Difference between revisions of "Business Modeling Quarter"

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[[Business Modeling Quarter]] (hereinafter, the ''Quarter'') is the first of four lectures of [[Operations Quadrivium]] (hereinafter, the ''Quadrivium''):
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[[Business Modeling Quarter]] (hereinafter, the ''Quarter'') is a lecture introducing the learners to [[product design]] primarily through key topics related to [[business modeling]]. The ''Quarter'' is the third of four lectures of [[Business Quadrivium]], which is the second of seven modules of '''[[Septem Artes Administrativi]]''' (hereinafter, the ''Course''). The ''Course'' is designed to introduce the learners to general concepts in [[business administration]], [[management]], and [[organizational behavior]].
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*The ''Quarter'' is designed to introduce its learners to [[enterprise discovery]], or, in other words, to concepts related to obtaining data needed to administer the [[enterprise effort]]; and
 
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*The ''Quadrivium'' examines concepts of administering various types of enterprises known as [[enterprise administration]] as a whole.
 
  
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The ''Quadrivium'' is the first of seven modules of [[Septem Artes Administrativi]], which is a course designed to introduce its learners to general concepts in [[business administration]], [[management]], and [[organizational behavior]].
 
  
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==Outline==
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''[[Business Analysis Quarter]] is the predecessor lecture.  In the [[enterprise envisioning]] series, the previous lecture is [[Enterprise Architecture Quarter]].''
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===Concepts===
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#'''[[Product engineering]]'''. The application of scientific principles to designing and/or modifying the [[market exchangeable]].
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#*[[Market exchangeable]]. (1) A solution or component of a solution that is the primary result of a [[project]] or [[operations]]; (2) An article or substance that is produced or refined for sale. Tangible goods such as produce or hardware, intangible items such as [[data]], [[idea]]s, or [[software]], such complex things as places and [[enterprise]]s, as well as [[service]]s, labor, personal time, [[event]]s and other experiences are examples of [[market exchangeable]]s.
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#*[[Product scope]]. All the features and functions that characterize a [[market exchangeable]].
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#*[[Service]]. Any [[market exchangeable]] in a form of work carried out or on behalf of others.
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#'''[[Product vision statement]]'''. A brief statement or paragraph that describes the why, what, and who of the desired software product from a business point of view.
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#*[[Product vision statement]]. a high-level description of a product which includes who it is for, why it is necessary and what differentiates it from similar products.
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#*[[Feature]]. A cohesive bundle of externally visible functionality that should align with business goals and objectives. Each feature is a logically related grouping of functional requirements or non-functional requirements described in broad strokes.
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#*[[Defect]]. A deficiency in a product or service that reduces its quality or varies from a desired attribute, state, or functionality. See also requirements defect.
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#[[File:Product-lifecycle.png|400px|thumb|right|[[Product lifecycle]]]]'''[[Product lifecycle]]'''. The cycle through which [[market exchangeable]]s tend to go through from their introduction to withdrawal or eventual demise.
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#*[[Lifecycle]]. Important phases in the development of a system from initial concept through design, testing, use, maintenance, to retirement.
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#'''[[Marketing]]'''.
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#*[[Marketing channel]].
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#*[[Conversion]].
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#*[[Distribution channel]].
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#'''[[Market engineering]]'''. The application of scientific principles to segmenting and/or development of the [[market]].
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#*[[Segmentation]]. Division into separate parts or sections. In [[enterprise administration]], division of the broad market into separate [[market segment]]s in order to identify [[high yield market]]s.
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#*[[Market segment]]. A group of potential customers who share one or more common characteristics. Marketing professionals identify such a group in order to identify [[high yield market]]s and, if these markets will be chosen as [[target market|target one]]s, craft [[business strategy|business strategi]]es for each of those ''groups''.
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#*[[High yield market]]. Any [[market segment]] that is likely to be the profitable or that have high growth potential.
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#*[[Target market]]. Any [[high yield market]] that the [[enterprise]] selects for its [[operations]] and for which a separate [[business strategy]] is developed.
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#*[[Niche market]]. Any [[target market]] to which the [[enterprise]] tailors its specific [[market exchangeable]].
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#*[[Market share]]. The portion of a [[market]] controlled by a particular [[business]].
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#'''[[Segmentation base]]'''. A customer characteristic used to define [[market segment]]s.
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#*[[Demographic segment]]. A group of potential customers who share some [[biographical characteristic]]s such as age, gender, income, education, socioeconomic status, family size, or marital situation.
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#*[[Geographic segment]]. A group of potential customers who share their physical location or region such as continent, country, state, town or city, suburb, area, postcode, etc.
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#*[[Social segment]]. A group of potential customers who share lifestyle, behavior, and/or social affiliation characteristics.
