BUSINESS DESIGN 3

Definition
Creating the best and most innovative product or service in the world does not guarantee the success in the market place. Moreover, successful innovators do not limit the differentiation purely on the value proposition, but other elements of a company´s business model (i.e. new customer segments, new revenue streams, new channels, etc.). 

The Business Design Gap describes the situation when: 


 * An innovation is not accompanied by a business model that sufficiently leverages the innovation’s potential. 


 * The business model does not deliver meaningful value to the customer 


 * The business model does not capture enough value. 

Delivering value to the final customer as well as capturing whatever the customer is willing to pay for the value provided is the quintessence of good business model design. Summarizing, you may have a great innovation with huge market success potential but the architecture of how you plan to generate revenues and sustain in doing so by providing value to the right customers might hinder your company in achieving sustainable commercial success. 

<span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family: Arial;color:black;mso-ansi-language:DE;mso-fareast-language:DE">There are three possible situations you might find yourself in: <span style="font-size: 10.0pt;font-family:Times;mso-bidi-font-family:"TimesNewRoman";mso-ansi-language: DE;mso-fareast-language:DE">


 * <span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family: "MenloRegular";color:black;mso-ansi-language:DE;mso-fareast-language:DE">T <span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family:Arial; color:black;mso-ansi-language:DE;mso-fareast-language:DE">he business model captures value from and provides value to the customer but without the anticipated success <span style="font-size:10.0pt;font-family:Times; mso-bidi-font-family:"TimesNewRoman";mso-ansi-language:DE;mso-fareast-language: DE">


 * <span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family: Arial;color:black;mso-ansi-language:DE;mso-fareast-language:DE">The business model does not result in commercial success at all <span style="font-size:10.0pt;font-family:Times;mso-bidi-font-family:"TimesNewRoman"; mso-ansi-language:DE;mso-fareast-language:DE">

<p class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;line-height: normal"><span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family: Arial;color:black;mso-ansi-language:DE;mso-fareast-language:DE">In either of these 2 situations there should be some rethinking. Another likely scenario may be that you believe your business model works out perfectly but instead you miss out a huge piece of the cake and just by doing smaller adjustments the innovation’s potential can be fully leveraged. The business model must increase the potential of your innovation,  protect you from unexpected changes in the marketplace and make it difficult for your competitors to copy your competitive advantage. <span style="font-size:10.0pt;font-family:Times; mso-bidi-font-family:"TimesNewRoman";mso-ansi-language:DE;mso-fareast-language: DE">

<p class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;line-height: normal"><span style="font-size:12.0pt;font-family:Times;mso-bidi-font-family: Arial;color:black;mso-ansi-language:DE;mso-fareast-language:DE">If a business model figures out the right way to provide meaningful value to the customer and at the same time knows how to capture the associated value by doing so will increase the innovation’s commercial success because it leverages the innovation’s attributes.

<p class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;line-height: normal"> When 3M invented an adhesive that was super weak and apparently sensitive to pressure they did not know how to commercialize this invention. For years they tried to figure out a way to make use of this adhesive until they came to the solution that they could produce a board covered with the glue and to which one could pin paper on. But one genius mind found out later, this provided the wrong value. So instead they put the glue on small paper pieces - the Post-Its were born. Your business model may have the correct basis, but when rethinking it you may find out how you can be even more successful in using it.

<p class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;line-height: normal"> <h2 class="MsoNormal" style="margin-bottom:0cm;margin-bottom:.0001pt;line-height: normal"> Diagnostic