Business Design Questions

There are several key decisions that must be made when designing a business:

Customer selection (including channel):

  • What are the greatest profit growth opportunities that fall within my planning horizon?
  • Which customers are crucial to those opportunities?
  • What high-value customer opportunity should be targeted?

Value Proposition and Customer Priorities:

  • What are the unsatisfied needs that drive the behavior of targeted customers (what would lead them to switch suppliers or pay a premium)?
  • Does my Business Design deliver differentiated benefits on these priorities?
  • Does it hinder my ability to deliver these benefits?
  • What customer benefits are generated by my business design (vs. my product)?

Profit Model:

  • What profit model(s) does my Business Design utilize to capture value?
  • How does high profit happen?
  • Where will my “Profit Zones” be?
  • How do I maximize share there?

Strategic Control:

  • How do I protect the sustainability of out-year cash flows?
  • Why should the investment community be convinced that my cash flows can be trusted in the out years?

Scope:

  • What activities do I need to do vs. allow value chain partners to do?
  • What assets should I own vs. letting value chain partners own?
  • How can I restrict my activities and assets to the most efficient subset that is required to execute my business design well and retain strategic control?

Economic Model:

  • What kind of pro forma economics does my business design produce?
  • What economics does it have to produce to be successful?
  • How do I distinguish the microeconomics of a new business design from its potential economics at full scale?
  • How do I rapidly test, learn, and adjust for improved profitability of a new business design during its initial 12-24 months?

Organizational Systems:

  • How will our functional organizations need to change to deliver a business design (R&D, operations, go to market, etc.)?
  • How will our performance systems need to change (cultural values, leadership skill sets, human capital, metrics and rewards, etc.)?
  • How will our enabling infrastructure need to change to enable the business design to go forward (balance sheet, planning/learning/ control systems, information architecture, etc.)?

Source:
The Discipline of Business Model Innovation: An Introduction to Business Design
by Adrian J. Slywotzky
Oliver Wyman, 2007

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