How do you know if your business model is reliable or not? --Business Model Evaluation and Improvement

How to know whether your business model is reliable or not? Then you need to assess your business model, after the assessment we also need to do an improvement.

? Specifically what should be done? Let's take a look at the book "Business Model New Generation" how to say?

First, the assessment of the business model

? Business model assessment will use SWOT analysis to assess the strengths (S), weaknesses (W), opportunities (O) and threats (T) of your business model, and to help you evaluate each module of the business model canvas. Business model assessment involves a cross-assessment of individual elements and a holistic perspective, dividing the business model into four quadrants, where external plus = opportunities, internal plus = strengths, external minus = threats, and internal minus = weaknesses.

? If you use SWOT analysis to evaluate a business model, you need to do a detailed analysis of the nine modules of the business model: key partnerships, key businesses, core resources, value proposition, customer relationships, channel access, customer segmentation, cost structure and revenue streams, and find the opportunities, strengths, threats and weaknesses of each module.

After finding this, you can go to improve. Specifically how to improve us to see the next part: from the perspective of the business model to see the blue ocean strategy.

Second, from the perspective of the business model to see the blue ocean strategy

? The goal of the blue ocean strategy + business model canvas is to increase value while reducing costs. This can be achieved in two ways: cutting or deleting low-value functions or services to reduce costs, and enhancing or creating high-value functions or services that don't have much of an impact on costs. This is the four-pronged action structure of the Blue Ocean Strategy:

? Remove Which elements compete with each other over time?

? Which elements need to be elevated to industry standards?

? What elements need to be reduced to industry standards?

? What elements should be created that have never been discovered or proposed before?

Let's take a look at two classic examples of how Cirque du Soleil has applied the Blue Ocean Strategy's Four Actions Framework to analyze business models from three different perspectives: cost, value proposition, and customer base:

1. Cirque du Soleil

? Cirque du Soleil is a circus that focuses on animal performances and star performances, and its main customer group is the family audience. After doing the analysis through the blue ocean strategy + business model canvas, Cirque du Soleil has sorted out the places they need to improve.

First, the four action framework shows how Cirque du Soleil has "sorted out" the value proposition of the traditional circus business. It shifted its customer base from traditional circus families to fans and more sophisticated entertainers, so it removed high-cost elements such as animals and star performers, while adding other elements such as themed performances, artistic ambience, and selected music. Cirque du Soleil has also created an excellent environment and unique venues by removing star performers, animal performances, aisle discounts and multi-purpose performance venues, which reduces costs and raises ticket prices to bring in more revenue. This is a very successful business case, it is worthwhile for us to learn from reference.

Four actions to structure the content

- Delete star performances, animal shows, discounted tickets in the aisles, and multi-functional performance venues

- Reduce laughter and humor, excitement and thrills

- Enhance unique venues

- Create themed performances, excellent environments, and a wide variety of productions, music, and dance

2. Nintendo's Wii

? Nintendo is a is a globally recognized entertainment manufacturer, one of the three giants of the video game industry, the founder of the modern video game industry, the main business for home consoles and handheld game consoles, hardware and software development and distribution.

Nintendo believes that: game consoles do not need leading capabilities and performance . So through the four action structure analysis, Nintendo's new business model to focus from the "hardcore" fans to the majority of casual players, because casual players require more entertainment, so the company can reduce the performance of the game console, while adding action control features, to create more fun; the abolition of cutting-edge chip development, the game console subsidies and so on. Subsidized game consoles and so on. This has resulted in lower costs and much higher profits.

Four elements of the action plan

- Remove state-of-the-art chip development, new proprietary technologies, high-performance, high-graphics consoles, "hardcore" gamers, game development, console subsidies

- Reduce console production costs, technology development costs

- Maintain unchanged game developers, retailers, and game developers. developers, retail, royalties for game developers

-Manufacturers who create off-the-shelf hardware, technology for motion control, motion-controlled games, fun and team experiences, broader casual gamer and home market, profits from console sales

? Through the above two classic cases, we can clearly see the blue ocean strategy + business model canvas is a good analysis tool, which uses the four action structure of the blue ocean strategy combined with the business model canvas of cost, value proposition and customer groups to analyze the business model, help us to reduce costs, enhance value, so that we can more systematically and comprehensively analyze the business model innovation plan.

? If you also follow the above two analyses, you will be able to know your business model in the end is not reliable, you can also know your business model still need to improve what are the places, so that you do not have to be afraid to go to compete with other enterprises.