Design and evaluation of a system dynamics based business model evaluation method

Abstract

The business model has become an increasingly important concept to facilitate competitive advantages. However, due to its complexity managers face difficulties to evaluate how changes in the business model affect its performance. Existing approaches fall short to facilitate sufficient understanding of the influencing factors that drive the business models behavior. Drawing from System Dynamics, we propose a multi-step evaluation method to effectively support decision making in the context of complexity. Thereby we focus on the integration of available knowledge and data to explicate and quantify the essential cause-effect relationships inside the business model. The artifact is evaluated through multiple use cases inside the BMW Group. It reveals that System Dynamics enhances business model understanding not only for the decision maker but also for the stakeholders which enhances subsequent implementation of business model changes.