Business Model Innovation Tool: Annual Strategic Review

Business Model Development

This annual tool walks you through nine business model elements, from key partners to revenue streams, using a daily 60-day rotation to systematically improve each one. For founders revitalizing a startup concept and established firms conducting their annual strategic review. Work through each element daily using four guiding questions, then assemble a final model through competitive analysis and a defined starting point of emphasis.

Before You Begin

What this tool helps solve: Turn a business idea, startup concept, or existing business into a more complete and connected model for customers, operations, partnerships, costs, channels, and revenue.

Who should use it: Entrepreneurs, startup founders, small-business owners, managers conducting strategic planning, and students learning how the parts of a business work together.

Quick Start: Review the nine Business Model Elements in Step 1, identify initial ideas for each, and download the Business Model Log in Step 2.

Complete Process: Complete the 10-day rotation in Step 2, then repeat it for 60 days to revisit each element six times before assembling your full model in Step 3.

Private, no-account workspace: ConsultaPedia does not save your tool responses or results in a user database. Download, print, or copy anything you want to keep before leaving this tool.

How to Use This Business Model Innovation Tool

This tool guides you through a three-step process for developing, evaluating, and improving a business model. Use it when starting a business, revisiting an existing business model, preparing for strategic planning, or looking for opportunities to improve customer value and competitive advantage.

Step 1: Understand the Nine Business Model Elements

Begin by reviewing the nine Business Model Elements. These elements work together to describe how a business creates value for customers, operates, competes, and earns revenue.

Expand the individual sections to learn about Key Partners, Key Activities, Value Propositions, Customer Relationships, Customer Segments, Key Resources, Channels, Cost Structure, and Revenue Streams. You may use the Expand All button to review all elements at once.

Step 2: Develop Your Model Through Daily Brainstorming

Create a Business Model Log using the provided template or your own document. Complete one Business Model Element each day using the four guiding questions: What can we improve, create, eliminate, or reduce?

The first rotation takes 10 days. Days 1 through 9 focus on the nine Business Model Elements. Day 10 is used to review how the elements work together and to consider the overall positioning of the business.

For the greatest benefit, repeat the 10-day rotation for at least 60 days. This gives each Business Model Element and the overall positioning review attention six times. A 100-day process provides 10 complete rotations when time permits.

Step 3: Assemble and Evaluate Your Business Model

Review your completed Business Model Log and identify the Business Model Element that represents your strongest current area of impact or opportunity. Use that element as your starting point for a preliminary competitive analysis.

Then connect all nine elements into one coordinated business model. Your final model should support customer needs, build on business strengths, account for costs and revenue, and create a position that is difficult for competitors to imitate.

Important Reminder

A Business Model is a set of connected choices, not nine separate answers. A change in one element may require changes in other elements. For example, entering a new customer segment may require different channels, customer relationships, key activities, resources, costs, and revenue methods.

Understand the Nine Business Model Elements

Use this tool when starting a business or revitalizing an existing business. The nine Business Model Elements work together as one complete business model. Take time to understand each element before moving to Step 2.

Select an element below to review its purpose, key questions, and possible areas for brainstorming.

Explore the Nine Business Model Elements

Key Partners are the outside people, organizations, and relationships that can help your business succeed. Partners may include investors, corporate sponsors, licensors, franchisors, suppliers, industry or trade associations, government agencies, nonprofit agencies, distributors, service providers, referral partners, and strategic alliances.

Who might be an appropriate partner?

Identify people or organizations that may help you gain access to:

Important resources or assets
Specific customer segments or markets
Financial resources or funding
Functional or technical expertise
Industry knowledge and a shorter learning curve

How could you partner with them?

Consider what a potential partner may contribute:

Outsourcing or offshoring capability
Financial resources
Management expertise
Technical expertise
Brand recognition
Market access
Piggyback distribution opportunities
Merger or acquisition possibilities
Sales capability
Production or operations capability

Key Activities are the things your business must do, and do well, to survive, compete, and create value for customers.

