BINUS @JAKARTA • BINUS @BANDUNG • BINUS @MALANG • BINUS @SEMARANG

BINUS @JAKARTA • BINUS @BANDUNG • BINUS @MALANG • BINUS @SEMARANG

SUSTAINABLE BUSINESS MODEL

COURSE: BUSINESS SUSTAINABILITY
COURSE CODE: BUSS6171003

Session 23 - 24

SUBJECT MATTER EXPERT

Dr. Selly Novela, ST.,MM.,CPM.
LEARNING OUTCOMES

On successful completion of this course, student will be able to:

• LO 1: Identify the reasons, perspectives, and governance for

sustainability practice in business

• LO 2: Apply the accountability framework of sustainability in

business operations

• LO 3: Create the implementation framework for sustainable

business
ACKNOWLEDGEMENT

These slides have been adapted from:

Jon Jonker & Niels Faber (2021). Organizing for Sustainability: A Guide to
Developing New Business Models. Palgrave Macmillan
ISBN: 978-3-030-78156-9
Organizing for Sustainability: A Guide to
Developing New Business Models

Part I - III
 INTRODUCTION

• “Many companies that are considering, or reconsidering, their strategy still do

so use traditional linear business models, in which pursuing higher profits are
often at the expense of our earth”
- Frank Ever,Senior Lecturer and Quality Control Coordinator,
Windesheim University of Applied Sciences

• “Organizing for Sustainability and the Business Model Template are the next
steps towards sustainable organizations and ecosystems. It is the very balance
between sustainability, human dignity and profitability that is a precondition for
successful business models in a world in which digitalization and global
competition are becoming increasingly important.”
- Edwin Tuin, Change Expert
BUSINESS MODELLING
 A NEW MODEL FOR ORGANIZING MULTIPLE
VALUE CREATION
Three Guiding Principles:

In light of the triple transition challenges and the different

approaches in modelling the changing of value creation, three
guiding principles play an important role:

1. Being more sustainable (eco-efficiency)

2. Designing and organizing closed loop with the aim of
creating circularity;

3. Deliberately recreating the social fabric that underpins

inclusivity

Each of these principles is closely linked to the UN Sustainable

Development Goals (SDGs).
 A SHORT HISTORY OF BUSINESS MODELLING
• Value creation is the core of a business model and is the
shared task of the actors involved in the delivery of a business
model.
• A business model is a description of how value creation
between parties or partners – based on certain principles – is
organized, at a particular moment, in a specific context, and
given available resources.
• This session will introduce a business model template and
associated system that is based on the pursuit of multiple
forms of value creation.
 A SHORT HISTORY OF BUSINESS
MODELLING – CRITICISM TO THE
TRADITIONAL BUSINESS MODEL
FRAMEWORK
• The best known of business modelling is the Business Model Canvas (BMC;
Osterwalder [Link].,2010).

• The main critiques of the BMC and compare it with the BMT (Business Model
Template):

− There is a limitation in this model, that certain factors such as the external
environment, competitors, and preconditions are fall outside the model.

− How the buildings blocks in BMC influence each other is unclear

− It’s not suitable for not-for-profit organizations and other forms of social
organization.

− Its results in insufficient attention being paid no strategy, long-term thinking,

and time.
 A SHORT HISTORY OF BUSINESS
MODELLING – CRITICISM TO THE
TRADITIONAL BUSINESS MODEL
FRAMEWORK
• The conventional business modelling approaches have several weaknesses
• The frameworks focus almost exclusively on the perspective of one
organization, with the emphasis on creating financial value.

• In reality, organizations are rarely able to organize value creation, delivery,

and capture on their own. Without exception, organizations work in a chain
of suppliers, buyers, and partners.

• The role of customers in a traditional business model often consists solely of

generating revenue for the organization.

• The type of value described in a conventional business model and associated

toolkits is far from complete. Traditionally, the emphasis is on describing how
financial value is created for the organizational itself.
THE BUSINESS MODEL
TEMPLATE
THE BUSINESS MODEL TEMPLATE (BMT) AT A
GLANCE

• BMT provides a structure consisting of stages and building

blocks, which helps to make several coherent choices that
result in a design for a business model.

