According to Drucker, entrepreneurs should only be working on improving, expanding and renewal of their business to remain competitive. The problem is that all three activities take place at the same time and can have conflicting interests. Thinking in business models helps aligning these activities and make sure they all contribute to the same goal, the survival of the organisation.

 

Improving

Improving your business often focusses on cost reduction, increased quality of service or better communication with customers and suppliers. The concept of the business model does not change and it is possible to analyse each part of the business model separately to see if improvements can be made.

Expanding

Expanding business is about finding new customer segments, introducing new products or services or introducing new ways of delivering your product or service to your customers. Since this will most likely affect multiple elements of your business model, it is wise to reconsider  your current model.

Renewal

Renewal is the development of your business as if you were a fresh start-up. How would anybody new start a business in your domain today? If you, for example, would start a game company today, would you then build the next-gen console or focus on streaming gaming solutions? It is best to design a new business model without constraints and afterwards check if and how it can be combined  with your existing model.

Business model portfolio

Organising these three activities simultaneously can be difficult and often result in having multiple business models simultaneously. One should manage these as a business model portfolio and consider the similarities and differences between the various models. Based on the similarities, available resources, culture and other variables, business models can be either integrated or implemented in separate business entities.

Bewaren

Improve, expand and renew

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