Primary Business Models

 The Primary Business Models, identified by Edwin Korver, each has a distinct dynamic. Complementary to Don Peppers’ graphical representation of Product and Customer Centricity (the AS-A-PRODUCT business models to the left), we added two new graphs to complete the series.

13.1 - CREATING LEVERAGE

Leverage greatly determines the growth potential of a business model. Prior to the Business Model Matrix™ business literature recognized two levers: Share of Market (blue) and Share of Wallet (green). We pride ourselves to have completed the set with two additional types of leverage: Share of Utilization (yellow) and Share of Transaction (red).

It is important to emphasize that these levers aren’t particularly ‘new’, however, they gained traction due to the rise of digital technology which took away most of the physical barriers that previously limited the growth potential of the underlying business models.

13.2 - DRIVING GROWTH

A product-centric business model is based on generating customer demand driven by product development in order to profit from so-called economies of scale ─ in general, these types of companies looking to increase and defend their Share of Market.

A customer-centric business model, on the other hand, is driven by customer development. Your objective is to fulfill more of the needs of a select group of customers that are more likely to spend more and thereby allow you to increase your Share in their Wallet.

The leverage of a resource-centric business model, Share of Utilization, comes from an ROI on deployable resources. For instance, if you deploy a car in a car-sharing concept, your objective is to increase the utilization of the car, limited by its maximum capacity (Car2Go).

If you offer a ride-sharing platform ─ which is a network-centric business model ─ your objective is to bring together as many riders and ride-hailers together into one ‘space’ to increase the likelihood of a ride to occur from which you can obtain a Share of Transaction (Uber).

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

~ George Bernard Shaw, Man and Superman (1903)​

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