What must we do, and do well, in order to survive and thrive in our business?

This is an examination of your Critical Success Factors. The answer may involve multiple business functions, including product development, operations, customer service, sales, marketing, fulfillment, technology, financial management, quality control, and employee development.

For a startup, speak with people who have experience in the industry. Their insight can help identify important activities, common mistakes, and the factors that separate successful businesses from unsuccessful ones.

For examples from other entrepreneurs, use: Entrepreneur Interviews Advanced Search

Select an industry and then search for Success Factors to review what entrepreneurs identify as important in their businesses.

Your Value Proposition explains the value you provide to customers. It answers what customer needs you satisfy and why customers should choose your business instead of another available option.

Begin by considering the customer segments identified in Item 5. Then identify how you intend to provide value to each segment.

Consider questions such as:

What problem, need, frustration, or opportunity do we address?
What product, service, experience, or outcome do we provide?
What makes our offer useful, different, easier, faster, safer, or more valuable?
What should customers retain from existing alternatives?
What should be improved, added, reduced, or eliminated?

For additional brainstorming, use the: Sustainable Competitive Advantage Tool

This tool can help identify customer segments, determine what customers may want to retain or change, and develop product or service enhancements based on customer preferences.

The goal is to identify a practical Plus and Delta. Determine what should be improved or developed while avoiding the removal of benefits that customers already value.

Customer Relationships describe how you will establish, maintain, and strengthen relationships with each customer segment.

Different customer segments may require different types of interaction. Consider how customers will discover the business, ask questions, make purchases, receive service, obtain support, provide feedback, and remain connected after the sale.

Explore possible customer relationship methods:

Website information and resources
Web-based shopping carts or catalogs
Telephone assistance
Web-based chat
Mobile communications
Tutorials, videos, and documents
Discussion forums and blogs
Social media
Customer feedback and surveys
Personalized reorder automation
Promotional codes and coupons
Segment-specific product or service bundles

To design a more customer-centered web presence, use the: Web Segmentation eCRM Tool

Customer Segments are the specific groups of customers your business intends to serve. Strong segments should be measurable, reachable, potentially profitable, and likely to have identifiable needs or preferences.

Explore possible customer-segmentation characteristics:

Demographics, such as age, income, education, or household type
Geography, such as zip code, climate, region, or location type
Clubs, organizations, or memberships
Interests, opinions, activities, or lifestyles
Occupation or industry
Educational institution or alumni affiliation
Familiarity with a brand or product category
Spending patterns, including quality versus value preferences
Company size, sales, revenue, or employee count
Buying predisposition or readiness to purchase
Frequency of use
High-volume versus single-item purchasing
New versus repeat customers
Long-term versus one-time buyers

The goal is to identify customer segments for which your business can develop a focused strategy that improves both customer satisfaction and business profitability.

To analyze each customer relationship in greater detail, including who uses the product, who wants it, and who approves the purchase, use the: Customer Analysis Tool

Key Resources are the assets, capabilities, and relationships required to operate the business and deliver value to customers.

Consider how resources should support the other Business Model Elements, especially Key Partners, Key Activities, Customer Relationships, Channels, Cost Structure, and Revenue Streams.

Examples of Key Resources include:

Equipment, vehicles, facilities, plant, and technology
Brands, reputation, and blue-sky value
Intellectual property, including patents, trademarks, and copyrights
Cash and working capital
Inventory
Credit lines
Equity and bonds
Human-resource talent, skills, and experience
Make-versus-buy decisions
Buy-versus-lease decisions
Resources available through key partners

Channels describe how your business communicates with customers and how products or services reach them. This includes both promotion and distribution.

Promotion

Explore methods to:

Communicate with customers
Create awareness and demand
Allow customers to evaluate or try the offer
Access customer reviews and feedback
Provide after-sales service and support

Distribution

Explore methods to:

Deliver products or services
Create direct or indirect distribution channels
Outsource or partner for distribution
Select transportation and delivery methods
Improve speed, convenience, coverage, or reliability

Cost Structure identifies the costs required to operate and grow the business. Assess costs in relation to Key Partners, Key Activities, Customer Relationships, Key Resources, and Channels.

