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Specific or general business model?

It is possible to design a more general business model for an organization and also specific business models for each business or client segment within that same organization. Both models not only should coexist but they should also be highly connected. Sometimes it is useful to start with the development of the more general model and then drill down to the more specific business models. Sometimes the opposite works better. The difficult part, in my opinion, is the link between models. The more general model cannot be just the sum of the various parts, but a kind of synthesis of the specific business models. So, it should be possible to see General Electric's general business model, but also each of its divisions business models and even further down the line and they should all be connected in a coherent way. Does that make sense to any of you? Have you encountered or worked with organizations that required both dimensions of the business model?

Tags: between, business, connection, general, model, models, specific

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Comment by Manoj Puthenveetil on June 15, 2012 at 11:39pm: Hi Rodrigo,

I agree with your observation and Mike's comments below. The company I work for has 3 distinct business lines: Software, Hardware, and Services. Within Software there are multiple divisions with several hunders of products touching thousands of customer segments and generating billions in revenue. When I use the canvas for our strategy discussions, I use it at a product portfolio level (millions in revenue), which may consist of a dozen or more products. That helps me understand the business model for that portfolio, and then drill down at each product level with it's own business models. In a nutshell, depending on your business, you would want to start at the right level for your objectives and switch levels as appropriate in either direction.

Comment by Mike Lachapelle on June 13, 2012 at 1:55am: Rodrigo;

You are certainly correct in your analysis. There are any number of organizations whose business model is an amalgam of different business lines or types.

In the BMG Alex & Yves discuss unbundling businesses to understand the individual parts that make up the whole. In the case the discuss two examples, telcos and private banking, the higher level business model can be unbundled into three areas, infrastructure management, customer relationship, and products. This is well worth reading.

I have seen bundled businesses from a few perspectives:

A procurement business had bundled two very different businesses into one view. Their main business was solicitation procurement based on requirements of their clients; a solutions business. At the same time they did quite a bit of bi-modal procurement in which they would establish agreements with suppliers and then the clients could make call-ups against that agreement. This, similar to a marketplace, is a network or 2-sided platform business. These two types of businesses require a very different focus and activities.

I worked with an economic development agency who had multiple businesses. Once we had built the overall business model, we realized there were 4 separate businesses (funding, networking, advocacy, and policy) , and again two different types (solutions and network). Since we were there to discuss only the funding related issues, we isolated that business line and built a more detailed model model of that part of the business.

So yes, it is quite possible that businesses run multiple business models and one can build models at the whole view, individual business line view, or even at a sub-organization view. In each of the perspectives as you focus in the level of granularity will likely increase.