Designing competitive business models: Why and what?

WhyThe first (obvious but still too often forgotten) strategic challenge of a successful business model is to address somebody’s problem. It must demonstrate that potentially enough people out there have a problem and that the problem is painful enough for them to be ready to both adopt and pay for a new solution.

whymeThe second strategic challenge of a successful business model is to be better positioned than others. The innovators and their organization must demonstrate that they could address a relevant problem or meet a need better than the available alternatives, based on their scope as well as their scale, unique assets and/or agility.

Fig_4_9On the other hand, the first operational challenge of a successful business model is to conceive an initial value proposition, which some people will actually be ready and able to find, adopt and pay for. What will be on the first invoice?

Fig_4_10The second – and too often forgotten – operational challenge of a successful business model is to set up, integrate and scale up over time a competitive value chain, including the right design, operations, client management and support activities.

Bibliography

Strategy: Why? Addressing somebody’s problem

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Strategy: Why us? Being better positioned than others

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Operations: What could be sold? Designing the value proposition

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Operations: What could be done? Assembling a competitive value chain

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  • (Article) Porter, M., & Siggelkow, N. (2008). Contextuality within activity systems and sustainability of competitive advantage. The Academy of Management Perspectives, 22(2), 34-56.

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