Module 3 - Assignment 1 - The external environment and the business model

The external environment that surrounds the business model.

Assignment Resources:

1.  Read the content on this website, and watch the video contained within it, featuring the author of Business Model Generation, Alex Osterwalder who explains why competition is excluded from the canvas:  http://businessmodelalchemist.com/blog/2012/05/competition-is-not-part-of-your-business-model.html Links to an external site.

2. Watch these videos with Osterwalder and Blank as they explain how the canvas works, and what level two use of the canvas involves:

Osterwalder explains how to use the canvas to identify pains and gains by blowing up the canvas: Alexander Osterwalder: Mapping Customer Pains to Value Proposition Links to an external site.

Osterwalder explains level two use of the canvas:   Alexander Osterwalder: Using Business Models to Beat the Competition Links to an external site.

3. What are switching costs?

Assignment Task

When you have completed the reading task and watching the videos, answer the following questions and post your answers to this Canvas assignment

A) Explain what switching costs are, which part of the external business model environment they fall within, and provide  an example. How might this impact your business, if at all? Remember, that in order for someone to switch from a current solution to your solution, the cost of switching (time, energy, resources, trust, psychology etc.) must be less than the benefit the customer will receive by switching to your product or service.

B) Explain what is involved with level two use of the business model canvas

C) Discuss the Macroeconomic environmental force, what the key elements are within it, and identify one macroeconomic factor that could disrupt your business idea.