Consider the following cost areas:

Low-cost versus differentiated positioning
Fixed costs
Variable costs
Partnership-related costs
Critical Success Factor costs
Customer communication costs
Asset and equipment costs
Financing costs
Promotional and marketing costs
Payroll and staffing costs
Operating costs
Distribution costs
Economies of scale versus warehouse or inventory costs
Mass-production versus personalization costs

Revenue Streams identify how the business earns money. Begin by asking: What are our target customer segments willing to pay for the value we provide?

Possible Revenue Sources

Sales of products or services
Subscriptions or memberships
Licensing
Advertising or web-click revenue
Broker commissions
Leasing or rentals

Possible Pricing Methods

One-time versus recurring pricing
Fixed versus negotiated prices
Demand-driven pricing
Follow-the-leader pricing
Bundled price packages
Auction or bidding pricing
Discount pricing
Tiered pricing
Individual revenue-stream versus total-revenue analysis
Price lining versus loss-leader pricing
Penetration pricing
Prestige pricing

Four Questions to Use for Every Element

As you review each of the nine Business Model Elements, ask the following four questions:

What improvements can we make in this area compared with what is currently being offered?
What can we do that is not currently being done, including ideas used in other industries?
What can we eliminate because it may not be important to customers and may help reduce costs?
What can we reduce because it may not be important to customers, even though other companies may currently provide it?

Developed by Dr. Ralph Jagodka , Ed.D., former Interim Director of the East Los Angeles County Small Business Development Center and author of "How To Organize, Start and Manage a Small Business." Full bio. © 2026 About This Page
Based on the work: Business Model Generation by Alexander Osterwalder and Yves Pigneur, Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim, and Diffusion of Innovations by Everett M. Rogers.

Develop Your Business Model Through Daily Brainstorming

Create a Business Model Log and use it to capture ideas as you develop your business model. Complete the process on a rotating basis by focusing on one Business Model Element each day.

Create Your Business Model Log

Create a log book using a word processing file. Use one chapter or section for each Business Model Element from Step 1.

Download the Business Model Log template

On the cover page of your log, include:

Your name
A brief description of your original business idea

Then create chapters or sections for the nine Business Model Elements: Key Partners, Key Activities, Value Propositions, Customer Relationships, Customer Segments, Key Resources, Channels, Cost Structure, and Revenue Streams.

Ask These Four Questions

Each day, focus on one Business Model Element from Step 1. Think about your original business idea and ask the following questions:

What improvements can we make in this area?
What can we do that is not currently being done, including ideas that may be used successfully in other industries?
What can we eliminate because it may not be important to our customers?
What can we reduce because it may not be important to our customers?

Record all ideas in your log, including incomplete ideas, questions, observations, examples, and possible improvements. Do not reject an idea too quickly. You can evaluate and refine ideas later.

Daily Brainstorming Routine

Morning Brainstorm: 15 to 20 Minutes

Review the original business idea on the cover page of your log.
Identify the Business Model Element assigned for the day.
If this is a repeat day, briefly review the earlier notes in that element's chapter before beginning.
Spend 15 to 20 minutes considering the four questions for the assigned Business Model Element.
Record your initial thoughts in the appropriate log chapter.

Throughout the Day

Keep the assigned Business Model Element in mind throughout the day. New ideas may occur while you work, observe customers, read, travel, speak with others, or encounter another business.

When an idea occurs, record it immediately if possible. If you cannot update the log at that moment, make a short note and enter it in the appropriate chapter later that day.

Evening Log Update

Add the day's additional ideas, questions, examples, and observations to your Business Model Log. Continue building upon earlier entries when you return to the same Business Model Element during a later rotation.

Suggested 10-Day Rotation

Day 1: Key Partners

Create or open the Key Partners chapter in your Business Model Log. Brainstorm ideas about the people and organizations that may help the business succeed.

