Procedure for the Development of a Business Model

How do companies succeed in adapting their business model to changing customer needs, market and competitive situations? – And how can the Business Model Canvas help in this process?

To answer this question, we have developed a course of action for companies and entrepreneurs. With this guide, startups, SMEs and large enterprises can succeed in strategically realigning their business model and adapting to changing conditions. Our process model uses the Business Model Canvas as a strategy as well as an innovation tool and offers an exemplary possibility for the process design of a strategic transformation.

Step 1: Initiation and modeling of the current state

At the beginning of every innovation or reorganization project, the best possible framework conditions must be created in order to increase the chances of success and to avoid early or late project failure.

Especially since the foundation of the process is to be the Business Model Canvas, it makes sense to assemble a team that is not lacking in diversity in preparation for all further steps. Although the use of the Canvas does not require a minimum number of people, it always proves useful to include ideas generated, perspectives conveyed and opinions expressed by a multi-faceted team.

In the context of a strategy workshop lasting several days, the actual status of the business model of the own organization is to be outlined within a Business Model Canvas after successful team finding and communication of the project.

Step 2: Strategic analysis and comparison

The second step is the strategic analysis of the current state. Here, it is worthwhile to think beyond the boundaries of the Business Model Canvas and to include other established strategy tools. As a rule, each strategy tool illuminates other aspects of the company and its environment and ensures a multi-perspective view.

At this point, it is a good idea to include research on possible crisis factors in your own industry. Which crisis companies are there among my direct or indirect competitors? Why are they in crisis? In which fields of the Business Model Canvas can the (probable) causes of the crisis be classified?

The Business Model Canvas enables a standardized, clear comparison of different business models, reduced to the essentials. This makes it much easier to identify problems within elementary building blocks. The comparison of one’s own business model with those of companies in crisis – the same applies to the comparison with successful companies – can provide valuable insights and serve as a catalyst for the generation of ideas.

Step 3: Developing a business model

This stage of the process serves to actively develop or outline a promising business model. It should be ensured that all participants are as open-minded and unbiased as possible during this phase. This point represents the most critical process step, since the result of this step not infrequently has the power – assuming later implementation – to determine the success or demise of the organization.

In the course of the design process, at best a synergetic way of working is established among the group members. This type of collaboration usually unleashes the greatest creative forces of the employees, but also requires a certain inventive and explorative spirit on the part of the employees, since it is a matter of leaving the comfort zone and showing the courage to break new ground. The fact that the whole is greater than the sum of its parts will become most apparent during this process phase.

Step 4: Introduction and implementation

At the beginning of the fourth step, when implementation is approaching, it is important to conduct sufficient internal marketing and to pick up the workforce, since even a minor change to the business model usually has far-reaching consequences for the majority, if not all, of the employees. In the first step, the goal is to create the highest possible level of internal acceptance.

On the basis of the project plan, which was drawn up at the beginning and supplemented in the course of the further process, the implementation is now to be aimed at. Milestones as well as a certain budget must be fixed in writing and adhered to. During the more or less major reorganization of the business processes, the timeline as well as budget and profit expectations must be aligned.