Answer to quiz: A (the distributor)
A business model is built around the customer.
To identify the customer, follow the money.
The customer is the entity who is invoiced. He's the one who provides the revenue.
In the diagram to the right, ABC is XYZ's customer.
The diagram mirrors the previous page's quiz. Happy Distributing is Jen and Mary's customer.
Ben & Jerry's, now a part of Unilever (NYSE: UN), has always advertised extensively to the end user.
Only 2% of net sales in 2000, however, came directly from the end user. The vast majority of company sales (57% in 1997 and 1998) came from its main distributor, Dreyers (a subsidiary of Nestle (SIX: NESN)). Dreyer's was B&J's Black Widow customer.
B&J understood that Dreyers was its dominant customer. They restructured aggressively to try and break out of the Black Widow trap. Unsuccessful in their efforts, they sold out to Unilever in 2000.
The exercise will be an historical one but a review of Ben & Jerry's 10K filings is interesting on two levels.
It shows how a company's marketing image may be far removed from the issues that drive top management
It shows the lengths top management will go to break out of a Black Widow trap.
To improve your mastery of the business model template: Chickens and Pigs - The Book
