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3 elements of a winning business model – Strategically 3 is a magic number

All good things come in 3's ….. and so it is with strategy. 

  1. CREATE VALUE? 
  2. DELIVER VALUE? 
  3. CAPTURE VALUE? 

These are the 3 elements of a winning business model (with thanks and appreciation to business generation.com).

'Innov8' - A winning business model

We need to: 

CREATE VALUE – for our customers 

DELIVER VALUE – do the things required to make ‘create value’ happen 

CAPTURE VALUE – make profit for us (create = revenue, deliver = costs) 

Obviously – it gets a little more complex than that once we delve deeper under the engine. Probably the most important (or at least the starting point) amongst these elements is how we 1. Create Value for customers. This can be sub-divided into 4 components: 

Creating value - getting 'under the hood'

  • Our target customers 
  • Our 'value promise' to those customers 
  • How we generate awareness and ultimately reach those customers  
  • How we work with and maintain relationships with those customers 

That takes us (briefly) to the key points with regard to 2. Deliver Value to customers. This in turn can be sub-divided into 3 components: 

Deliver value - getting 'under the hood'

  • Our activities (the things we have to do to create value)  
  • Our resources (that we have at our disposal to help deliver value)  
  • Our partnerships (the people outside the business who also help to deliver value) 

Finally we need to consider how to 3. Capture Value for ourselves. This is sub-divided into 2 final engine parts: 

Capturing value - getting 'under the hood'

  • Our revenues (generated by creating value) 
  • Our costs (incurred by delivering value) 

The difference is obviously profits (how can you tell that I am an accountant at heart!). 

So - a key rule of strategy - think: 

1. CREATE VALUE? - 2. DELIVER VALUE? - 3. CAPTURE VALUE? 

Because in strategic terms - 3 is a magic number!

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