How do you use business model canvases to visualize and compare different scenarios?

Scenarios can be used to anticipate challenges, identify opportunities, and develop strategic responses. They help organizations prepare for various outcomes and make informed decisions based on different potential futures. Scenarios can range from best-case scenarios, where everything goes as planned, to worst-case scenarios, where unforeseen challenges or disruptions occur. In essence, scenarios provide a structured way to think about the future and develop strategies that are robust and adaptable to different circumstances. They are a valuable tool for risk management, strategic planning, and decision-making in complex and dynamic environments.

scenario analysis is a critical tool in strategic planning, especially in today's rapidly evolving market landscapes. By simulating various future states, businesses can proactively assess the impact of diverse variables, such as new market entrants, regulatory changes, or technological advancements. This approach not only aids in risk mitigation but also in identifying latent opportunities. The key lies in constructing scenarios that are both plausible and challenging, pushing the boundaries of conventional thinking. This ensures a comprehensive evaluation of strategic options, fostering agility and resilience in decision-making processes.

A scenario refers to a plausible and often hypothetical description or narrative of a future situation, event, or set of circumstances. It is a tool used in various fields, including business, strategic planning, and risk management, to explore potential outcomes and better understand the implications of different variables or decisions. Scenarios help individuals and organizations anticipate and prepare for a range of possibilities, fostering strategic thinking and adaptive planning. By constructing narratives that outline alternative paths, scenarios enable stakeholders to assess the potential impact of uncertainties, make informed decisions, and develop strategies that are resilient in the face of changing conditions.

These canvases allow us to map out key elements of a business model, such as value propositions, customer segments, revenue streams, and strategic partnerships. In my experience, strategic partnerships have been integral in leveraging business model canvases effectively. For instance, when working with a boutique hotel chain, we used the canvas to explore various revenue streams, including room bookings, ancillary services, and partnerships with local attractions. By collaborating with tourism boards and tour operators, we enhanced our value proposition by offering unique experiences to guests, such as guided tours and exclusive access to cultural events.

a scenario creation process is pivotal for strategic planning. It's essential to start with a clear goal, which acts as the anchor for the scenario. Understanding the market dynamics and customer needs is crucial; this ensures that the scenario is not just internally coherent but also externally relevant and responsive. The next step involves a critical examination of your business model. This includes scrutinizing your value propositions, revenue streams, and cost structures. It's about asking, "What shifts are needed to align with the envisioned future?" This phase often demands innovative thinking and a willingness to challenge the status quo.

To create a scenario, identify key aspects of your business or project that could change, such as customer segments and revenue streams. Consider external factors and market trends. Construct a narrative or use visual tools like the Business Model Canvas to outline potential developments in each scenario. Be detailed but flexible, allowing for adjustments as needed. Scenario creation promotes strategic thinking, aids in anticipating challenges, and provides a basis for informed decision-making in a dynamic business environment.

Scenarios should be designed for a purpose. Let me explain by using a concrete example: Suppose you are at risk of losing your competitive edge and believe a new offering or functionality can help you access a new segment and drive growth. Your goal is to test and validate this assumption. First, describe the key activities needed to support the initiative. Next, assess how this initiative would change your current engagement methods. Then, review which current channels and touchpoints will support this new offering. Update your business model based on this scenario and assign it a version number. Identify external dependencies and risks, and perform a stress test on your existing and new business models to ensure resilience.

For understanding or creating a scenario, the best is to start with all the components - that impact or affect your business in a positive or negative way. These factors can be either internal or external to the organization. External factor such as a change in government policy or an inflation or even a global war. Internal factor could be your cost structure, unrest with your labours, etc. It would be wise to document these components (variables), indicators that could get impacted, and direction of impact. Basis this, you should be able to create scenarios to test - if occurrence or absence of an event that impacts your business/team/product/operations is a positive thing or negative for your company.

