1. Why checking regularly
the business model?
BY STEFANO MARCONI
BUSINESS AND MANAGEMENT
CONSULTANT
1. Introduction
2. External Analysis
3. Internal Analysis
4. Crossing - final step

2. 1. Introduction
Put a pot with a litre of water
on the stove and boil it. When
your water is boiling, take a
frog and put it in the hot
water. The frog will
immediately recognise it will
be boiled and jump suddenly
out of the water
. The frog saved itself from death
Now put frog in the water when
it is still cold and turn on the
stove. The frog will enjoy staying
in the water. It will feel the water
warming, but will not give much
importance to it. Its body will
adapt to the new temperature
and it will still enjoy swimming in
the water. When the water is
close to boiling, if you do not
take the frog away, it will die
slowly. Therefore, please take
the frog away from the water….
In this case, the frog could not
save itself from death.
. You saved the frog!

3. 1. Introduction
 you never should underestimate what is happening around you and your
business.
 What do we tend to underestimate? Weak signals.
 In the second case, the frog underestimates water temperature is increasing
and the fact that its body is adapting to the new temperature. It enjoys
swimming and does not realise it will be boiled. The slow increase of the
temperature is the WEAK SIGNAL.
 In the first case, the frog recognises immediately what is going to happen
because the difference of ambient temperature and water boiling
temperature is quite high: STRONG SIGNAL.
never underestimate weak signals; it is recommended a constant and accurate monitoring of
all that’s happening around you and your business… Usually, only a third person/organisation
could help you identify weak signals and avoid being boiled…

4. 2. External Analysis
The Business Model needs to be consistent with the external environment. What
do we need to check?
 The demand: you need to segment properly the market demand and do it
consistently to what your business offers. Demand segmentation is not a
standard process. The process needs to be adapted to the mission of the
business.
Each identified segment needs to be explored in terms of what they like and
what they expect to receive from you in terms of: product features, logistics
services (delivery time and way), pre- and post-sales services, help desk in
general, etc. The more detailed you are in identifying expectations from each
corner of your offer the better. It is a quite long and delicate step of the
analysis.

5. 2. External Analysis
 Identify any other “actors” involved in the buying process:
◦ Influencers;
◦ Independent sales reps;
◦ Distributors;
◦ Retailers;
◦ Etc.
Each of them needs to be analysed in terms of what they like from you and,
especially, what they expect you to do to satisfy them. Here too, the more
detailed the analysis is the better.

6. 2. External Analysis
 Identify you direct competitors. You should know who they are. Try to identify
what they do and what they do not. Try to put on the analysis table all the
possible information you have. You have many facts and data; “collect them”
as much as possible from your head.
 Identify indirect competitors: are your products/services replaceable by
others? For sure, the answer will be “yes, it is!” Try to identify what indirect
competitors do right and what they do wrong.
 Identify possible new entrants: wear their shoes, try to imagine what you
could do to try to get you away from the business and replace yourself. Maybe
you will not find any possible new entrant, but it is worth to check.
Once you have all these information, make them be usable for further analysis
and thoughts. You will know much more of what is happening in the market….
Moreover, you are ready to go further.

7. 3. Internal Analysis
This step is the crucial one for your business model analysis. You need to check
every details of your offer from the internal organisation point of view:
 What is your product/service design business model? Detail all phases,
 What is your production business model? Batch, just in time, etc..? Detail all
steps for each individual production process,
 What is your marketing activities? Detail it media by media,
 What is your pre sales process and services offer? Detail it,
 What is your order process? Detail it,
 What is your goods delivery process? Detail it,
 What is your post sales service offer? Detail it,
 What is your customer desk service offer? Detail it,
 What is your financial support offer? Detail it,
 Anything else you offer needs to be detailed..

8. 3. Internal Analysis
Once you have analysed properly your internal strengths and
weaknesses, you are a further step ahead to understand
whether your business model is appropriate for the market
or needs to be modified or just adjusted.

9. 4. Crossing – Final step
After having discovered what market expects you to do and what you and
competitors do, you can cross information to see what it is green (you do it
properly), what it is orange (you need to adjust it) and what it is red (you need
either to change it completely by investing consistently or to avoid playing in this
segment)….
You will have the complete picture of what you do properly and what you do
not. This is an analysis that needs to be done continuously and to be adjusted
according to the changes the market faces and the changes of your
organisations. Today markets change quite rapidly and with high impact on
businesses.

10. 4. Crossing – Final Step
This is a job that hardly can be done internally… do you remember the second
frog case? Somebody needs to get you free and safe because weak signals can
hardly be recognised from people involved all the day in the business….
We are here to help you do it….
Stefano Marconi is a former executive now management
consultant. He has a Master University Degree in Engineering
and holds a Master of Business Administration from SDA
Bocconi and University of Manchester
stefano.marconi10@gmail.com +39 3923026794