16th Book Chunk on Scanning a Business Model's Environment

Here a chunk outlining the external forces driving a business model. External forces were often referred to in the comments on the business model SWOT. We took that into account ...

We hope you appreciate this chunk which outlines the environment and design space in which one conceives a business model.

Like in the last chunk - but here even more important - we'd appreciate comments from "pharma experts". Do we need to add some elements in the pharma example? Does the pharma example look reasonable? What do you think?

Tags: Environment, Pharma

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Hi Alex,

I like the chunk on external environment because without it the BM design process would be non-realistic and hence insignificant. This chunk extends many of the traditional business analysis methods to the business model design area.

As you know, in prior discussions about the definition of business model, we had all converged on a definition that in one form or another involves value creation for three categories: stakeholders (in the traditional sense this includes shareholders, employees and management), the community impacted by the business, and the environment (which represents the externalized natural capital cost not accounted for in traditional BMs). There seemed to also be agreement that if the value created does not benefit these three fundamental categories, the business and its BM could not be sustainable. Gordon Gray has already noted the lack of sufficient coverage for sustainability and socila responsibility aspects.

So reading over chunks 16 and also 15 once again, I still could not fit the modeling of these categories (or more accurately two of the three categories) properly. Some of their elements are included within the components of the environmental scans, but I believe the fundamental value receivers are important enough to warrant a major position and role in the model.

I understand the time pressures for releasing the book, but if you like to include this aspect or discuss further, you know where to get hold of me :+)
Nabil, I would describe the first two aspects you mention in the stakeholder category (I use it in its wider original sense: anybody who has a stake in the organization's actions). An organization's impact on the environment is an outcome of a company's behavior and not part of the environmental scanning. It is thus part of assessment and evaluation (which goes beyond the profit measure - more below).

Of course one could indeed argue that the social responsibility aspect is "under-present" in this book. I prefer it this way for simplicity reasons (which does absolutely not mean I don't think it's important). In the last "business model outlook" chapter we will specifically refer to social entrepreneurship business models and social responsibility. This includes outcome measures that go beyond the single profit measure: triple bottom line etc. I do firmly believe in the importance of this, but think it should be the topic of a separate book.

I will indeed get back to you to further discuss ;-)


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