Do You Know that Business Models and Business Development Are Closely Intertwined?
In creating and optimizing a company's growth, both Business Model and Business Development play a crucial role in ensuring the company's long-term success in a competitive market. Here's how they are related each other:
Business Model as the Strategic Foundation
The Business Model serves as a framework that defines how a company creates, delivers, and captures value. It encompasses key elements such as key partners, core activities, key resources, customer relationships, target markets, value propositions, revenue streams, cost structure, and distribution channels. As such, the Business Model acts as the foundation for all business development activities, ensuring that every initiative aligns with the company’s overall strategy.
Business Development as the Strategy Executor
Business Development focuses on exploring and leveraging new growth opportunities, whether through strategic partnerships, market expansion, product development, or other innovations. In this context, Business Development is responsible for implementing and enhancing the established Business Model to maximize the company's growth potential.
Adapting and Refining the Business Model
A key aspect of Business Development is the ability to adjust and refine the Business Model based on market changes and feedback from business development efforts. These adjustments may involve modifying the value proposition, pricing structure, or even distribution strategies to better align with the dynamic market needs.
Measuring Success
Measuring the effectiveness of the Business Model is an integral part of the business development process. By analyzing performance data, companies can assess whether their strategies are driving increased revenue, reducing costs, or strengthening customer loyalty. Business Development plays a critical role in this evaluation process, ensuring that the implemented strategies deliver the desired outcomes.
To help you grasp this concept, read through the following case study:
BlackBerry Case Study
BlackBerry was once a mobile device powerhouse. BlackBerry reached its peak in 2010 with more than 40% of the mobile device market share in the United States [1] and around 18% of the global [2]. Its success was due to popular devices like the Pearl, Curve, and Bold series, along with exclusive services like BlackBerry Messenger (BBM). The company played a key role in enabling remote work by allowing users to access emails on the go.
However, despite maintaining some market presence after the iPhone's launch in 2007 [3], BlackBerry's downfall was largely due to software issues. The company failed to create a marketplace for third-party apps, unlike Apple and Google. Although BlackBerry eventually switched to Android in 2015 [4], it was too late. Other mistakes included clinging to physical keyboards and focusing too narrowly on the business market, while competitors better adapted to consumer demands.
The Transformation
As BlackBerry was squeezed out of the market, it was forced to pivot. BlackBerry's transformation began under CEO John Chen in 2013 when the company shifted from hardware to security [5]. Chen's strategy focused on licensing BlackBerry's brand, integrating its technology into other smartphones, and expanding its software to secure IoT devices. The acquisition of Cylance in 2019 [6] further solidified BlackBerry's focus on cybersecurity, leading to a robust offering of AI-driven endpoint protection and mobile device management services.
BlackBerry also operates a threat intelligence division that monitors emerging cyber threats. Alongside security, the company has a significant presence in IoT, particularly in the automotive sector. BlackBerry's QNX platform is used in over 235 million vehicles [7], providing safety, driver assistance, and infotainment features.
The IVY platform, co-developed with AWS, connects vehicle sensors and uses machine learning to create personalized driving experiences, such as adjusting settings based on the driver's preferences. IVY also enhances security by performing computations at the edge, reducing data exposure. Despite its shift from mobile phones, BlackBerry's commitment to security remains central to its new ventures.
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Analysis
Blackberry's successful transition was driven by strategic business development efforts. It began after recognizing the challenges in the mobile market and identifying new growth opportunities in software, security, and IoT.
These changes greatly affected BlackBerry's business model, such as key activities, market segments, cost structure, revenue streams, value proposition, and key partners. Let's break down those changes:
The Shift from Product Sales to Service Sales
Market Segments
Cost Structure and Revenue Streams
Value Proposition
Partnerships
Conclusion
Business Model provides a strong strategic framework, while Business Development focuses on executing and innovating to unlock the company's potential. Together, they support each other with the primary goal of ensuring that the company continues to grow and thrive in a highly competitive environment.
In BlackBerry's case, business development efforts had led to a great shifting from hardware-centric to software-centric, with a focus on security services and IoT. This change included a transformation in core activities, revenue streams, cost structure, target markets, value propositions, and key partnerships. By making this pivot, BlackBerry has successfully repositioned itself as a leader in cybersecurity and IoT technology, ensuring its relevance in a rapidly evolving market.
References
Aldali Yahsan thanks for sharing. For me, the biggest thing was that blackberry is still alive.. always heard it as a cautionary tale for sleeping at the wheel, never ran across any article before that mentioned this pivot. Inspiring.