Blog Posts Process Modeling

Competition Is NOT Part of Your Business Model

Blog: Business Model Alchimist

Every couple of weeks somebody sends me an email writing that I’m missing a building block in the Business Model Canvas. Often, they point out that competition is missing. They’re wrong. “Competition” is not a business model building block, it’s part of the environment in which you design your business model.

Though I believe we’re too obsessed with competition, it would obviously be naive not to take into account existing or potential competitors when you design your business model. Competition is, however, only one of several elements that are part of your Business Model Design Environment: the environment in which you design your business model, just like an architect designs a building in a particular environment.
The architect’s environment is land use, legal restrictions (e.g. safety regulation, etc.), innovation in materials, the city context, or even societal trends that influence “building tastes”. A business model designer’s environment is characterized by technology trends, competitors, customer jobs and needs, and many, many more, as illustrated in the video below:

Designing business models is a constant interaction between the nine building blocks of the Business Model Canvas, which you control, and the environment in which you are designing it. If you want to learn more about the environmental model my co-author and I came up with, check out page 200+ of our best selling book Business Model Generation.

We came up with this environmental model, because there was no concept out there that looked at the Business Model Design Environment in a simple, holistic, and visual way.

Business Model Design Environment

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