Scenarios are ALWAYS external to the organization. Consider a dramatic play: scenarios are there, no matter what actors say and do. Their only possibility is to interact with scenarios the best way they can.

the business model canvas is a dynamic tool, crucial for visualizing and stress-testing new scenarios against an existing business model. Your approach of using distinct visual elements like color coding or separate canvases is effective in delineating current operations from proposed changes. This method enhances clarity, especially when communicating complex shifts to stakeholders who may not be deeply involved in the strategic planning process. However, it's vital to remember that while visual differentiation aids in understanding, the real value lies in the rigorous analysis behind these changes. Each alteration on the canvas should be backed by robust market research, competitive analysis, and financial projections.

To visualize a scenario with a Business Model Canvas, pinpoint the changes you want to explore, like shifts in customer segments or value propositions. Populate the canvas blocks, using visual cues to highlight alterations. Compare the scenario canvas with a baseline for clarity. Engage your team in discussions, assess trade-offs, and iterate as needed for alignment with strategic goals. Regular updates keep the scenario responsive to evolving dynamics.

The success in using a business model canvas to evolve scenarios starts with the diversity of talents and perspectives included in the exercise. General scenarios can be cultivated and sorted out from top level discussions. Synthesizing the scenarios into actionable dimensions requires listening to the broadest diverse perspectives contributed for a scenario, then molding the scenario further by risk and reward analysis. Visual mind mapping with the canvas helps document the iterative ideation and distill the results in sequences. Strategic Doing tools can help diverse groups with this distillation and planning. (Google “strategic doing” to access the book and tools.)

In my case, I use different canvas for different scenarios. Then I engage in what I call a 'business model war,' creating a fierce battle among them, and only one survives. HOWEVER, with that being said, I keep the defeated ones in the archive because all the insights you discard now could be very beneficial in future stages of the business.

While focusing on customer value, growth potential, and alignment with vision and mission is crucial, considering the evolving market trends and competitive responses can add a critical dimension to your analysis. This involves not just looking at the current state, but also anticipating future market shifts and how competitors might react to your moves. Additionally, integrating a more dynamic view of resource allocation and capability development can refine your assessment of feasibility and sustainability. This holistic view ensures that the chosen business model not only fits today’s needs but is also resilient and adaptable in the face of future market changes.

One thing I've found useful is the business model assessment by Strategyzer. Just google for "7 questions to assess your business model design" This will help you to assess how different business models performe under different scenarios and what are the pros/cons of each business model. However, these questions may not be as effective for comparing various business models as they primarily concentrate on analyzing the current state of a business model and potential scenarios that could unfold.

I would never ask myself which scenario creates the most value for customers and the business. Instead, I would save that time and directly approach the buyer persona defined in the canvas and ask them. With that information, I will pivot the business model or move forward to execute it.

You don't tell your business idea when sharing your canvas; instead, you demonstrate how an existing need is solved. Regardless of whether your idea is good or bad - you can even depart from any block of a business model canvas without having an idea - you construct a problem-solving system expressed in the format of a business model canvas.

Additionally, strategic partnerships with technology providers enabled us to innovate our revenue streams through digital platforms, such as online booking portals and mobile concierge services. This integration of technology not only improved operational efficiency but also enhanced the overall guest experience, leading to increased revenue and customer satisfaction. By incorporating strategic partnerships into business model canvases, hospitality management consultants can visualize and compare different scenarios more effectively, identify new revenue opportunities, and create value for both the business and its customers.

- Market development - Trends - Customer behavior All these factors should be understood thoroughly to have a good understanding of the scenarios in the short and long term.

In both extremes, you have the business plan on one side and the business model canvas on the opposite side. While business plans require months of research, scenarios, collateral documents, and 100 pages, the business model canvas, in contrast, is a one-pager that should take 1 hour to complete. It shouldn't include market research information or complicate things with scenarios; it should always remain very simple and fast. This is the main reason why authors created this disruptive format: they aimed to keep things very simple to enable quick execution.