Consider investors, suppliers, strategic partners, franchisors, trade associations, advisors, referral sources, service providers, distributors, and other organizations that may strengthen the business.

Day 2: Key Activities

Create or open the Key Activities chapter. Focus on the activities the business must perform especially well to create value for customers and compete effectively.

For ideas about activities other entrepreneurs may be using, review: Entrepreneur Interviews Advanced Search

Day 3: Value Propositions

Create or open the Value Propositions chapter. Focus on what the business offers, which customer problem it solves, and why customers should choose the business.

For additional ideas about what to retain, improve, modify, reduce, or eliminate, use the: Sustainable Competitive Advantage tool

Day 4: Customer Relationships

Create or open the Customer Relationships chapter. Focus on how customers will experience the business before, during, and after a purchase.

Consider service, communication, trust, follow-up, loyalty, self-service, personalization, customer feedback, and problem resolution.

For ideas about personalizing customer experiences, use the: Web Segmentation Strategy tool

Day 5: Customer Segments

Create or open the Customer Segments chapter. Focus on identifying the customer groups that are the best fit for the business.

Consider which customers have the strongest need for the offer, are most likely to purchase, are profitable to serve, and can be reached effectively.

To generate a detailed understanding for each of your customer relationships, separating who uses a product from who wants it and who actually approves the purchase, consider using the: Customer Analysis tool

Day 6: Key Resources

Create or open the Key Resources chapter. Focus on the people, skills, assets, technology, intellectual property, facilities, capital, and relationships required for the business to operate and compete.

Day 7: Channels

Create or open the Channels chapter. Focus on how customers will learn about the business, evaluate the offer, make a purchase, receive the product or service, and remain connected after the sale.

Day 8: Cost Structure

Create or open the Cost Structure chapter. Focus on startup, fixed, variable, operating, staffing, marketing, technology, inventory, delivery, and growth-related costs.

Day 9: Revenue Streams

Create or open the Revenue Streams chapter. Focus on how the business will earn revenue, establish prices, collect payment, and possibly develop recurring sources of income.

Day 10: Business Model Integration and Positioning Review

Review the ideas developed during Days 1 through 9. Consider how all nine Business Model Elements work together as one business model.

Ask yourself the following questions:

Do the nine Business Model Elements support one another?
Are there conflicts, such as a low-price strategy that requires unusually expensive service?
Does the proposed business model fit the intended customer segments?
Does the business model create a clear and credible competitive position?
Which ideas appear most promising and deserve further testing?

For a detailed look at positioning ideas, use the: Positioning Tactics tool

Repeat the Rotation

On Day 11, return to Key Partners. Before beginning the morning brainstorm, scan the existing notes in your Key Partners chapter. Then complete a new 15 to 20 minute brainstorming session and continue adding ideas throughout the day.

Repeating the rotation allows ideas to build upon earlier ideas. A simple observation from an earlier rotation may later develop into a new service, partnership, customer segment, channel, revenue stream, or competitive advantage.

Continue for 60 Days

To gain the full benefit of this process, continue the rotation for at least 60 days. This provides six complete 10-day rotations and allows you to focus on each Business Model Element, as well as overall company positioning, at least six times.

A 100-day process is even better when time permits. It provides 10 complete rotations and allows you to revisit each Business Model Element and overall company positioning 10 times.

It is common for new ideas in each log chapter to build upon earlier notes. Over time, this process can lead to practical improvements and new out-of-the-box ideas for your business.

Developed by Dr. Ralph Jagodka, Ed.D., former Interim Director of the East Los Angeles County Small Business Development Center and author of "How To Organize, Start and Manage a Small Business" Full bio. © 2026 Based on the work Business Model Generation by Alexander Osterwalder and Yves Pigneur, Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim, and Diffusion of Innovations by Everett M. Rogers.

Assemble and Evaluate Your Business Model

After completing Steps 1 and 2, use this final step to assemble your ideas into one coordinated business model. Review your log, identify your strongest area of emphasis, study competitors, and combine the nine Business Model Elements into a practical strategy.

