Albert S Humphrey (1926-2005) who during his work at the Stanford Research Institute developed SOFT analysis that was later developed into SWOT analysis, also outlined an early version of the business model concept in 1968. For a business to be successful, Humphrey defined six inter-related areas which had to be developed simultaneously:
- Products & Services - What are they, how do they work, and when and how should they be improved
- Process - How the products and services are to be made and/or assembled, including subcontracting and purchasing labor and machinery
- Customer - Who will buy the products and services and how will customers be persuaded to buy them
- Distribution - How the product and services be warehoused, transported and delivered
- Finance - Where will the money come from and how will the cash flow be controlled
- Administration - How the organization will be managed, the management style, the organization structure and the people skill required
This was part of TAM (Team Action Management), a step by step method for improving company performance. The inter-related areas above are almost identical to modern definitions and elements of the business model concept. To read more about TAM see this article.