As a business owner, it is crucial to know the Business Model Environment. For a company to succeed, a business must operate within an environment that allows them to prosper and thrive.
A thorough study of a foreign market using a fundamental approach will reveal the changes you need to make to your company model and go-to-market strategy to compete successfully in the market.
What are the four business model environment forces?
We’ll look at the Business Model Environment to learn more about this.
This discusses four aspects that we have no control over, which might help or hinder our notion.
Key Trends:
The “Key trends” block is used to see if your Business Model Canvas capitalizes on current market trends. Some of the key trends include:
- Regulatory Trends
- Socioeconomic Trends
- Societal & Cultural Trends
- Technology Trends
The following are some possible questions to ask about the trends element of the business model environment:
What are the most critical concerns that are influencing the customer landscape?
Are there any peripheral segments that deserve attention?
Where are the most unmet client demands?
Market Forces:
The “Market Forces” block’s goal is to ensure that your model is up to date with the changing needs of your chosen consumer segment. Some of the market trends include:
- Market Issues
- Needs & Demands
- Market Segments
- Revenue Attractiveness
- Switching Cost
All concerns relating to the size and nature of demand for your products and services are included in market forces. Assuming that clients in a foreign market have the same qualities as customers in your local market can lead to huge blunders, lost investments, and missed opportunities, according to experience.
When entering a new market, the following are essential factors to consider:
What is the size of the market for your goods and services?
Is this market expanding, flattening, or contracting?
Is your product or service valued differently in the new market than it is in your home market?
Industry Forces:
All concerns related to the supply of products and services similar to yours are included in the industry forces. All of your potential consumers in a new area are operating their businesses without your product or service, so it’s reasonable to suppose that you’ll face competition and that your customers will have substitute options. Some of the industry trends include:
- New Entrants (insurgents)
- Competitors (incumbents)
- Stakeholders
- Substitute Products & Services
- Suppliers & Other Value Chain Actors
Stakeholders are people in your organization that have a say in your business strategy but aren’t clients. Your new employees, shareholders, labor unions, industry groups, lobbyists, the government, analysts, consultants, and the media are all examples of stakeholders.
The industry forces also include how customers are served and the influencers, organizations, and media involved in these domain concerns.
When entering a new market, the following are essential factors to consider:
Who are your most direct competitors in the segments you intend to target?
What are the advantages and disadvantages of these rivals?
Is there enough room for your value proposition to be appealing to the market despite its flaws?
Macro-Economic Forces:
Macro-economic forces are inherently unpredictable and subject to rapid change. As a result, macro-economic variables should play a minor role in your decision to join new markets. Achieving any critical position in a new market takes at least 3 to 5 years, and macro-economic conditions may have altered dramatically over that period. Some of the macro-economic forces include:
- Global Market Conditions
- Commodities and Other Resources
- Economic Infrastructure
- Capital Markets
The following are critical factors to consider:
Who are the most influential players in our industry? What are their advantages and disadvantages in terms of competition?
What business model traditions do alternative products have (for example, mobile phones vs. cameras, high-speed trains vs. airplanes, Skype vs. long-distance phone companies)?
Conclusion
There are many ways to create a business model environment and to make it work for you. You don’t need to know everything, but having a basic knowledge of some of the fundamental factors and processes will allow you to map the environment, map your own goals and aspirations and map the environment of competitors.
