailer Business Model Canvas - Future State

As examples of these relationships:

• The shift in the business model’s direction drives a need to reassess the “Acquire Retail Product” value stream as shown in the TOGAF Series Guide to Value Streams (§4.1), where the value stages may stay the same but some of the stakeholders, criteria, and value items will be affected
• Value may now be delivered to the customer from all five value stages when customers are located anywhere in the world, including finding products specialized to their local needs
• The changes to internal resources and partnerships (digital technologies as a key cost and source of new partnerships) could lead to critical business capability gaps to support value delivery, as detailed in the TOGAF Series Guide to Business Capabilities (§4.2); e.g., there may be gaps in Product Marketing that must be addressed to support a digital presence that includes online and mobile shopping, along with other new requirements caused by the desire for more global scale and partnerships

8 Conclusion

Businesses are turning more towards the use of business models as a key component of their strategy design and innovation processes. A business model by itself, however, does not provide sufficient granularity for organizations to construct detailed plans to realize those strategies. That is where Business Architecture plays a critical role in articulating and enabling the designs prompted by a business model.

This Guide demonstrates that business model innovation combined with Business Architecture provides planning teams with a more sophisticated set of options for moving from strategy through to actionable deployment. In doing so, it underscores the crucial role that business models can play in the effective execution of business strategy, while highlighting a number of opportunities to increase their use and effectiveness as an everyday business tool.

Appendix A: Overview of the Business Model Canvas

The framers of the Business Model Canvas purposefully created it to be an elegant, one-page representation of a business model that:

• Provides a shared perspective and understanding of an organization’s business model(s)
• Enables informed discussion among business executives on business issues and necessary change
• Fosters a design-oriented approach to identify what a business can do differently to maximize value exchanges between market participants
• Enables collaboration and co-creation of current-state and future-state business model options
• Focuses on the key revenue and cost components supporting an agreed value proposition for a particular customer segment

The Business Model Canvas includes nine building blocks, as depicted in Figure 8 :

• Customer Segments – the different groups of people or organizations an enterprise aims to reach and serve
• Value Propositions – the benefits customers can expect from products and services
• Channels – how a company communicates with and reaches its Customer Segments to deliver a Value Proposition
• Customer Relationships – the types of relationships a company establishes with specific Customer Segments
• Revenue Streams – the revenue a company generates from each Customer Segment
• Key Resources – the most important assets required to make a business model work
• Key Activities – the most important things a company must do to make its business model work
• Key Partnerships – the network of suppliers and partners that make the business model work
• Cost Structures – all costs incurred to operate a business model

Figure 8: The Business Model Canvas [6]

The Business Model Canvas is a particularly useful tool for understanding how a business handles its key determinants of revenue and cost, the value proposition it uses to go to market, the customers it serves, and the resources it needs to execute. These elements play a crucial step in laying the framework for:

• The business case to move forward
• The remaining work to address the specific application, information, and technology solutions
• Achieving alignment between the business strategy and deployment plans

Identifying and working with a clearly articulated business model that supports the goals and objectives of the organization is a critical success factor for executing strategy – from inception to deployment. The Business Model Canvas can help expose capability gaps that exist with a proposed business model to assist strategists in charting the necessary course of action.

[1] See the referenced Business Model Generation, p.14.

[2] Linking Business Models with Business Architecture to Drive Innovation, A Business Architecture Guild White Paper, August 2015.

[3] Defining the IT Operating Model, White Paper published by The Open Group, September 2017 (see Referenced Documents ).

[4] What is Business Design?, Rotman DesignWorks, 2015.

[5] From The Age of the Platform by Phil Simon, 2011.

[6] A. Osterwalder, Yves Pigneur et al, Business Model Generation (John Wiley & Sons, Inc., 2010. Page 14).

Free PDF Business Plan Templates and Samples

By Joe Weller | September 9, 2020

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We’ve gathered the most useful collection of business plan PDF templates and samples, including options for organizations of any size and type.

On this page, you’ll find free PDF templates for a simple business plan , small business plan , startup business plan , and more.

Simple Business Plan PDF Templates

These simple business plan PDF templates are ready to use and customizable to fit the needs of any organization.

Simple Business Plan Template PDF

This template contains a traditional business plan layout to help you map out each aspect, from a company overview to sales projections and a marketing strategy. This template includes a table of contents, as well as space for financing details that startups looking for funding may need to provide. 