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#*[[Historical segment]]. A group of existing and/or former customers of the [[enterprise]] with similar buying behavior.
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#*[[Situational segment]]. A group of potential customers whose behavior change based on context and situation such as seasonal promotions.
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#'''[[Business strategy]]'''. A [[strategy]] that determines the behavior of the [[enterprise]] on a particular segment of its [[market]].
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#*[[Growth strategy]]. A [[business strategy]] that's used when the enterprise wants to expand the number of markets served or products offered, either through its current business(es) or through new business(es).
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#*[[Innovation strategy]]. A [[business strategy]] that emphasizes the introduction of major new products and services.
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#*[[Stability strategy]]. A [[business strategy]] in which an enterprise continues to do what it is currently doing.
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#*[[Cost-minimization strategy]].  A [[business strategy]] that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.
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#*[[Imitation strategy]]. A [[business strategy]] that seeks to move into new products or new markets only after their viability has already been proven usually by competitors.
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#*[[Startup pivot]]. The act of a startup quickly changing direction with its business strategy. For example, an enterprise server startup pivoting to become an enterprise cloud company.
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#'''[[Sales]]'''. (1) Selling; (2) [[Enterprise effort]]s that contribute to selling; (3) The amount of [[market exchangeable]]s sold in a given period of time. The seller or the provider of the [[market exchangeable]]s completes a sale in response to an acquisition, appropriation, requisition, or a direct interaction with the buyer at the point of sale.
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#*[[E-commerce]]. The process by which goods and services are bought and sold via the internet utilizing web sites that are virtual stores. Examples include businesses from banking to baked goods and everything on between.
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#*[[License selling]]. A way of granting multiple people access to the same shared software application. An ERP buyer pays a one-time fee for each named or concurrent user to use the software.
 +
#*[[Value-added reseller]] (VAR). A reseller that adds value to an existing software product through the addition of features or services, then resells it to end users.
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#*[[Point of sale]] (POS). The time and place that a sales transaction took place. In [[ERP software]], this is normally the ability to handle retail or counter sales.
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#'''[[Market transaction]]'''. (1) A sale or procurement, lease, assignment, award by chance, any other acquisition or transfer of a [[market exchangeable]]; (2) Transmitting of funds over an electronic network or physically.
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#*[[Business-to-consumer]] (B2C). (1) A [[market transaction]] of sale in which a [[business]] sells its [[market exchangeable]]s directly to individual customers and end consumers; (2) A situation in which a [[business]] targets individual customers with its [[market exchangeable]]s.
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#*[[Business-to-business]] (B2B). (2) A [[market transaction]] of sale in which the vendor and consumer are both businesses, not end consumers; (2) A situation in which a [[business]] targets other [[business]]es with its [[market exchangeable]]s.
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#*[[Business-to-government]] (B2G). (1) A [[market transaction]] of sale in which a [[business]] sells its [[market exchangeable]]s to the government; (2) A situation in which a [[business]] targets the government with its [[market exchangeable]]s.
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#*[[Business-to-employee]] (B2E). (1) A [[market transaction]] of sale in which a [[business]] sells its [[market exchangeable]]s directly to its employees; (2) A situation in which a [[business]] targets employees with its [[market exchangeable]]s.
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#'''[[Business administration]]'''. [[Administration]] of a [[business]].
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#*[[Administration]]. People, process, or period of being in charge of somebody or something.
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===Roles===
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#'''[[Customer]]'''. Any [[stakeholder]] who is a direct beneficiary of usage of a particular [[market exchangeable]]. Ideally, the ''product'' is designed for its [[customer]]s. Usually, [[customer]]s pay for the ''product'' as well. All ''product'' [[customer]]s are product [[consumer]]s.
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#*[[External customer]]. A [[customer]], such as a [[supplier]] or [[client]], beyond the boundaries of the [[enterprise]].
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#*[[Internal customer]]. A [[customer]], such as a [[top officer]], [[manager]], [[subordinate]], [[team member]] or [[coworker]], and/or other department representative, within the boundaries of the [[enterprise]].
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#'''[[Marketing professional]]'''. A practitioner involved in discovery, analysis, design, and development of (a) [[market]]s, (b) [[market exchangeable]]s, and (c) connection of the potential customers to the developed products.
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#'''[[Product owner]]'''. A person who holds the vision for the product and is responsible for maintaining, prioritizing and updating the [[product backlog]]. In [[Agile methodology]], the [[product owner]] has final [[authority]] representing the customer's interest in backlog prioritization and requirements questions. This person must be available to the team at any time, but especially during the [[Sprint planning meeting]] and the [[Sprint review meeting]]. Challenges of being a product owner: (1) Resisting the temptation to "manage" the team. The team may not self-organize in the way you would expect it to. This is especially challenging if some team members request your intervention with issues the team should sort out for itself. (2) Resisting the temptation to add more important work after a Sprint is already in progress. (3) Being willing to make hard choices during the [[sprint planning meeting]]. (4) Balancing the interests of competing stakeholders.
  
