Business Models Practically Explained

24 Jan 2018

Can you describe your organisation's business model? By that we don't mean can you describe what 'activities' your organisatiion engages in to provide products or services to customers. We mean can you describe the inter-relatioships between what stakeholders want, what you create to satisfy those wants, how you deliver those wants and how then you capture and ration value to stakeholdes, equitably and transparently. In this Global Consultationn the CGMA seeks to help organisations develop greater clarity around their business model or models, improve their understanding of how value is created and shared with stakeholders; and improve their understanding of 
the potential impact of changes in the external environment. ''The need for greater understanding is largely driven by so-called ‘megatrends’ such as globalisation and digitisation, which have made new business models possible and old ones redundant at an accelerating rate''. Organisations are having to contend with new competitors and other changes, emerging from unexpected sources. Because this reason, understanding the business model and its dynamics is crucial for long-term value creation. At its heart is the value created for the customer'' The Soluxr response to the CGMA consultaion places emphasis on (1) enabling organisations assess their performance against the CGMA Business Model Framework (2) Two addditional 'Lens" of Organisational Agility and Risk Appetite and (3) Dropping the term 'Risk' in favour of what we believe to be the more appropriate term 'Uncertainty'. We commend the CGMA for its leadership in taking this much needed initiative and indeed for the leadership they are providing in this and related sphears.

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