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KSR business models convert innovation to economic value for a business. Business models illustrate the manner in which a company makes money through the identification of its position in the value chain. Models draw on a multitude on business subjects including entrepreneurship, strategy, economics, finance, operations, and marketing.

Simply put, KSR develops business models that describe how a business positions itself within the value chain of its industry and how it intends to sustain itself and generate revenue.

Six Components of a Business Model
  • Value Proposition - a description of the customer problem, the solution that addresses the problem, and the value of this solution from the customer's perspective.

  • Market Segment - the audience to target, recognizing that different market segments have different needs. Sometimes the potential of an innovation is unlocked only when a different market segment is targeted.

  • Value Chain Structure - the firm's position and activities in the value chain and how the firm will capture part of the value that it creates in the chain.

  • Revenue Generation and Margins - how revenue is generated (sales, leasing, subscription, support, etc.), the cost structure, and target profit margins.

  • Position in the Value Network - identification of competitors, complementors, and any network effects that can be leveraged to deliver more value to the customer.

  • Competitive Strategy - how the company will attempt to develop a sustainable competitive advantage and use it to improve the enterprise's competitive position in the market.

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