Understanding the universal business model

The universal business model applies to all businesses regardless of size and is fundamental to establishing enterprise and solution architecture.

Based on the widely recognized business model canvas, it illustrates how organizations maintain business continuity, which also makes it the ideal starting point for defining the enterprise architecture that supports effective and efficient business model execution:

I label this business model universal because it applies to any kind of business regardless of size or field.

Offer

Your offer consists of the products and/or services you bring to the market.

Products

Products are typically classified as tangible objects that are manufactured, stored, shipped and delivered.

Services

Services are usually classified as intangible products.

Market

The market is where you offer your products and services.

Position

Your position can best be describes as the likelihood that customers will buy from you rather that from your competitor. Competitive pricing is one way to strengthen your position, but so is quality of your products and services, branding, visibility and reputation.

Also, your position isn’t fixed, you need to constantly make an effort to maintain it.

Channels

Channels define where your customers can buy your products and services. It’s costly to establish and and maintain any channel, but setting up the right channels also helps strengthen your position.

Customers

Your customers buy your products and services through the established channels.

I recommend that just as you apply the universal business model to your own business, try to also apply it to your potential or actual customers. This will help you fine-tine your offer to better suit their needs, which in turn helps strengthen your position.

Finance

Finance defines the fuel line in your business model engine.

Revenue

Selling products and services generates revenue, which pays for the costs of running the business.

Costs

Developing, marketing and delivering products and services requires resources, which cost money. Keeping it up requires a steady revenue, otherwise your funds will quickly dry up and bankrupt your business.

Capabilities

Capabilities enable you to develop, market and deliver products and services, and enable you to establish and maintain your position, manage your finances – generally, maintain business continuity.

Processes

Processes define how you do things.

Resources

Resources are the fuel that propels your business model engine.

Suppliers

Suppliers replenish your resources (products and services), enabling you to continue developing, marketing and delivering your products and services.