COMPONENTS OF AN EFFECTIVE BUSINESS MODEL

                   Although not everyone agrees precisely about the components of a business model, many agree that a successful business model has a common set of attributes. For example, one team of academics thinks of a business model as a coordinated plan to design strategy along three vectors: customer interaction, asset configuration, and knowledge leverage.9 Similarly, a noted business professor and writer, Gary Hamel, believes that a business model consists of four components: core strategy, strategic resources, customer interface, and value network.10 We adopt a similar view here and talk about a business model consisting of the following components:

• Core strategy (how a firm competes)
• Strategic resources (how a firm acquires and uses its resources)
• Partnership network (how a firm structures and nurtures its partnerships)
• Customer interface (how a firm interfaces with its customers)

                   Each of these components has several subcomponents; we provide a summary of each component and its respective subcomponents in Figure 6.3.