Simplifying Business Model Innovation
Ever-changing competitive landscapes necessitate that business managers and leaders challenge the way they think about their business and how they can capture and capitalise on opportunities to create value. As such, it is pivotal to have a sense of direction and focus, and one way of mapping out where your business currently is and where it wants to be is to use a business model framework.
What is a business model?
A business model implies a conceptualisation, framework or blueprint for distinguishing a strategy to undertake. It is achieved through mapping out nine basic building blocks that show the logic of how a particular organisation operates, or intends to operate.
In a nutshell, business model mapping makes the implicit thinking behind the business operation/venture explicit and allows the identification of economic value creation opportunities. The goal is to enable the business to take full advantage of the strategic partners, resources, channels and activities at its disposal and to align to customer’s needs with their offering.
What can a business model do for my business?
A key result of the business model mapping process is that management teams will have a compass that allows them to know what kinds of ideas, products/services need to be developed and what types of marketing and revenue generation opportunities are viable. The process of examining assumptions regarding market forces, industry forces, key trends and macroeconomic forces, will by its nature, allow users to get to grip with the complexities which need to be considered in choosing a business model suitable for their environment. It challenges users to consider future scenarios; it is not about copying or bench marking, but about creating new mechanisms to create value and derive revenues.
What is the Business Model Innovation mapping process?
Business model innovation (BMI) is a simple but powerful process which assists companies of all sizes, in any sector, to develop informed and strategic decisions that support the identification of new business opportunities, improve existing business activities, enhance customer perceptions and in turn increase profit margins.
Phase 1: Typically business model design processes commences with description and exploration of the nine building blocks which address the four main areas of a business: customers, offer, infrastructure, and financial viability. Canvas templates are available to download at https://canvanizer.com/
Phase 2: Document and detail competitors and the industry trends, which will assist you in informing which influencing factors can be eliminated, reduced, raised and created in order to create value.
Phase 3: Compile a detailed SWOT (Strengths, Weaknesses, Opportunities and Threats) assessment of each building block based upon the latest up to-date information on customer needs, trends and industry realities. Start with Strengths and Weaknesses to identify where you are now, and then Opportunities and Threats to identify future trajectories.
Phase 4: Innovate and design new strategic business model canvases for your business to serve as a roadmap for developing actionable business strategies orientated towards customers, offer, infrastructure, and financial viability.
RIKON have and continues to provide business model innovation consultancy services to a wide range of companies from a variety of sectors. Our business model services are also covered under the Enterprise Ireland Innovation Voucher funding programme for SMEs. RIKON are equally actively involved in contributing to the evolving body of academic knowledge and theory surrounding business modelling as reflected in our recent publication BUSINESS MODEL STRATEGIES: FLEXIBILITY TRADE IN LOW VOLTAGE DISTRIBUTION NETWORKS