ISDABS Stage 1: Corporate Summary


STEP 1: Prepare A Business Model


The first step to find out "what business are we in?" requires a model of the business to be developed. Figure 2 presents a generic model in which to analyse an organisation and its relationship with the environment. The model prompts key questions concerning fundamental elements of the organisation. Information to answer these questions and compile the model can be derived from interviews and documentation.

The model is based on three main intersecting sets: the company, the market(s) in which it trades, and the business environment in which it operates. These three sets are influenced by, and must operate within, the overall business climate.

The boundary of the company set defines the limits of control that the company has. This includes its products, core business and resources. The core business of the company explores the main type of business pursued by the company. The resources are the range of 'inputs' from the business environment to allow the company to engage in the core business. The products sector of the model considers the outputs of the organisation (i.e. the products and services the company currently provides to the market place.)

The market place set represents the target audience for the 'outputs' of the company. The market includes the customers and consumers who respectively buy and use the company's products and services.

The competitor sector examines the products and services against which the 'outputs' of the company must compete. These are the direct and indirect substitute products provided to the market by the company's competitors.

The competitors and resources are both parts of the Business Environment set. The Business Environment set provides the source of 'inputs' (and competition for resources) and encompasses the environment of industry and professional institutions offering opportunities and posing threats within which the company and its competitors operate.

The company, market and business environment all operate within the wider environment of the Business Climate. This influences all three sets but whilst the activities of the sets may directly or indirectly influence the business climate they do not directly control it. The Business Climate outlines the socio-economic context in which the sets operate.

The sets are summarised as:

Company: {mission, internal structure, geographic structure, processes, culture, history}
Resources: {finance, people, technology, skills, raw materials, assets}
Core Business: {purpose, strategy, core competencies}
Products: {portfolio, services}
Market: {customers, consumers, channels}
Competition: {competitors, direct substitutes, indirect substitutes}
Business Environment: {industries, suppliers, strategic alliances, parent company, trade unions, professional institutions}
Business Climate: {legislation, economy, culture}

By completing the sets for the company, the generic model provides an overview of the business that is being investigated. The process of completing the model facilitates learning about the business and provides a context for the later stages of ISDABS.