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==Outline==
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===Methods===
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''The predecessor lecture is [[Feasibility Study Quarter]].''
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#'''[[Lean startup]]'''. “Lean startup is a term coined and trade marked by Eric Ries. His method advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional product development practices, such as the Waterfall model. It is not uncommon to see Lean Startups release new code to production multiple times a day, often using a practice known as Continuous Deployment.” (Source: Wikipedia) You should note the slight differences between lean and bootstrapping. “Bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (i.e. charging customers), lean startups provide a more tactical approach to achieving those goals through validated learning.” (Source: Ash Maurya) An Example of 3 Stages of a Lean Startup (Source: Ash Maury): 1. Customer Discover (Problem/Solution Fit) 2. Customer Validation (Product/Market Fit) 3. Customer Creation (Scale) Note that a bootstrap and lean startup have differences and bootstrapping does not mean spending any money.
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#*[[Lean]]. Also referred to as: lean manufacturing, lean enterprise, lean production. “The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.” (Source: Lean Enterprise Institute) The definitions and usage of ‘lean’ vary depending on context and application. The origin of the word in business can be linked back to the 90’s. “Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS)”. (Source: Wikipedia) The key focus is around the reduction of waste whiling focusing on delivering value to the customer.
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#*[[Bootstrap startup]]. “Bootstrapping involves launching a business on a low budget. Practically this means that you’ll outsource (most likely offshore) your design and development, you‚’ll rent your servers, you won‚’t have an office and you’ll have no salary. Prior to launch, the only expensive professional services which you’ll buy will be your legal advice and accountancy services. Everything else, you’ll have to pick up yourself and learn as you go along.” (Source: RWW) An Example of 3 Stages of a Bootstrap (Source: Ash Maurya): 1. Ideation (Demo) 2. Valley of Death (Sell) 3. Growth (Build) Note that a bootstrap and lean startup have differences and bootstrapping does not mean spending any money. “Bootstrapping and Lean Startups are quite complementary. Both cover techniques for building low-burn startups by eliminating waste through the maximization of existing resources first before expending effort on the acquisition of new or external resources. While bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (i.e. charging customers), lean startups provide a more tactical approach to achieving those goals through validated learning.” (Source: Ash Maurya)
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#'''[[Make-or-buy decision]]'''. The act of choosing between manufacturing a product in-house or purchasing it from an external supplier.
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===Instruments===
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#[[File:Business-model-canvas.png|400px|thumb|right|[[Business Model Canvas]]]]'''[[Business Model Canvas]]'''. “The Business Model Canvas is a strategic management template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.” (Source: Wikipedia) A business model is a dynamic document that describes how your company creates, delivers and captures value. The 9 Business Model Canvas Building Blocks (Source: Business Model Generation): (1) [[customer segment]]s, (2) [[value proposition]]s, (3) [[channel]]s, (4) [[customer relationships]], (5) [[key resource]]s, (6) [[key activity|key activiti]]es, (7) [[key partnership]]s, and two summary blocks, (8) [[revenue stream]]s and (9) [[cost structure]].
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#[[File:Product.png|400px|thumb|right|[[Marketable]]]]'''[[Marketable]]'''. A [[model]] representing distinguishable components of any [[market exchangeable]], which must include a [[deliverable]], [[product delivery]], and [[product charge]]. Any [[marketable]] is a combination of components of a [[market exchangeable]] that a [[business]] controls in order to influence consumers to purchase this [[market exchangeable]]. Any [[marketable]] includes a (1) [[deliverable]], which can be divided in an [[unpackaged deliverable]] and [[packaging]], (2) [[product delivery]], which may incorporate [[delivery personnel]], and (3) [[product charge]], which can be divided in a [[price]], [[financing]], and acceptable [[payment method]]s.
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#*[[Product delivery]]. The action of delivering [[market exchangeable]]s either ordered or for sale. [[Delivery personnel]] may be important for this ''delivery''.
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#*[[Product charge]]. A payment asked for a [[market exchangeable]]. Not only its [[price]], but also [[financing]] and acceptable [[payment method]]s may be important for this ''charge''.
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#*[[Product presentation]]. The proffering or giving of a [[market exchangeable]] to its potential consumers, particularly, through product manuals, official website, and [[public relations]].
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#*[[Branding]].  The marketing practice of creating a name, symbol, or design that identifies and differentiates a [[market exchangeable]] from other [[market exchangeable]]s.
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#'''[[Purchase funnel]]'''.
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#'''[[Sales funnel]]'''.
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#*[[Targeting resource]].
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#*[[Conversion resource]].
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#*[[Point-of-sale resource]].
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#'''[[Sales driver]]'''.
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#*[[Personal selling]] (or [[face-to-face selling]]). Selling in which the salesperson personally makes a sale or tries to make a sale of a [[market exchangeable]].
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#*[[Sales promotion]]. The techniques to urge a potential customer to buy the [[market exchangeable]]. Most of techniques such as [[money off coupon]]s, [[competition]]s, [[discount voucher]]s, [[free gift]]s, and/or [[point of sale item]]s are designed to be used as a short-term tactic to boost sales. However, some techniques such as [[loyalty card]]s are suitable as a method of building long-term customer loyalty.
