The 4-Box Business Model Framework, developed by Mark W. Johnson, is a strategic tool used to describe, assess, and innovate business models. It helps companies rethink how they deliver value to customers and generate profits. The model consists of four interdependent elements:
- Customer Value Proposition (CVP)
Defines how a company creates value for a specific customer segment. It answers: What job does the customer need to get done? What solution does the business offer? The CVP must be compelling enough to attract and retain customers.
- Profit Formula
Explains how the company captures value. This includes the revenue model, cost structure, margin model, and resource velocity. It’s about creating a sustainable and scalable way to generate profits.
- Key Resources
Identifies the people, technology, products, facilities, brand, and equipment that are necessary to deliver the CVP. These are the assets that give the business its ability to perform effectively.
- Key Processes
These are the operational and managerial processes that allow the company to deliver value consistently. Includes rules, metrics, norms, and processes like training, development, budgeting, and planning.
The 4-Box Framework is most effective when used to guide business model innovation or transformation, especially in response to disruptive change or opportunities for growth.