• The focus is to determine multiple values, and thus the

financial margin is emphasized rather than profit being the
dominant factor.
 THE BUSINESS MODEL TEMPLATE (BMT) AT A
GLANCE
• BMT consists of three stages and ten building blocks:

• Definition Stage
This stage consists of three building blocks:

1. Motive and Context

2. Dream
3. proposition
The result of Definition Stage is an overview of the context, the
problem statement, the ultimate end situation/goal that you have in
mind, and finally a high-level but clear-cut formulation of your
proposal to achieve that ultimate end goal.
 THE BUSINESS MODEL TEMPLATE (BMT) AT A
GLANCE
• Design Stage
This stage will assist you to work out how you are going to design
the business model, through following steps:

4. Business Model Archetype

5. Parties

6. Strategy

7. Core Activities

8. External test
 THE BUSINESS MODEL TEMPLATE (BMT) AT A
GLANCE
Result Stage
This stage helps you to identify two essential building blocks of your
business model:

9. Impact; that the business model has

10. Value(s) Creation; it is made clear which values are being created

These last two building blocks provide insight beyond the

conventional business model. The impact that a business model has
on its social, material, and ecological environment will be described.
THE BUSINESS MODEL TEMPLATE (BMT) AT A
GLANCE
THE BUSINESS MODEL TEMPLATE (BMT)
AT A GLANCE EXAMPLE
DEFINITION STAGE
 MOTIVE AND CONTEXT
Tools for visualizing the Motive and the Context:

a) A quick scan of facts: to gather facts about the issue you want to
address and organize them properly

b) Macro-analysis like DESTEP (PEST) and SWOT

c) Life cycle analysis: shows the environmental impact during the
various life stages of a product

d) Trend analysis and scenarios: extending specific trends into the

future, for example, for a period of five or ten years.

e) Environmental analysis: could be a combination of multi tools such

as: blue ocean strategy, brainstorming techniques, capabilities
analysis, five forces model, value proposition canvas and so on.
MOTIVE AND CONTEXT: CASE STUDIES
MOTIVE AND CONTEXT: CASE STUDIES
MOTIVE AND CONTEXT: CASE STUDIES
 MOTIVE AND CONTEXT
• These three cases illustrate that the motives and the context for
getting started with a particular issue can be completely different.
These examples also show that perhaps everything and anything
can be the reason to start working on a business model.

• This is stimulating, on the other hand, but also a bit over whelming
on the other. For it suggests that we live in a world where new
problem are constantly emerging, which may become increasingly
difficult to solve due to their complexity.
 THE DREAM
• Dreaming is a crucial part of the development of a business model.
We need dream to imagine the future.

• To realize these dreams, you could make use of the scenarios, or

framing.

• Framing is about the conscious and effective use of visual and

language tools to inspire and convince others
THE DREAM: CASE STUDIES
 THE VALUE PROPOSITION
• A business model is underpinned by a value or business proposition
• Such a proposition solves a problem, meets a current need, or
appeals to new, often still undiscovered, needs.

• It consists of a smart and immediately recognizable combination of

products and/or services that implicitly and explicitly meet the
requirements of a customer or user.

• A business model is a description of how value creation is

organized, at a specific moment in a particular context, for certain
people or parties, and given the available resources.
 THE VALUE PROPOSITION
• There are Five positions of Value Creation:
1. Value creation based on the transformation of commodities (the
extraction and conversion of raw materials)

2. Value from the recycling of already-existing products, spare parts or

commodities

3. Value creation by organizing value retention through loops

4. Value creation by restoring
5. Value creation by organizing regeneration of natural habitat, social
cohesion, etc
THE VALUE PROPOSITION: CASE STUDIES
DESIGN STAGE
 BUSINESS MODEL ARCHETYPES
• Practice shows that at present business models aimed at capturing
multiple value creation can be divided into three major categories:

1. Platform business models:

• aims to make better and more efficient use of what we have through
asset or performance management enabled by datafication and
digitalization.

• Platform business models are possible due to developmenta such as the

Internet of Things (IoT), in which everyday devices are linked to the
internet.

2. Community based (or collective) business models:

• Refers to the creation of business models in multi-stakeholder thematic

communities by citizens, with the help and involvement of public entities,
 BUSINESS MODEL ARCHETYPES
• Circular business models:
• Based on the idea of designing and manufacturing raw materials,
components, and products in such a way that they can kept in circulation
quasi-indefinitely.