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#*[[Advertising]]. The activity or profession of design, production, and commercial placement of [[advertisement]]s.
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#*[[Product publicity]]. The activity or profession of design and production of [[event]]s in order to provoke the notice or attention by the media.
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#*[[Channel partnership]]. Formal or informal partnership of at least two [[legal entity|legal entiti]]es, one of which uses another one's channels in order to design, produce, or sell its [[market exchangeable]]s usually in exchange for some portion of the [[sales]]. This ''partnership'' usually incorporates a co-branding relationship.
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#*[[Word-of-mouth marketing]].
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#'''[[Event marketing]]''' ([[event-based marketing]]).
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#*[[Sneak peek]].
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#*[[Open house]].
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#'''[[Incubator]]'''. An organization that helps develop early stage companies, usually in exchange for equity in the company. Companies in incubators get help for things like building their management teams, strategizing their growth, etc.
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#*[[Ground floor]]. A reference to the beginning of a venture, or the earliest point of a startup. Generally considered an advantage to invest at this level.
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#'''[[Business orientation model]]'''. A model that represents concentrations of a [[business]] on one or more components of its [[market exchangeable]]s, [[process]]es, [[sales]], and/or [[market]]s and [[customer]]s.
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#*[[Product development model]]. Concentration of a [[business]] on one of more components of its [[market exchangeable]]s. In this ''model'', development starts with a product idea followed by months of building to deliver this idea to the [[target market]]s.
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#*[[Process orientation]]. Concentration of a [[business]] on one of more components of its [[process]]es.
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#*[[Sales orientation]]. Concentration of a [[business]] on one of more components of its [[sales]].
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#*[[Society orientation]]. Concentration of a [[business]] on one of more components of [[enterprise environment]]s which this ''business'' serves with its [[market exchangeable]]s.
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#'''[[Customer development model]]'''. Concentration of a [[business]] on one of more components of its [[target market]]s and/or specifically [[customer]]s. In this ''model'', development begins by talking to prospective customers and developing something they are interested in purchasing or using. [[Steve Blank]] and [[Eric Ries]] encourage [[startup business|startup]]s to get early and frequent customer feedback before developing their products too far (in the wrong direction). The four steps to the model are [[customer discovery]], [[customer validation]], [[customer creation]], and [[business building]].
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===Results===
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#'''[[Business model]]'''. The core part of the [[strategic plan]] that suggests how an [[enterprise]] is going to make money in its [[business]]. The [[business model]] usually answers two key questions: how the enterprise is going to earn and how it is going to spend in a particular [[business]] or a group of them. Its [[competitive strategy]] may answer the question about its earning. Its [[business strategy]] may answer the question about its spending. Because an [[enterprise]] can be involved in several businesses, it can have several [[business model]]s.
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#*[[Model]]. An abstraction of reality, a simplified representation of either some real-world phenomenon or a new [[concept]] developed to convey information to a specific audience to support analysis, communication and understanding.
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#*[[Business domain model]]. A conceptual view of all or part of an enterprise focusing on products, deliverables and events that are important to the mission of the organization. The domain model is useful to validate the solution scope with the business and technical stakeholders. See also model.
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#'''[[Product scope]]'''. The features and functions that characterize a product, service or result.
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#*[[Scope]]. (1) The extent of the area and/or subject matter that somebody or something deals with or to whom or which it is relevant; (2) The opportunity or possibility to do or deal with something. In [[project management]], two different [[scope]]s, (a) [[product scope]] and (b) [[project scope]], are widely used.
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#*[[Scope model]]. A model that defines the boundaries of a business domain or solution.
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#*[[Scope statement]]. The scope statement provides a documented basis for making future project decisions and for confirming or developing common understanding of project scope among the stakeholders. As the project progresses, the scope statement may need to be revised or refined to reflect approved changes to the scope of the project.
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#'''[[Business architecture]]'''. A subset of the [[enterprise architecture]] that defines a business' current and future state, including its strategy, its goals and objectives, the [[internal environment]] through a process or functional view, the [[external environment]] in which the [[business]] operates, and the [[stakeholder]]s affected by the business' activities.
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#*[[Business portfolio]]. The collection of [[market exchangeable]]s provided by one [[strategic business unit]]. Many businesses will engage in business portfolio analysis as part of their strategic planning efforts by categorizing the products they offer by relative competitive position and rate of sales growth.
  
