Part 3: Subsidiary internal Business Model
Parts 3 builds on Video 3 to evaluate the commercial and institutional integration of the overseas subsidiary of your parent company in a specific foreign market. Please make sure you focus your analysis on one foreign market to understand the relationship between localisation and globalisation better.
We analyse the dynamics of the Business Model. How do the different parts relate to each other and what drives revenue and costs?
The Business Model Canvas with its nine boxes gives us a static picture but does not indicate the interrelationship between the boxes. For example, the BMC does not show which boxes generate costs and revenue.
We use our Case Resources Spreadsheet to create a dynamic model which shows the interrelationships.
The direction and number of links between boxes allow us to understand the importance of the different interrelationships and the main drivers of the business model of our subsidiary.
Interrelationships help identify Platform Businesses.
The steps are
1. Internal strategies: Use BMC analysis to find out how the different part of the business model are working together? How does the business model connect firm and to the local market conditions? Is the business model a) competitive? b) profitable? c) sustainable?
2. External strategies: Combine BMC and PESTLE analysis to find out what challenges the subsidiary faces in a) its internal operations and b) its external environment?
3. Institutional strategies: Combine PESTLE and Stakeholder analysis to assess what institutional partners the subsidiary relies on to overcome challenges you have identified? What role does the parent company play?