Topic 1.4: Business and Strategy Model Evaluation

Here, consider how your organisation currently ‘evaluates’ what it does, and how it decides whether it has achieved what it sets out to do. Organisations typically develop a ‘strategy’ – a ‘theme’ that gives meaning and direction to its actions and decisions, typically to achieve a particular set of long-term goals, such as profit, effectively serving a specific client group, solving a specific set of issues etc. For example, The Gates Foundation seeks as one of its objectives, to eliminate malaria. Its business model (at a macro level) is to more effectively apply existing treatments and methodology, especially by targeting specific populations including children under five and pregnant women; to invest in new interventions; and to mobilise support.

Firstly, let’s explore what a business model actually is! A Business model (Osterwalder & Pigneur, 2010) is a description of how an organisation intends to create value in its operating space. An operational business model would include such factors as the products and services offered, the organisation’s ‘image’, its distribution methods, and its people and organisational resources. So overall, a business model specifies how the strategy is implemented in practice, and shows the content, structure and governance of the organisation’s activities (Casadesus-Masanell & Ricart, 2010)^[1].

There are many possibilities for evaluating business models and strategies. You should consider the outcomes of a set of tools and approaches that you have already explored in this and previous units. We propose that you develop an ‘evaluation system’ that is purpose-appropriate for the context. By exploring a variety of approaches, and by having a broad set of ‘tools’, you will build in flexibility into your repertoire.

In a widely cited and dissected strategy article, Henry Mintzberg discusses strategy as a process and of ‘doing’ (Mintzberg, 1994)^[2]. He makes two bold statements:

• Sometimes planning must be left as broad visions, not precisely articulated, to adapt to a changing environment.
• Strategic planning isn’t strategic thinking. One is analysis and the other is synthesis.

As you reflect on the topic of Business Model and Strategy Evaluation, please consider Mintzberg’s two statements in the context of your own experience of business models and strategy.

You were introduced to the Business Model Canvas in Module 5 of GSZ633 Managing Outward in a Networked Environment. Watch this quick video summary of how a Business Model Canvas works to refresh your memory and pay particular attention to the concept of value proposition.

We continue to explore strategy evaluation in Module 6, where we provide a ‘process’ for business model and strategy evaluation, as value delivery mechanisms.