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*[[Systematic study]]. Looking at relationships, attempting to attribute causes and effects, and drawing conclusions based on scientific evidence.
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===Practices===
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*[[Technology]]. The way in which an [[organization]] transfers its [[input]]s into [[output]]s.
 
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*[[Service profit chain]]. The service sequence from employees to customers to profit.
 
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*[[System]]. A set of interrelated and interdependent parts arranged in a manner that produces a unified whole.
 
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*[[Business model]]. How a company is going to make money.
 
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*[[Business plan]]. A written document that summarizes a business opportunity and defines and articulates how the identified opportunity is to be seized and exploited.
 
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*[[Competitive advantage]]. What sets an organization apart; its distinctive edge.
 
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*[[Competitive strategy]]. A [[corporate strategy]] for how an organization will compete in its business(es).
 
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*[[Cost-minimization strategy]]. A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.
 
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*[[Disruptive innovation]]. [[Innovation]]s in products, services, or processes that radically change an industry's rules of the game.
 
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*[[Exporting]]. Making products domestically and selling them abroad.
 
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*[[Forecast]]. Prediction of outcome.
 
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*[[Functional strategy]]. A strategy used by an organization's various functional departments to support the competitive strategy.
 
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*[[Open workplace]]. Workplace with few physical barriers and enclosures.
 
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*[[Closed system]]. A [[system]] that is not influenced by and does not interact with its environment.
 
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*[[Cloud computing]]. Refers to storing and accessing data on the Internet rather than a computer's hard drive or a company's network.
 
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*[[Corporate strategy]]. An organizational strategy that determines what businesses a company is in or wants to be in, and what it wants to do with those businesses.
 
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*[[Growth strategy]]. A [[corporate strategy]] that's used when an organization wants to expand the number of markets served or products offered, either through its current business(es) or through new business(es).
 
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*[[Harvesting]]. Exiting a venture when an entrepreneur hopes to capitalize financially on the investment in the future.
 
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*[[Imitation strategy]]. A strategy that seeks to move into new products or new markets only after their viability has already been proven.
 
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*[[Importing]]. Acquiring products made abroad and selling them domestically.
 
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*[[Incremental budgeting]]. Process starting with the current budget from which managers decide whether they need additional resources and the justification for requesting it.
 
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*[[Innovation strategy]]. A strategy that emphasizes the introduction of major new products and services.
 
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*[[Innovation]]. A new idea applied to initiating or improving a product, process, or service.
 
