Task 6

Over the past few years, bbusiness modelsQ have
surged into the management vocabulary. In the
mid-1990s,bdot-comQ firms pitched business models
to attract funding. Now, companies of all sorts in
virtually every industry rely on the concept as well;
in fact, approximately 27% of Fortune 500 firms
used the term in their 2001 annual reports. The
media have certainly gotten on board also. Within
major magazines and journals, only one article in
1990 used the term bbusiness modelQ three times or
more; by 2000, well over 500 articles fell into that
category.
While it has become quite fashionable to
discuss business models, many executives remain
confused about how to use the concept. For
example, in a recent Accenture study, in which
one of the authors took part, 70 executives from
40 companies were interviewed regarding their
company’s core logic for creating and capturing
value: the basis of a business model. Surprisingly,
62% had a difficult time describing succinctly how
their own company made money (Linder & Cantrell,
2000), and it appears that Sun’s executives
may be similarly confused. Strategist Michael
Porter (2000) has referred to the phrase bbusiness
modelQ as part of the bInternet’s destructive
lexiconQ; we disagree. We believe that business
models can in fact play a positive and powerful
role in corporate management. Before exploring
that role in more detail, it is first necessary to
understand exactly what constitutes a business
model.
1. What causes poor leadership?
2. How to set clear goals?
3. How can organization structure facilitate development business model?
4. How can leader effectively communicate strategies in organization?