Topic 1 Business model design processes

Business model design generally refers to the activity of designing a company’s business model. It is part of the business development and business strategy process and involves design methods. We can highlight the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high technology entrepreneurship, and changing an existing business model, such as when a furniture company shifts from selling its products to a leasing model.

Business model design (to) refers to the process of crafting a business model when none is in place and business model reconfiguration is the (for) process of changing an existing business model, (also) it highlights(ing) that the two processes are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model. As such, innovating the business model can help coordinate technological and organizational innovations and secure partner networks or capabilities that are required to successfully preserve and utilize the embedded value in resources.

By rethinking the three value dimensions; for example, how value is created, delivered and captured, business model innovation provides a more holistic approach when seeking to align the value creation logic of the company with principles of circularity.

The design of many business models follows a similar process:

  • What information do I need?
  • What is the context (industry, value chain, market)?
  • Who are the Stakeholders?
  • What is my System (including trends, policies, innovation alternatives)?
  • What are my personal and organisational vision and values?
  • How do I obtain the information?
  • Which Methods?
  • What kind of Stakeholder involvement?
  • Which Prioritisation?
  • Value proposition
  • Value Configuration (creating value)
  • Revenue model (capturing value)​
  • Be aware of the hypotheses your model relies upon​
  • Decide in case of trade-offs​
  • Iterate the virtual model​
  • Discuss with stakeholders/experts/customers and potential co-operation partners​
  • Explore additional innovation opportunities​
  • Formulate the narrative that links the elements of the model convincingly.​
  • Testing with external stakeholders
  • Checking minimum viable product (MVP) meets success criteria
  • Identifying challenges and issues
  • Assess risks and opportunities – get prepared (resilience)
  • Think about growth and your next and future business models
  • [Think of it as a minimum viable product – a product or service that has just enough features to test with early customers and provide feedback for future developments.]
  • Regularly challenge your own assumptions and hypotheses – do they still make sense, and will they continue in the future?
  • How can you permanently improve, develop and flourish your business and your stakeholders?
  • Think about your ‘comfort zone’: Do you want to consolidate – or do you want to (continue to) challenge yourself? What about your team and other key stakeholders?
  • What’s your next business model? And do you have a vision for your future business model?