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*[[Innovation]]. Taking creative ideas and turning them into useful products or work methods.
 
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*[[Input]]. A variable that leads to [[process]]es.
 
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*[[Internet of things]]. Allows everyday "things" to generate and store and share data across the Internet.
 
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*[[Idea champion]]. An individual who actively and enthusiastically supports new ideas, builds support, overcomes resistance, and ensures that [[innovation]]s are implemented.
 
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*[[Change agent]]. A person who acts as a catalyst and assumes the responsibility for managing change activities.
 
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*[[Change agent]]. Someone who acts as a catalyst and assumes the responsibility for managing the change process.
 
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*[[Learning]]. Any relatively permanent change in behavior that occurs as a result of experience.
 
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*[[Linear programming]]. A mathematical technique that solves resource allocation problems.
 
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*[[Manufacturing organization]]. An organization that produces physical goods.
 
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*[[Mass customization]]. Providing customers with a product when, where, and how they want it.
 
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*[[Mass production]]. The production of items in large batches.
 
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*[[Model]]. An abstraction of reality, a simplified representation of some real-world phenomenon.
 
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*[[Open system]]. A [[system]] that interacts with its environment.
 
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*[[Policy]]. A guideline for making decisions.
 
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*[[Renewal strategy]]. A [[corporate strategy]] designed to address declining performance.
 
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*[[Stability strategy]]. A [[corporate strategy]] in which an organization continues to do what it is currently doing.
 
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*[[Strategic business unit]]. A single independent business of an organization that formulates its own competitive strategy.
 
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*[[Strategic flexibility]]. The ability to recognize major external changes, to quickly commit resources, and to recognize when a strategic decision was a mistake.
 
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*[[Strategy]]. The plan for how the organization will do what it's in business to do, how it will compete successfully, and how it will attract and satisfy its customers in order to achieve its goals.
 
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*[[Strategic plan]]. A [[plan]] that applies to the entire organization and establishes the organization's overall goals.
 
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*[[Vision statement]]. A formal articulation of an organization's vision or mission.
 
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*[[Vision]]. A long-term strategy for attaining a goal or goals.
 
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*[[Scenario]]. A consistent view of what the future is likely to be.
 
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*[[Service organization]]. An organization that produces nonphysical products in the form of services.
 
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*[[Sharing economy]]. Business arrangements that are based on people sharing something they own or providing a service for a fee.
 
  
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''The successor lecture is [[Strategic Management Quarter]].''
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''[[Project Management Quarter]] is the successor lecture. In the [[enterprise envisioning]] series, the next lecture is [[Effort Engineering Quarter]].''
  
 
==Materials==
 
==Materials==
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==See also==
 
==See also==
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[[Category:Septem Artes Administrativi]][[Category:Lecture notes]]

Latest revision as of 17:16, 6 May 2023

Business Modeling Quarter (hereinafter, the Quarter) is a lecture introducing the learners to product design primarily through key topics related to business modeling. The Quarter is the third of four lectures of Business Quadrivium, which is the second of seven modules of Septem Artes Administrativi (hereinafter, the Course). The Course is designed to introduce the learners to general concepts in business administration, management, and organizational behavior.


Outline

Business Analysis Quarter is the predecessor lecture. In the enterprise envisioning series, the previous lecture is Enterprise Architecture Quarter.

