Business Models that Create Value

By: Fatema Fatakdawala
So what’s your business model? And more importantly, is this model the best way for your company to create value for your customers? Every business model has a unique value proposition. In other words, each business’ product/service is marketed in a different way to attract different types of target markets.
Ever since the early 60’s, the idea of the ‘ business model’ was linked to value creation and maintenance.  Back in the old days, the business model framework was based on the value of the final product that gets sold. This made sense when the maker of the product had a proprietary method or economies of scale. Today, it remains close to impossible to analyze the business models of a product or product line of a company without including what competitors and partner companies are co-developing alongside yours.
Based on a  blog by Andreas Constantinou; let’s take Google’s Android product as an example. Listed below are three qualities of this operating system that provide a unique value offering for the customer:
3. Speed of evolution. Google innovates the Android platform at a speed that’s unprecedented for the mobile industry, releasing 4 major updates (1.6 to 2.1) in 18 months. OEMs wanting to build on Android have no choice but to stay close to Google so as not to lose on new features/bug fixes released. The Nexus One, Motorola Droid, HTC G1 and other Experience handsets serve the purpose of innovation testbeds for Google.
5. Gated developer community. Android Market is the exclusive distribution and discovery channel for the 40,000+ apps created by developers; and is available to phone manufacturers on separate agreement. This is one of the strongest control points as no OEM would dare produce a handset that doesn’t tap into the Android Market (perhaps with the exception of DECT phones, picture frames, in-car terminals or other exotic uses of Android). However, one should acknowledge that Android’s acceptance process for Market apps is liberal as it gets – and the complete antithesis of the Apple vetting process for apps.
8. Android trademark. Google holds the trademark to the Android name; as a manufacturer you can only leverage on the Android branding with approval from Google, much like how you need Sun’s approval to claim your handset is Java-powered.
To learn more in an in-classroom environment, don’t miss the Altitude Accelerator’s workshop on business strategy fundamentals coming this November.

Fatema joins the RIC team as the Communications Officer responsible for marketing, social media, event and web management. She is a graduate student pursuing her final year in the Master of Biotechnology program at the University of Toronto Mississauga.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit Altitude Accelerator for more information on how RIC can accelerate your ideas to market.

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