Introducing the Business Model


Introducing the Business Model

In the previous articles, important policies for the development of small and medium enterprises and the business planning required for starting a business (Writing Business Plan). Market Research (Marketing for Small Business)etc. were presented. The author’s belief is that in improving the competitiveness of small and medium enterprises in Myanmar, entrepreneurs and managers cannot adhere to traditional management systems. It is a fact that modern management techniques need to be studied and applied. Otherwise, the ability of local entrepreneurs to penetrate the international market. foreign goods Services and competitiveness will be a long way off.

One point

One point I would like to mention here is the importance of small businesses. In the author’s previous articles, the country’s economic development; The importance of small businesses in job creation has already been presented. Another important point is that small businesses do not always operate as small businesses. Today, the leading technology companies in the world, such as Google, Facebook Big companies like Apple started out as small businesses. For example, Apple (Steve Jobs), It grew out of a small business started in a garage by Steve Wozniak and Ronald Wayne. The role of modern management techniques is very important in the transformation of such a small business into a successful global company.

In order for a business to be successful, it is necessary for the goods (or services) produced by the business to create value for the consumer and the entrepreneur. Value creation for the consumer is the perception that the benefits (satisfaction, problem solving) of consuming the product are greater than the price paid for the product. In other words, the consumer believes that the product is worth the price. For an entrepreneur, value creation means that the price of the product is greater than the cost of producing that product. Value for an entrepreneur is the profit from the business. For a clearer view, this value creation process can be described by the following equations.


  • Consumer Value = Benefits – Price
  • Value for the entrepreneur = Price – Production Costs

If there is a negative sign in any of the equations (2) above, It will not be sustainable as a business. If the price is higher than the benefit from the good, no one will buy the good. On the other hand, if the cost of production is more than the price of the product, the entrepreneur will stop the production of the product.

A business model (Business Model) means how an organization will create value for consumers and entrepreneurs. It is a model that describes how the value created will be maintained in the long term. I would like to explain here that the business model generation that will be presented now is mainly intended for entrepreneurs who will introduce new products or services in the Myanmar market. Especially those who want to improve the competitiveness of their businesses. It is intended for entrepreneurs who want to penetrate the international market through the domestic market. However, some of the strategies described under this heading are those who wish to distribute existing products to new markets.

Business Model Generation

Business Model Generation, which will be presented now, is based on the book written and edited by Alexander Osterwalder & Yives Pigneur. Certain information and strategies (eg, cloud computing, real time pricing, freemium pricing, (crowdsourcing) is not suitable for Myanmar’s current situation. But I believe that it will be able to be used in Myanmar in the near future. The main essence of this book is that entrepreneurs who want to start a business clearly present the fact that how to plan the model of the business. They will establish in advance in (9) steps. The techniques in this book are used by world-famous companies such as IBM (M), Erickson, Deloy etc. It is currently being successfully used in Canadian government public service departments.

The following are the 9 (9) important foundational steps in building a new business.

1. As a business, the consumer group that will buy the product or service it will

produce must first decide which consumer group (income range, age, occupation) it will target for the product it will produce.

2. Creating value for its target audience

Second, you must consider how your product will create value for your target audience. Creating value for consumers means solving a problem that a consumer is facing (eg, a computer virus removal service) or satisfying a consumer need (eg, a computer store). So, there are two types of value creation: measurable value (low price, speed) or quality value (product design, customer satisfaction).

3. Finding ways to market

The third foundation is how to deliver the value created to the target consumer. Here, making aware of the target consumer of his product; Making the consumer understand the value that his product will provide; Making the product easily available for purchase; Includes after-sales service.

4. How to build a relationship

the consumer After marketing your product. However, you must figure out how you will interact with the consumer in the long term. Here is the search, Attracting long-term consumers; It includes working to buy large quantities.

5. Defining revenue streams

The fifth step is to find out how the consumer values ​​his product in terms of money. The thing to be aware of is that the consumer will decide the value based on the benefits that he will get from consuming a product. And that value may be higher than the price of the product. In addition, he will sell his products wholesale at the right price. The monthly fee as used by the consumer. By collecting annual fees etc., we will create a long-term income stream. etc. must be considered.

6. Important inputs

After identifying the above-mentioned (5) steps. Therefore, the raw materials that will be required for these steps. Investment, technology Critical inputs such as human resources must be identified.

7. Identifying key action points

As the seventh step, creating value for consumers; Marketing the product. Building long-term relationships with consumers. The main points to be worked on in order to generate income must be identified.

8. Determining the people who must cooperate

Those who own the necessary technology. Organizations that will market the product. Those who can support the critical inputs are the ones who must cooperate.

9. Determining the cost

As the last step, based on the above (9) steps. However, you must determine the costs that will be incurred to run the business you will establish.

For those who want to study and read the original book,  You can order at Udacity ( ). However, which is one of today’s popular internet universities, can also learn the How to Bulid a Start-up course based on the original book online.