Concepts

  1. Product engineering. The application of scientific principles to designing and/or modifying the market exchangeable.
  2. Product vision statement. A brief statement or paragraph that describes the why, what, and who of the desired software product from a business point of view.
    • Product vision statement. a high-level description of a product which includes who it is for, why it is necessary and what differentiates it from similar products.
    • Feature. A cohesive bundle of externally visible functionality that should align with business goals and objectives. Each feature is a logically related grouping of functional requirements or non-functional requirements described in broad strokes.
    • Defect. A deficiency in a product or service that reduces its quality or varies from a desired attribute, state, or functionality. See also requirements defect.
  3. Product lifecycle
    Product lifecycle. The cycle through which market exchangeables tend to go through from their introduction to withdrawal or eventual demise.
    • Lifecycle. Important phases in the development of a system from initial concept through design, testing, use, maintenance, to retirement.
  4. Marketing.
  5. Market engineering. The application of scientific principles to segmenting and/or development of the market.
  6. Segmentation base. A customer characteristic used to define market segments.
    • Demographic segment. A group of potential customers who share some biographical characteristics such as age, gender, income, education, socioeconomic status, family size, or marital situation.
    • Geographic segment. A group of potential customers who share their physical location or region such as continent, country, state, town or city, suburb, area, postcode, etc.
    • Social segment. A group of potential customers who share lifestyle, behavior, and/or social affiliation characteristics.
    • Historical segment. A group of existing and/or former customers of the enterprise with similar buying behavior.
    • Situational segment. A group of potential customers whose behavior change based on context and situation such as seasonal promotions.
  7. Business strategy. A strategy that determines the behavior of the enterprise on a particular segment of its market.
  8. Sales. (1) Selling; (2) Enterprise efforts that contribute to selling; (3) The amount of market exchangeables sold in a given period of time. The seller or the provider of the market exchangeables completes a sale in response to an acquisition, appropriation, requisition, or a direct interaction with the buyer at the point of sale.
    • E-commerce. The process by which goods and services are bought and sold via the internet utilizing web sites that are virtual stores. Examples include businesses from banking to baked goods and everything on between.
    • License selling. A way of granting multiple people access to the same shared software application. An ERP buyer pays a one-time fee for each named or concurrent user to use the software.
    • Value-added reseller (VAR). A reseller that adds value to an existing software product through the addition of features or services, then resells it to end users.
    • Point of sale (POS). The time and place that a sales transaction took place. In ERP software, this is normally the ability to handle retail or counter sales.
  9. Market transaction. (1) A sale or procurement, lease, assignment, award by chance, any other acquisition or transfer of a market exchangeable; (2) Transmitting of funds over an electronic network or physically.
  10. Business administration. Administration of a business.
    • Administration. People, process, or period of being in charge of somebody or something.

Roles

  1. Customer. Any stakeholder who is a direct beneficiary of usage of a particular market exchangeable. Ideally, the product is designed for its customers. Usually, customers pay for the product as well. All product customers are product consumers.
  2. Marketing professional. A practitioner involved in discovery, analysis, design, and development of (a) markets, (b) market exchangeables, and (c) connection of the potential customers to the developed products.
  3. Product owner. A person who holds the vision for the product and is responsible for maintaining, prioritizing and updating the product backlog. In Agile methodology, the product owner has final authority representing the customer's interest in backlog prioritization and requirements questions. This person must be available to the team at any time, but especially during the Sprint planning meeting and the Sprint review meeting. Challenges of being a product owner: (1) Resisting the temptation to "manage" the team. The team may not self-organize in the way you would expect it to. This is especially challenging if some team members request your intervention with issues the team should sort out for itself. (2) Resisting the temptation to add more important work after a Sprint is already in progress. (3) Being willing to make hard choices during the sprint planning meeting. (4) Balancing the interests of competing stakeholders.

Methods

  1. Lean startup. “Lean startup is a term coined and trade marked by Eric Ries. His method advocates the creation of rapid prototypes designed to test market assumptions, and uses customer feedback to evolve them much faster than via more traditional product development practices, such as the Waterfall model. It is not uncommon to see Lean Startups release new code to production multiple times a day, often using a practice known as Continuous Deployment.” (Source: Wikipedia) You should note the slight differences between lean and bootstrapping. “Bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (i.e. charging customers), lean startups provide a more tactical approach to achieving those goals through validated learning.” (Source: Ash Maurya) An Example of 3 Stages of a Lean Startup (Source: Ash Maury): 1. Customer Discover (Problem/Solution Fit) 2. Customer Validation (Product/Market Fit) 3. Customer Creation (Scale) Note that a bootstrap and lean startup have differences and bootstrapping does not mean spending any money.
    • Lean. Also referred to as: lean manufacturing, lean enterprise, lean production. “The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.” (Source: Lean Enterprise Institute) The definitions and usage of ‘lean’ vary depending on context and application. The origin of the word in business can be linked back to the 90’s. “Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS)”. (Source: Wikipedia) The key focus is around the reduction of waste whiling focusing on delivering value to the customer.
    • Bootstrap startup. “Bootstrapping involves launching a business on a low budget. Practically this means that you’ll outsource (most likely offshore) your design and development, you‚’ll rent your servers, you won‚’t have an office and you’ll have no salary. Prior to launch, the only expensive professional services which you’ll buy will be your legal advice and accountancy services. Everything else, you’ll have to pick up yourself and learn as you go along.” (Source: RWW) An Example of 3 Stages of a Bootstrap (Source: Ash Maurya): 1. Ideation (Demo) 2. Valley of Death (Sell) 3. Growth (Build) Note that a bootstrap and lean startup have differences and bootstrapping does not mean spending any money. “Bootstrapping and Lean Startups are quite complementary. Both cover techniques for building low-burn startups by eliminating waste through the maximization of existing resources first before expending effort on the acquisition of new or external resources. While bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (i.e. charging customers), lean startups provide a more tactical approach to achieving those goals through validated learning.” (Source: Ash Maurya)
  2. Make-or-buy decision. The act of choosing between manufacturing a product in-house or purchasing it from an external supplier.