Your Business Model is a set of connected choices. The nine Business Model Elements should support one another. A change in one element may require changes in other elements. For example, serving a new customer segment may require different channels, customer relationships, key activities, resources, costs, and revenue methods.

1. Review Your Business Model Log

Review all chapters in your Business Model Log. It is best to do this in one sitting so you can see the complete set of ideas, opportunities, questions, and possible connections across the nine Business Model Elements.

Do not attempt to make every decision during the first review. The purpose is to regain an overall view of the business and identify patterns, promising ideas, missing information, conflicts, and possible opportunities.

2. Identify Your Starting Point of Emphasis

Identify the Business Model Element that represents your strongest current opportunity or most important source of competitive impact.

Ask yourself:

What is our strongest area of impact? Which of the nine Business Model Elements should become our starting point of strength?

Your starting point may be an especially strong customer relationship, a unique value proposition, a strategic partner, an important resource, an effective channel, a cost advantage, a revenue opportunity, or a clear customer segment.

3. Complete a Preliminary Competitive Analysis

Begin your competitive analysis with the Business Model Element selected for emphasis. Identify both direct competitors and indirect competitors.

Direct competitors: Businesses that offer products or services customers may consider substitutes for yours.
Indirect competitors: Businesses or alternatives that satisfy the same customer need in a different way.

Use search engines, industry directories, customer reviews, social media, trade associations, and competitor websites to identify relevant competitors. Review the products and services they offer, their target customers, their prices when available, their customer experience, their location or geographic coverage, their marketing messages, and their visible strengths.

Do not focus only on similarities. Look for subtle differences in how competitors position themselves, bundle products or services, serve customer segments, deliver value, communicate with customers, and operate within the proposed market.

This analysis can help you estimate the types and extent of competition you may encounter and identify potentially unexploited competitive spaces.

Explore Competitor History

It can also be useful to examine the history and evolution of major competitors. Use the: Internet Archive Wayback Machine

Search for a competitor's website and review earlier versions when available. Observing how a company changed over time may reveal useful insights about market changes, niche choices, product development, customer needs, and strategic decisions.

4. Build Your Complete Business Model

After identifying your starting point of emphasis and completing a preliminary competitive analysis, return to your Business Model Log. Review the remaining eight Business Model Elements and begin assembling a complete, coordinated business model.

This process takes time. The goal is not merely to complete nine separate sections. The goal is to create a business model in which the elements support one another and work together to create customer value and competitive strength.

A Strong Business Model May:

Be difficult to imitate because it combines multiple complementary components into a sophisticated solution.
Create barriers to market entry through strong customer relationships, cost leadership, specialized knowledge, unique assets, or strategic partnerships.
Include protectable assets such as brands, copyrights, trademarks, patents, licensing opportunities, or proprietary processes.
Incrementally build solution bundles for specific customer segments.

Increase the Probability of Customer Acceptance

To increase the likelihood that intended customers will embrace your offering, strive to make the product or service:

Better than currently available alternatives
Compatible with existing standards, values, habits, and experiences
Easy to understand and learn to use
Easy to try on a limited basis before making a larger commitment
Easy for customers to observe through results, demonstrations, testimonials, or reviews

Final Business Model Questions

Before finalizing your business model, answer these four questions:

Do we have passion for the product, service, or functional role; the necessary technical and general business skills; and a market need we can solve?
Who are the customers we intend to serve?
What is our value proposition?
How do we intend to make money?

Your answers should be consistent across all nine Business Model Elements. When the elements reinforce one another, the business is more likely to communicate a clear value proposition, serve customers effectively, operate efficiently, and develop a sustainable competitive advantage.

Developed by Dr. Ralph Jagodka , Ed.D., former Interim Director of the East Los Angeles County Small Business Development Center and author of "How To Organize, Start and Manage a Small Business." Full bio. © 2026
Based on the work: Business Model Generation by Alexander Osterwalder and Yves Pigneur, Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim, and Diffusion of Innovations by Everett M. Rogers.