The terms business model, business model, business model and business scenario often appear in architecture development. Based on my own experience, the author tries to explain them.

1. Business model

1. Definition of business model

Business model is the most widely used term. Business model is a relatively new term, which first appeared in the 1951s. At present, this term appears very frequently, and almost all enterprises will use business model when talking about strategy and development model. At present, there is still no authoritative version of the definition of business model. Many scholars at home and abroad have defined business model from various angles, including the book Business Model-the Highest Form of Enterprise Competition by Mr. Li Zhenyong, the founder of domestic innovative business model theory system, and Alexander Osterwald, the founder of foreign business model canvas method, all tried to give the definition of business model in Business Model Generation.

At present, it is generally accepted that in order to maximize customer value, the internal and external factors that can make an enterprise run are integrated to form a complete and efficient operating system with unique core competitiveness, and the overall solution of satisfying customer needs and realizing customer value through the optimal realization form, and at the same time enabling the system to achieve the goal of sustainable profit.

in layman's terms, a business model is a theoretical model that describes how a company creates value, transmits value and obtains value for customers. Explaining the business model in the most straightforward words is to describe how enterprises make money.

2. the role of business model

business model determines the way for enterprises to make money, and it is in a very important position among many management models of enterprises. Especially with the emergence of new technologies, new products and new services, the split and reorganization of value chain, and the emergence of new customer groups and sales channels, it has brought fierce competition and new business methods. In the past, under the planned economy system, the business models of all enterprises were similar, and they generally knew how to do it if they knew what industry it was. Nowadays, the business models of enterprises are very different, and the same catering, fast food or high-end business models are bound to be different. It is no longer possible for an enterprise to make a profit by a single product or a leading technology, let alone by a single idea to ensure sustainable development. If an enterprise can produce and continue to make profits, it must rely on systematic arrangement and overall strength, which is the role of business model. Therefore, the competition of enterprises in the future will be the competition of business model, which is also the highest form of competition of enterprises.

3. The essence of business model

Imagine that Apple, which makes IPhone, doesn't make mobile phones at all; Didi, which monopolizes the taxi market, does not own a car; Is the biggest dining platform hungry? There is no restaurant. These business models are all subversion of traditional models. The emergence of every new business model means the emergence of an innovation and a new business opportunity. Whoever can seize this business opportunity first can take the lead in business competition.

the essence of business model is the core logic of creating value for enterprises, that is, grasping the opportunities faced by enterprises, meeting the needs of customers and defining the profit model of enterprises. So business model is the core essence of enterprises, especially entrepreneurial enterprises. The financing of entrepreneurial enterprises needs to prepare a business plan, which is essentially a description of the business model of the enterprise, and it is necessary to explain clearly what to do, why to do it, how to do it, the investment needed and so on. Only a clear and reasonable description of the business model can really impress investors to invest.

4. Description of business model

There are many ways to describe business models, and the most popular one at present is to describe business models through models. Describing a business model with a model is mainly to describe the business elements involved in an enterprise and the relationship between them as a model, that is, to conceptualize and abstract the business activities of an enterprise. This method can not only sketch the overall and systematic view of the business model, but also organically relate all the elements involved in the business model and clarify the relationship between the elements.

at present, the mainstream business model is the business model canvas theory put forward by Alexander Osterwalder and Yves Pigneur in Business Model Generation and Value Proposition Design, which describes the business model of an enterprise with nine different modules.

the nine modules of the business model canvas are defined as follows, and the relationship of each module is shown in figure 1.

figure 1 business model canvas

it should be noted that the purpose of business model is to make enterprises profitable, but there are also some organizations and enterprises whose strategic objectives are not profitability. For example, the Red Cross can still conduct business model analysis for such organizations or enterprises, but at this time the value focuses on realizing the mission and vision of the organization and enterprises. The core value of the Red Cross can be roughly summarized as delivering the received donations to the most suitable people as safely, quickly and conveniently as possible. Therefore, the analysis of the business model of the Red Cross, including customers, partners and channels, should focus on this core value.

second, the business model

the business model is another way of expressing the business model in some documents and materials, and the definition and connotation of the two are completely consistent.

to be more accurate, the phrase "business model" is mostly used in English, and it is more accurate to translate it into "business model" literally, but most of the words in Chinese are translated into "business model", so we only need to know that "business model" = "business model".

iii. business mode

business mode is a method for an enterprise to define and analyze all business elements and their relationships from a global and holistic perspective. The business model is partial, unitary, and the analysis of business elements within a certain range. For example, the procurement mode of enterprises, some enterprises adopt the centralized procurement mode, which requires bidding for a large amount and asking for price comparison for a small amount. These measures play a great role in reducing procurement costs and controlling procurement quality, but they cannot determine the overall income, expenditure and profit of enterprises, so we call them "procurement business mode" rather than procurement business mode.

There are many similar business models, such as centralized R&D in R&D field and collaborative R&D with R&D institutions in many places; Centralized procurement and decentralized procurement in the procurement field; Independent production and outsourcing production in the production field; Direct selling and distribution in sales field; Centralized management and decentralized management in the financial field; Outsourcing and centralization in the IT field are all different business models.

iv. business scenario

a business scenario is an analysis method for a specific business or process, which mainly focuses on the operation logic of a certain type of business or a certain group of processes in a specific environment.

the reason why business scenario analysis process is adopted is mainly because different product types and even the same product may have different business processes at different life cycle stages. For example, for the same product, according to different customer needs or periods, the manufacturing process may be divided into make-to-order production, make to stock and so on. Therefore, the business process must be analyzed in different scenarios in order to verify the rationality of the process and optimize and improve it in combination with business scenarios.

in architecture design, business scenarios can also verify the granularity and accuracy of business components (CBM) in business architecture. By defining the services and interfaces of business components, different business components are connected through interfaces, thus forming a business scenario in which business components run. The business scenario first describes the big images of all related business components; Secondly, if there are business components that cannot be connected, or the connection of business components spans different levels, it means that the scope or definition of business components is not accurate enough, so as to proofread and verify business components.

for the business scenario design of business components, we must first clearly define the elements of business components, that is, purpose, activities, resources, governance and services. On the basis of accurately describing the input and output data content, interface forms and service objects in business services, different business components are connected with each other through interfaces, thus forming a complete scenario diagram of the operational logic relationship of business components. See Figure 2 for the connection diagram of business scenarios.

figure 2. business scenario concatenation diagram

in particular, the main purpose of business scenarios is to analyze the problems existing in the process of realizing enterprise business operation and verify the accuracy and completeness of business components, so the concatenation process of business scenarios is allowed to be colored with TO-BE, so as to facilitate marking problems and proposing gaps.

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