By listening to your customers and analyzing the market you hope to enter, you've developed a strategy that will hopefully allow you to maintain a sustainable, competitive position. For instance, maybe you've developed a variety based strategy like Jiffy Lube, who identified the subset of a particular industry, oil changes, and made sure they positioned themselves to offer this service to virtually every type of customer, regardless of the variation that might require. Alternatively, maybe you've developed an access based strategy in which you serve a specific subset of customers, based on how they're able to access your product. For instance, maybe you target small towns like Carmike Cinemas does, or maybe you target internet consumers, like Amazon. Regardless of the strategic identity you've developed, what's ultimately going to dictate whether your strategy can be effectively implemented, will be your ability to translate the strategy into a workable business model. A strategy by itself is just a nice slogan. A thoughtful strategy that drives key activities, results in a sustainable, successful enterprise. Working through your business model will force a clarity of thought, showing you whether your strategy is actually consistent, while making clear the strategic initiatives you'll need to implement. It will also allow you to formulate new strategic alternatives, as technical weaknesses are exposed. The key to all of this is the concept of fit. A holistic view, that everything your company does is for a purpose, and your strategic initiatives all reinforce each other. Thinking back to Ikea and its need based strategy, its in-store showrooms fit with its fashion focus, which fits with its modular furniture approach, which fits with its overall brand identity. No one link in this chain is the reason for Ikea's success, but every activity is necessary to ensure its strategy is realized. To develop a language that lets us develop your company's fit, we're going to follow the approach espoused in Business Model Generation, by Alexander Osterwalder and Yves Pigneur. While business model innovation isn't new, Osterwalder and Pigneur introduced the concept of the business model canvas, which will allow us to visually work though the nine building blocks, that as they state, show the logic of how a company intends to make money. It's essentially the blue print for implementing your strategy, and by working it through, you'll be able to identify the activities required to make your strategy a reality. In this module will help you take a first shot at completing the canvas. But you should understand, that in the early stage of developing your big idea, they'll many iterations, and a few very big bumps in the road, before you have a business model with a chance of a success. To use this business model canvas, I recommend printing the canvas out, and use Post It notes to fill in each of its nine elements. This forces your ideas to be concise and clear, while allowing you to easily modify your business model, as the process exposes weaknesses in your strategy, that you'll need to strengthen with new or revised initiatives or activities. Whether you use the Post It note approach, write it on the actual canvas, or use an online tool for business model generation, the key is making sure you fully consider each of the nine elements, as it relates to your strategy. So that your activities will have the fit necessary, for your business to be truly sustainable.