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Lean Business Plan Template PDF

This scannable business plan template allows you to easily identify the most important elements of your plan. Use this template to outline key details pertaining to your business and industry, product or service offerings, target customer segments (and channels to reach them), and to identify sources of revenue. There is also space to include key performance metrics and a timeline of activities. 

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Simple 30-60-90 Day Business Plan Template PDF

This template is designed to help you develop and implement a 90-day business plan by breaking it down into manageable chunks of time. Use the space provided to detail your main goals and deliverables for each timeframe, and then add the steps necessary to achieve your objectives. Assign task ownership and enter deadlines to ensure your plan stays on track every step of the way.

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PDF | Smartsheet

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Use this one-page template to summarize each aspect of your business concept in a clear and concise manner. Define the who, what, why, and how of your idea, and use the space at the bottom to create a SWOT analysis (strengths, weaknesses, opportunities, and threats) for your business. 

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Fill-In-the-Blank Small Business Plan Template PDF

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Use this one-page template to create a scannable business plan that highlights the most essential parts of your organization’s strategy. Provide your business overview and management team details at the top, and then outline the target market, market size, competitive offerings, key objectives and success metrics, financial plan, and more.

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Startup Business Plan PDF Templates

Startups can use these business plan templates to check the feasibility of their idea, and articulate their vision to potential investors.

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Sample 30-60-90 Day Business Plan for Startup

Startups can use this sample 30-60-90 day plan to establish main goals and deliverables spanning a 90-day period. Customize the sample goals, deliverables, and activities provided on this template according to the needs of your business. Then, assign task owners and set due dates to help ensure your 90-day plan stays on track.

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Nonprofit Business Plan Template PDF

Use this customizable PDF template to develop a plan that details your organization’s purpose, objectives, and strategy. This template features a table of contents, with room to include your nonprofit’s mission and vision, key team and board members, program offerings, a market and industry analysis, promotional plan, financial plan, and more. This template also contains a visual timeline to display historic and future milestones.

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One-Page Business Plan for Nonprofit Organization PDF 

This one-page plan serves as a good starting point for established and startup nonprofit organizations to jot down their fundamental goals and objectives. This template contains all the essential aspects of a business plan in a concise and scannable format, including the organizational overview, purpose, promotional plan, key objectives and success metrics, fundraising goals, and more.

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Fill-In-the-Blank Business Plan PDF Templates

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Simple Fill-In-the-Blank Business Plan PDF

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Lean Fill-In-the-Blank Business Plan PDF

This business plan is designed with a Lean approach that encourages you to clarify and communicate your business idea in a clear and concise manner. This single page fill-in-the-blank template includes space to provide details about your management team, the problem you're solving, the solution, target customers, cost structure, and revenue streams. Use the timeline at the bottom to produce a visual illustration of key milestones. 

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For additional resources, take a look at " Free Fill-In-the-Blank Business Plan Templates ."

Sample Business Plan PDF Templates

These sample business plan PDF templates can help you to develop an organized, thorough, and professional business plan.

Business Plan Sample 

This business plan example demonstrates a plan for a fictional food truck company. The sample includes all of the elements in a traditional business plan, which makes it a useful starting point for developing a plan specific to your business needs.

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Use this sample outline as a starting point for your business plan. Shorten or expand the outline depending on your organization’s needs, and use it to develop a table of contents for your finalized plan.

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Sample Business Financial Plan Template

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Teaching Entrepreneurship

Experiences teach skills..

Teaching the Business Model Canvas: Part 1 – Intro

October 4, 2021 doan winkel comments 3 comments.

When we ran a workshop with Dr. Alex Osterwalder about how he teaches his Business Model Canvas, attendees were so excited about what he was sharing, 98% of them voted to change our schedule on the fly and extend his session from 60 to 90 minutes.

The exercises he was sharing were too engaging to let him stop.

In this article, the first in a 3-part series, we’ll structure Osterwalder’s exercises into easy-to-implement lesson plans you can use with your students.

Exercise #1: Business Model Matching

To introduce students to the 9 components of the BMC, Dr. Osterwalder starts by giving students a set of business model hypotheses and asking them to place each one in the appropriate box of the BMC.

