Case Study
Business Model Dynamics
Conception and Development of an Interactive Experience for Business Model Storytelling
Client
BMW Group
Industry
Education
Timeframe
2017
Services
Concept
Prototyping
Software Development
Consulting
Technologies
PHP
JavaScript
Context
Communicating Business Case Scenarios via System Dynamics
System dynamics is a methodology used to study complex systems and their nonlinear behavior, and is applied in fields as diverse as economics, healthcare, and transportation. Scholars and practitioners employ tools such as causal loop diagrams to analyze systems with "dynamic complexity" and understand the relationship between interventions and unexpected outcomes. The methodology is particularly useful in business and entrepreneurial decision making, as it allows essential drivers of a business case to be represented and tested for experimentation and scenario validation.
Challenge
Visualizing Business Model Design Choices and Consequences
Differentiating between value creation and value capture activities of a business model may foster understanding of the key drivers of its performance. Any business model may thus be understood as divided into sets of design choices and their resulting consequences – and, as a set of relationships, may be visualized in the form a directed graph diagram. In specific, the creation of virtuous cycles as the most impactful, yet rarely considered aspect of business model design, may only be surfaced from a perspective of causality and relationality. The developed tool addresses this challenge and enables the visualization of business model choices and consequences.
Results
Empowering the Exploration of Business Model Narratives
A business model of one of the client's corporate units is described using entities and their relationships in a directed graph diagram. This approach focuses on the causal structure of the focal business model, revealing the underlying cause-and-effect relationships in decision making. Each entity is described in detail with curated contextual material, allowing interactive exploration of the network and understanding of consistency and fitness within the business model.
Highlights
Anchoring Business Model Dynamics in Organizational Practice
- Development of a tool for narrative and interactive communication of business models applied to real-world contexts
- Integration of a browser-based modelling framework to illustrate and parametrize system dynamic models alongside the narrative
- Conception of a tool to focus managerial attention on endogenous design choices and their consequences in scenario-based evaluation of business models
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