Instruments

  1. Business Model Canvas
    Business Model Canvas. “The Business Model Canvas is a strategic management template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.” (Source: Wikipedia) A business model is a dynamic document that describes how your company creates, delivers and captures value. The 9 Business Model Canvas Building Blocks (Source: Business Model Generation): (1) customer segments, (2) value propositions, (3) channels, (4) customer relationships, (5) key resources, (6) key activities, (7) key partnerships, and two summary blocks, (8) revenue streams and (9) cost structure.
  2. Marketable
    Marketable. A model representing distinguishable components of any market exchangeable, which must include a deliverable, product delivery, and product charge. Any marketable is a combination of components of a market exchangeable that a business controls in order to influence consumers to purchase this market exchangeable. Any marketable includes a (1) deliverable, which can be divided in an unpackaged deliverable and packaging, (2) product delivery, which may incorporate delivery personnel, and (3) product charge, which can be divided in a price, financing, and acceptable payment methods.
  3. Purchase funnel.
  4. Sales funnel.
  5. Sales driver.
  6. Event marketing (event-based marketing).
  7. Incubator. An organization that helps develop early stage companies, usually in exchange for equity in the company. Companies in incubators get help for things like building their management teams, strategizing their growth, etc.
    • Ground floor. A reference to the beginning of a venture, or the earliest point of a startup. Generally considered an advantage to invest at this level.
  8. Business orientation model. A model that represents concentrations of a business on one or more components of its market exchangeables, processes, sales, and/or markets and customers.
  9. Customer development model. Concentration of a business on one of more components of its target markets and/or specifically customers. In this model, development begins by talking to prospective customers and developing something they are interested in purchasing or using. Steve Blank and Eric Ries encourage startups to get early and frequent customer feedback before developing their products too far (in the wrong direction). The four steps to the model are customer discovery, customer validation, customer creation, and business building.

Results

  1. Business model. The core part of the strategic plan that suggests how an enterprise is going to make money in its business. The business model usually answers two key questions: how the enterprise is going to earn and how it is going to spend in a particular business or a group of them. Its competitive strategy may answer the question about its earning. Its business strategy may answer the question about its spending. Because an enterprise can be involved in several businesses, it can have several business models.
    • Model. An abstraction of reality, a simplified representation of either some real-world phenomenon or a new concept developed to convey information to a specific audience to support analysis, communication and understanding.
    • Business domain model. A conceptual view of all or part of an enterprise focusing on products, deliverables and events that are important to the mission of the organization. The domain model is useful to validate the solution scope with the business and technical stakeholders. See also model.
  2. Product scope. The features and functions that characterize a product, service or result.
    • Scope. (1) The extent of the area and/or subject matter that somebody or something deals with or to whom or which it is relevant; (2) The opportunity or possibility to do or deal with something. In project management, two different scopes, (a) product scope and (b) project scope, are widely used.
    • Scope model. A model that defines the boundaries of a business domain or solution.
    • Scope statement. The scope statement provides a documented basis for making future project decisions and for confirming or developing common understanding of project scope among the stakeholders. As the project progresses, the scope statement may need to be revised or refined to reflect approved changes to the scope of the project.
  3. Business architecture. A subset of the enterprise architecture that defines a business' current and future state, including its strategy, its goals and objectives, the internal environment through a process or functional view, the external environment in which the business operates, and the stakeholders affected by the business' activities.

Practices

Project Management Quarter is the successor lecture. In the enterprise envisioning series, the next lecture is Effort Engineering Quarter.

Materials

Recorded audio

Recorded video

Live sessions

Texts and graphics

See also

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