Prepping Before Class

To make the most efficient use of class time, assign students to watch these videos before class:

• Getting from Business Idea to Business Model
• Visualizing Your Business Model
• 9 Steps to Creating a Successful Business Model

Then you’ll want to print out the worksheets linked in the lesson plan below. Digital worksheets are also in the lesson plan if you’re teaching remotely.

Step 1: Fill the Boxes

Alex uses Airbnb in his first exercise because:

• Students are familiar with Airbnb
• As a two-sided marketplace, Airbnb is a great example of how one business model may need to fulfill the needs of multiple customer segments to be successful

Starting with the “Airbnb BMC: Travelers” worksheet, ask students to write each of the provided business model hypotheses in their appropriate boxes:

Copies of this worksheet are available in the lesson plan below.

We recommend each student complete this individually. While students will work in pairs for the next step, to help increase engagement and discussion, we like using Think. Pair. Share. with this type of exercise, which starts by having students work on their own.

Step 2: Pair

Next, ask students to pair up (if necessary, create breakout rooms for virtual students), and compare their answers. If there’s anything they disagree on, ask them to try to discuss and come to a consensus.

Note: this is an important part of the Think. Pair. Share. process. Talking with a peer helps them organize their thoughts better and practice vocalizing them. If your students are reluctant to speak in class, pairing students up like this before asking for a class-wide discussion can help inspire more interaction.

Step 3: Share

Reconvene the class. Go one by one through the boxes and ask a pair to share what they wrote for a particular box. Go through each of the boxes in this order:

• Customer Segments
• Value Proposition
• Customer Relationship
• Revenue Streams
• Cost Structure
• Key Activities
• Key Resources
• Key Partners

Ask a new pair to report out what they wrote for each box and then ask the rest of the class if they had anything else different for that box. If student pairs disagree on what should be in a particular box, use that as an opportunity to increase discussion and, before you reveal the correct answer, have your students vote on which answer they think will be right.

Slides with the correct answers, like the one above, are available in the lesson plan below.

Step 4: Repeat with Airbnb Hosts

Now ask students to fill out the AirBnB BMC: Hosts worksheet using the same Think-Pair-Share technique. 

Take time to explain that many businesses don’t have just one business model as a part of their success. Instead, many businesses, like Airbnb, are a multi-sided market. In this business model, the needs of two parties must be met.

You can highlight the popularity of this business model by pointing out that Uber, Doordash, Amazon all have this multi-sided market where the business has to keep multiple customers happy.

Summary & Next Steps

Alex prefers simple matching exercises like these as a quick way to introduce the BMC. For more details on how to use it, including worksheets and slides, check out the free lesson plan below.

Next up, Alex provides students with BMCs that are partially filled out and asks students to fill in the rest – which we’ll detail in the next article in this series! We’ll share two more steps in the process Dr. Osterwalder uses to teach the business model canvas:

• How to use fill in the blank exercises to help students create their own canvases
• How to use prioritization exercises to teach how to use the BMC to test business model assumptions

Want More from Dr. Osterwalder?

Find more about Alex’s work at Strategyzer.com .

Watch Alex Teach

If you’d like to see Alex teach the Business Model Canvas himself, just enter your email below to watch his full workshop on Teaching the BMC:

Get the Teaching the Business Model Canvas Lesson Plan

We’ve created a detailed lesson plan for the “Teaching the Business Model Canvas: Part 1” exercise to walk you and your students through the process step-by-step.

Read Part 2 In This Series of Teaching the Business Model Canvas

Check out the second post in this series, focused on using a fill-in-the-blank exercise to help students develop their own hypotheses.

What’s Next?

In upcoming posts, we will share two more steps in the process Dr. Osterwalder uses to teach the business model canvas.

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Hi I would like to teach entrepreneurship to youth from grade 6-12. I am an entrepreneur myself and want to teach learners as an after school activity. I am looking for guidance on how to accomplish this in South Africa, a country where the overall unemployment is 60%. Please can you assist me. I thank you in advance.

Canvas: Es una buen técnica para simplificar al emprendedor en su proceso de aprendizaje a convertirse en un empresario de éxito

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Retail Dogma

RETAILDOGMA

RETAIL EDUCATION & TRAINING SOLUTIONS

Retail Business Model Explained

A retail business is a business that sources products in bulk and then sells them directly to the end consumer through online or offline retail stores.

