10654530062?profile=RESIZE_400xAll firms have as their strategic goals accelerating growth and performance while simultaneously adding value for customers.

Although it is common for managers to place a strong emphasis on financial success, competent managers actively seek out new possibilities to generate value.

If handled wisely, Business Model Diversification enables value generation and may help managers improve performance and broaden the enterprise's objectives.

Any sustainable organization is built on a system of symbiotic organizational efforts to create and extract value—its Business Model.

Business Model Diversification, or the use of several business models for value creation and revenue generation, has become a vital goal for firms hoping to maintain a Competitive Advantage in today's fiercely competitive business world.

Businesses with industry-breakthrough growth vary their Business Models utilizing strategies like Business Model Innovation (BMI), a technique that simultaneously affects both the fundamental business model and the value offer to clients.

BMI is a potent but underutilized instrument that may generate breakthrough development inside the core business of a company.

According to Michael Porter, strategic diversification is about combining activities that efficiently relate to and mutually reinforce one another, forming a system of activities, as opposed to a collection of isolated activities.

It takes a methodical approach to determine which activities fit together inside a Business Model and which activities might be synergistic across Business Models.

MIT Sloan Management Review research developed a methodology for evaluating the effectiveness of diverse Business Models. The methodology helped with the analysis of the Formula 1 car racing sector, the several businesses operated by Amazon Inc., and almost 50 other enterprises.

The following 3 questions served as the foundation for this study:

  1. What factors need to be considered while thinking about Business Model Diversification?
  2. How can a new Business Model's value be evaluated and optimized so that it may be added to the portfolio?
  3. How can the portfolio of Business Models be enhanced over time?

An 8-step approach that takes into account the complementarities in a portfolio of Business Models was created to address these problems. The Business Model Portfolio's multiple activities may be divided up and analyzed using the 8 steps. The visual map for a Business Model Portfolio Analysis is made in the following steps:

  1. Identify Business Models
  2. Identify Key Resources
  3. Identify Key Capabilities
  4. Identify Key Performance Indicators (KPIs)
  5. Connect Model to Resources & Capabilities
  6. Identify Interconnected Resources & Capabilities
  7. Analyze
  8. Monitor & Maintain

10654526286?profile=RESIZE_710x

These steps make it possible to visualize the connections between various methods and competencies and their impact on Performance, enhancing the correlation across a portfolio of Business Models.

The following sections go through some specifics of a few processes necessary to creating a strong Business Model Portfolio:

Identify Business Models

The 1st stage in the 8-step process is to list the Business Models used by the organization.

Identify Key Resources

Find out what important resources, such as money or user data, each business model produces.

Identify Key Capabilities

Find the core competencies that each Business Model produces, such as technical and sales competencies.

Interested in learning more about framework for Business Model Diversification?  You can download an editable PowerPoint on Business Model Diversification here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Votes: 0
E-mail me when people leave their comments –

You need to be a member of Global Risk Community to add comments!

Join Global Risk Community

    About Us

    The GlobalRisk Community is a thriving community of risk managers and associated service providers. Our purpose is to foster business, networking and educational explorations among members. Our goal is to be the worlds premier Risk forum and contribute to better understanding of the complex world of risk.

    Business Partners

    For companies wanting to create a greater visibility for their products and services among their prospects in the Risk market: Send your business partnership request by filling in the form here!

lead