As discussed in my first book on business models, I believe that a business model can be defined in 3 concepts:
- The revenue driver (subscribers, accounts, new locations, distribution and sales people)
- Pricing (15 alternatives)
- Sales and distribution strategy
Yesterday I heard a great example to illustrate point 3, distribution. Before Blockbuster a lady operated a large retail store that sold used videos. In a small corner of the store she sold used games. She noticed that on many days the sales of used games exceeded the sales of videos. Ever the alert entrepreneur, she approached K-Mart and offered to merchandise and supply games to the chain. Eventually this wholesale business went public.
A simple change from retail to wholesale distribution. Others would call this a "revenue pivot". I think it is easier to understand as a change in distribution.