• A description of the way in which value creation and retention are

organized among parties.
BUSINESS MODEL ARCHETYPES: CASE
STUDIES
 PARTIES
• Identifying what actors and stakeholders you want to engage with, work
with, or create value for through your business model

• There are three key approaches to mapping networks:

1. Spider Web Model: you as an initiator, set up a partnership and identify
the related parties with you in the center

Spider Web
model
 PARTIES
2. Mesh Network model: the participating parties are links in networks in
which all parties are mutually connected.

3. Cluster Tree model: start with yourself as the starting point of the
network.

Mesh Network model Cluster Tree model

PARTIES: CASE STUDIES
 STRATEGY
• For the BMT, there are six strategies can be used, be deployed, or
underpin the development of sustainable business models:

1. Eco-efficiency
2. Servitization (product as a service)
3. Use optimization
4. Lifespan extension
5. Cascading
6. Community Building
 STRATEGY

Typology of strategy
choices
STRATEGY: CASE STUDIES
 CORE ACTIVITIES
• Specify what you are going to do. Which core activities will you
undertake alone or with others to achieve your goal through the chosen
strategy or mix of strategies?

• These can be both technical and organizational activities.

• The idea of a core activity is that a specific part of the business
activities can be seen as the specialty of the company: what is really
good at.

• Companies and organizations have an ever-growing need to integrate

sustainability into their core activities.
 CORE ACTIVITIES

Combining strategies, business models, and core

activities
CORE ACTIVITIES: CASE STUDIES
 EXTERNAL TEST
• The external test is the final building block of the Design Stage of the BMT.
• Here you will test the viability of the new company, business activity, or
intervention.

• At least five aspects when you are in the testing step of the BMT
1. Does it already exist? What is your USP? (Unique Selling Point)
2. Is it legal?
3. To which economy do you contribute?
4. Unintended consequences
5. Valuable feedback
• If these checklist is not enough, see added checklists from a bank to show
what kind of questions they raise when you come in to ask for funding for
EXTERNAL TEST
EXTERNAL TEST: CASE STUDIES
RESULT STAGE
 IMPACT
• Impact is about the short – and long-term effects of your sustainable
business model. What are the positive and negative consequences of your
business model, now and in the future?

• You can measure the effects of your business model in three successive
stages:

1. The concrete output of your production or services (the direct result)

2. The Outcome (medium-term environmental effects)
3. The Impact (lasting long-term effects)
• Use a number of relevant indicators (for example: The EU indicators for
circular economy, the UN SDGs, etc).

• The common method used to test the indicators: SMART (Specific,

Measurable, Achievable, Relevant, and Time Bound)
IMPACT: CASE STUDIES
 VALUE(S) CREATION

• Value(s) Creation is the most challenging building block of the

BMT.

• A business model provides a logic for value creation that

translate into a proposition

• Combining the nature of different transactions with the

possibilities of using products, services, or combination of both
in a business model creates a rich spectrum of both monetary
and hybrid transaction models, as visualized in the next figure:
 VALUE(S) CREATION

Typology of the link between transactions, service, and multiple values

 VALUE(S) CREATION

• In addition to the concepts of business models, revenue

models and transaction types, another key term your are likely
to encounter is Business Case.

• Business case is defined as a financial model demonstrating

that a business model is financially viable without additional
external funds such as sponsorship, grants, or subsidies.

• In BMT, a conclusive business case means that the nature of

transactions is related to the intended impact.
VALUE(S) CREATION: CASE STUDIES
ALTERNATIVE ROUTES
 ALTERNATIVE ROUTES THROUGH THE
BMT
• There are many possible routes through the BMT, and here we
outline five possible alternatives:
ALTERNATIVE ROUTES THROUGH THE
BMT
DISCUSSION
 GROUP ASSIGNMENT

• Create your Business Model Templates from your own

business idea.

• How is your route in developing ten building blocks and

explain why you choose that route.
 REFERENCE

Jon Jonker & Niels Faber (2021). Organizing for

Sustainability: A Guide to Developing New Business
Models. Palgrave Macmillan
ISBN: 978-3-030-78156-9