How is the present crisis effecting your business model?

When a crisis like the coronavirus pandemic hits a business organisation, its executives need to assess the impact on their business model, both immediately and over the long term. But how can this be done? I will try to give you some pointers, you can call it a template, of what you need to assess to see how your business model is being effected and most importantly how it needs to be changed, based on an evaluation of risks and opportunities.

Every business model in the world is built on four core dimensions, These are:

  1. Customers
  2. Value propositions
  3. Value demonstrations
  4. Capabilities

Besides analysing the effect the crisis is having on each of the above, you then need to analyse the connections between these dimensions. Finally you need to define the realistic objectives for your organisation, during and after the crisis. Let’s go through this in more detail.

The Four Dimensions
First, you need to assess what the crisis means for customer demand. Will overall demand go up or down? How will spending patterns change ? Do you need to consider new delivery channels (e.g., switching to online)? Are there any new customer groups to consider (e.g. people who need IT training as they are now forced to use it)? And finally, does the virus create safety concerns (e.g., if you sell services that must be performed face to face)?

You also need to think through how the crisis affects your value proposition. For example, let’s look at my sector, the consulting sector. The needs of my customers have not been changed by the coronavirus crisis — businesses always had issues that needed to be sorted, change that needed adaptation, targets to be met, strategies to be developed and executed. But the reality surrounding my clients has changed, since if businesses had to close down partly or fully, taking a big hit in their revenues, as a business advisor I also need to rethink how I can create value to such businesses and how I can differentiate myself from my competitors in doing so. This logic holds for any business out there. How can you adapt your value proposition in these times if you are a car mechanic or a white goods retailer? Can you use this crisis to enhance your value proposition to offer more than others are doing in the market?

Value demonstration is used to describe a business organisation’s sales and marketing channels. The current crisis, with its restrictions on personal interactions and travel, shuts down typical value-demonstration channels such as customer meetings, business meetings, conferences etc…. Do you need to find new ways to demonstrate value? Some businesses are adapting fast and using the crisis as the rationale for faster adoption of video conferencing software and online sales and marketing materials. It’s a good time to be a website developer.

Finally, the capabilities found in any business organisation are the fuel that drives the engine, allowing your firm to create value for customers. A crisis may put a strain on your capabilities — and it may also require that you prioritise different capabilities than usual. For example, many businesses I speak too are realising that suddenly time spent on IT support for tools like video conferencing has suddenly shot up. Employees’ typical levels of performance and productivity will be affected by the move to home offices, restrictions on travel, and illness.

Aligning the Elements
Once you’ve assessed where you stand on the four dimensions of your business model, you can think through how potential changes in one dimension can be aligned with the others. Which customer segments value which of your offerings, and will that change because of the crisis? Customers who usually love eating in a restaurant may be willing to transition to take-away purchases, for example. Or food-delivery firms may find that home-office employees constitute a new customer segment. In a nutshell, a crisis not only challenges the four dimensions of a business model, it also creates opportunities to adjust each of the dimensions and how they relate to one another.

So, how can you move from all this analysis to executing an action plan? Before you decide on any significant changes in the business model, you’ll want to think through how the crisis will affect your performance . What kind of earnings, or losses, will you encounter? Then you need a plan for embracing the opportunities — and managing the damage — that these analyses have revealed.

What is sure that with any major crisis that is always one common lesson – that companies that are proactive and growth oriented, even as they shore up their vulnerabilities, will have an edge coming out of the crisis.

At EMCS ( we specialise in what we call our “coaching” service, whereby we hand hold our clients and advise them in great detail on their operations, their most urgent strategic decisions and the needed business planning process which every businesses needs to undertake. Feel free to drop me an email on to learn more.

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