Business Value Models

Different companies use different Business Value Models to measure the value of their businesses. The following are the important modules

  • Balanced scorecard model
  • The Treacy-Wiersema model
  • The Kano model


Balanced scorecard model

The balanced scorecard model defines four scoring areas for business value and was first published by Robert S. Kaplan and David P. Norton in an article, “The Balanced Scorecard – Measures that Drive Performance.” The model was developed as a replacement for earlier systems; those only included the financial perspective to measure performance.

The business scorecard model is an educational, informational, and communication instrument, instead of being a controlling instrument. As the name of the model suggests, it is a balance between the internal and external factors of the company.

Areas present on the scorecard are referred to as perspectives, namely, financial perspective, customer perspective, internal business perspective, and innovation and learning perspective, which are depicted in Fig.


The Treacy-Wiersema model

The Treacy-Wiersema model is very similar to the balanced scorecard model. There are three areas of focus in this model, namely, customer intimacy, product excellence or superiority, and operational excellence.

Fig depicts the Treacy-Wiersema model


The Kano model

The Kano model is narrow in its approach. Its primary focus is on the customer and his/her requirement of products and services from the business. Unlike the above-mentioned two models, it focuses on only two factors, namely, customer perspective and product excellence.

The perspective of operational effectiveness, which is considered in the balanced scorecard and the Treacy-Wiersema model, remain hidden in the Kano model until it has its reflection on the quality of the product and services influencing customer satisfaction.

The Kano model is considered more practical and can be easily implemented in projects. The usual representation of the Kano model is in the form of a graph with a vertical and a horizontal axis. This representation has been depicted in Fig.

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