An ecommerce store, for example, is an online retail business.

Read Also: What is Retail?

In this article, we are going to discuss in details the different elements of a retail business model, and these include:

• The Value Proposition
• Key Activities

Key Partners

Customer segments.

• Customer Relationships

Key Resources

Revenue streams, cost structure, retail business model canvas.

We are going to use the nine block Business Model Canvas to explain the different building blocks of a retail business

You can download a free printable PDF copy of the above retail business model canvas template and fill it with your business’ details from here . We also explain how to use this template through an example of a hypothetical retail business in this free retail management course

Value Proposition in a Retail Business Model

The main value proposition of any retail business is in putting together a product assortment that is sought after by the target end consumer, and making those products available for purchase in a convenient way.

Retailers don’t have to manufacture or create their own products and brands, and so retail in its essence is actually a service business. This service is curating a product assortment and bringing it closer to the end consumer to buy directly and conveniently.

The more attractive such product assortment, and the more newness and freshness is injected into it on a regular basis, the better the value given to the customer. Some retailers, such as discount and off price retailers , offer value by maintaining everyday low prices and passing savings to their customers

Which takes us to the next point..

Key Activities in a Retail Business Model

Based on what we have just mentioned as the key value proposition, the key activities to bring this value proposition to life are the following:

• Product sourcing from different manufacturers and suppliers
• Marketing the offered products to the end consumer through different channels to drive traffic to the stores
• Opening and operating the stores to display and sell those products
• Regular replenishment of the sold products for continuity of business and for best customer experience
• The actual sales transaction at the end of the process

RETAIL GROWTH & EXPANSION

• The different strategies to grow a retail business
• Market & product assortment expansion
• Business model innovation

The most important partners for a retail business are the suppliers, manufacturers, wholesale vendors , as well as the landlords at all the brick & mortar locations.

The better the relationship is kept with those partners, and the more optimized the costs and margins are kept between all the parties, the healthier and more sustainable the business is going to be.

Read Also: Supplier Bargaining Power

A retail business, by definition, serves the end consumer. The products sold could be relevant to the mass market (such as groceries) or could be more niche related, such is the case for specialty retailers.

Customer Relationship

The main channel for customer relationship is directly at the store through customer service and interactions on the floor.

In addition to that, many retailers collect customer information and feed them into a CRM system to be able to communicate the newest offers and collections to the customers and bring them back to the stores.

Retail businesses need to rent store locations and warehouse facilities to deliver the service to the customers. Furthermore; since this is a service business, human resources is a key component for operating this business.

The traditional sales channel used to be brick & mortar retail stores.

In the past few years, ecommerce started to emerge, and retailers started integrating online channels into their existing offline business . As we have mentioned earlier, one of the key value propositions is convenience and being closer to customers. Ecommerce delivers on this.

Some retail businesses have chosen to be pure play online retailers; although many of them have resorted to opening brick & mortar stores to reach a bigger audience and be closer to customers.

Recently, a lot of retailers have also started experimenting with the idea of a Pop-Up shop , which is primarily used as a marketing activity and also to test the waters before taking brick & mortar locations.

The main revenue stream for this business is direct product sales at the stores.

Tip Join the academy and learn about different alternative business models that a retailer can use to diversify his revenue streams to grow and expand his retail business.

The cost structure in the retail business model represents what needs to be paid for all the key activities and key resources to materialize.

At retail businesses the cost structure will include:

• COGS : what the retailer pays to source the products
• Store Rents
• Logistics: Warehouse rents, trucks and product processing
• Employees: Store and corporate
• Marketing & Branding

Retail Business Model PDF

Download the free retail business model PDF template and take our free introductory retail management course for a demo on how to complete this template or how to use it to create new business models.

THE PROFESSIONAL RETAIL ACADEMY (PRA) ™

• In-depth retail management courses
• Learn the best practices of the industry
• Download ready-to-use professional templates
• Get certificates of completion for each course
• One membership = Access to all courses

More Resources

Thank you for reading this article on Retail Business Model. We recommend the below free resources as well:

• Retail Management
• The Retail Store

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CONNECT THE DOTS

Learn how to manage a retail business end-to-end.

We’ve put together a curriculum, specifically designed for retail owners or retail professionals who want to advance into senior management roles.

Learn how to connect the dots of the business and take the basic knowledge to the next level of application .