Introduction
The Business Model Canvas (BMC) is a management tool developed by Alexander Osterwalder to support business model design. It is typically leveraged by new companies to find product market fit or large corporations looking to develop new offerings. When planning for a global expansion companies should treat the new country of expansion as if they were building a new business from scratch. The Business Model Canvas can be an invaluable tool with planning for expansion.
Key Sections
The BMC sections include Key Partners, Key Activities, Key Resources, Value Proposition, Customer Relationships, Channels, Customer Segments, Cost Structure, Revenue streams. Within a global expansion context the most important to focus on is the value proposition, customer segments, channels and cost structure. It is important to align go to market leaders on the importance of utilizing the planning tool in order to not make assumptions. A mistake often made is a company jump straight into selling the current product without considering the launch as a new company.
Assess Current Model
The first step a company planning to expand to a new market should undertake is a detailed review of the business model canvas for its current home market. This can often be an enlightening exercise that has never been done before and can result in insights into the home market. A minimum viable product for a new market can be the current version of the product or service however that should evolve as you gather customer insights. The business model canvas is the best way to contextualize and evolve the customer strategy.
Value Proposition
The exercise of clearly defining the value proposition for your current customers can help provide clarity on how a new country’s target customer may view your offering. This however is an assumption in the early phase. Your target customers may not have the same pain point as a home market customer. The value proposition should be iterated as additional customer feedback is obtained. By using the business model canvas it provides team members with a central location to review and update the value proposition in order to find product market fit.
Customer Segment
Another key section that companies should assess is who their target customer segment is. This will happen in tandem with defining the value proposition for that customer segment. While it is fine to make some initial assumptions of who the target customer is, the key is remaining open to changing that with new data. It is often the case that companies uncover a completely new problem use case specific to a local customer persona that is wholly different from HQ. This openness to iteration can result in a lucrative new opportunity being unlocked.
