The “St. Gallen Business Model Navigator” is a tool set for developing business models. Key principles of this tool-set are free thinking (“There are no sacred cows.”), extensive use of creativity techniques, including recombination of possibilities, an iterative solution approach and consistency. Consistency between actual internal capabilities and realistic assumptions about competitive opportunities and customer perceptions of value is particularly important.
The four dimensions of the St. Gallen Business Model Navigator
This navigator focuses on four dimensions: Who, What, How, and Value.
Who: The customer segments
The “who” stands for the definition and delimitation of the customer segments. It is important to decide in the first step to whom the offer should be addressed for which a business model is to be developed. Only when it is clear which customer segments are to be addressed by the offer can their wishes and needs be addressed. Look at the processes of your target customers and the needs of their customers. Think about what is particularly important to your target customers.
What: The offer and the customer benefit
The “what” stands for the definition of the offer and the customer benefit. Following on from the customer needs, in this second step you crystallise product features that are valuable to customers. This is the product design step. Design your offer consistently along the customer needs.
How: The value chain
The “how” stands for the value creation processes to create and market the service. This third step is about specifying exactly which service partners you need to create and market your offer. Consider which skills and capacities you can and want to bring into the service provision process with your company itself. Then specify which complementary skills and capacities service partners need to bring to the table and systematically select your partners accordingly. In this step you also decide on your own depth of added value. If possible, keep strategically important activities in your own hands.
Value: Proof of profitable implementation
“Value” stands for the proof of profitable implementation of the business idea. According to the St. Gallen Business Model Navigator, these four dimensions should always be thought of and developed together. Therefore, when developing the business model, feel free to take a step back and grind the model until it really fits together well. A business model that is developed in iterative loops becomes better, and that means more profitable.
Developing business models according to the St. Gallen Business Model Navigator
The St. Gallen Business Model Navigator is a clear procedural model that systematically guides you through the process of developing a business model. The business model comes up short in many companies. The question of which customers and with which specific offer money should actually be earned can be clearly answered with the St. Gallen Business Model Navigator.
In St. Gallen, 55 patterns for business models were developed, which are components of the St. Gallen Business Model Navigator. These patterns can be combined in a suitable way to form a coherent business model. Admittedly, these patterns are classified according to the primary goal in each case. But it is important to know that the decision for a pattern from oone area, for example “pricing”, has an impact on all other areas if it is to be implemented successfully. Therefore, an iterative approach and an ever further grinding of the chosen approaches are essential for a good business model.