Business Model Generation Exercise 2: External Factors of Demand

Business Model Generation Exercise 2
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1. The role external factors of demand should play in successful business model
External factors of demand should play an essential role in the provision of a design space therefore, demand should be understood and scanned to help come up with prospective business model alternatives and prototypes that are successful and are for the future.
Continuous scanning of the environment is vital due to the complexity changes in the economic landscape, coupled by uncertainty and market disruptions. The business model according to Rhodes (2013) got its significance from the emergence of the internet, technological innovations and globalization. Understanding changes in external factors of demand helps in the sustainability and flexibility of the business model to shift and adapt to external forces. The external environment is a design space that adapts the business model and its design drivers like technology, customers, needs and design constraints like competitors. Understanding the external demand does not limit creativity of the business model, but it promotes the design choices that inform on the decisions made. In addition, the business becomes sharper and sets new standards for the industry and competitors.
Mapping these external factors of demand on the business model should create an environment where the business understands market needs and creates an analysis of how the market is served and the customer demand. The ability to achieve the concept of value from a customer’s perspective evolves with the changing environment and economic landscape, and it emphasizes on the benefit and cost associated with the product and services that a business offers. Therefore it is an external force that should be analyzed to create changes to the business model and ensure success (Rhodes, 2013). Demand from customers need to be understood on the customers perspective on what they really need, what makes them unsatisfied, what they demand from the business, the status of the demand increase and decline on the products and understanding why the customers` demands are waving.
Rhodes (2013) alludes that superiority in business models comes from understanding the business model from an organization design and strategy and the value creation through customers. The ability of a business to foster value for a customer directly impacts the demand curve and it shapes the adjustability cue and delineation of the business model. The ability to achieve the concept of value from a customer’s perspective evolves with the changing environment and economic landscape and it emphasizes on the benefit and cost associated with the product and services that a business offers. Understanding the external demands portrays a trend that can be predicted in future and makes it easier for generation of successful business models (Osterwalder & Pigneur, 2010; Matzler, 2013).
2. Business model design and innovation
Business model design and innovation is generating a business genius through managing and structuring the business process and controlling the potential of the business. Business model innovation accordin...