How An International Business Professor in Germany Uses the Business Model Localization Canvas (BMLC) To Teach Business Models
The Business Model Canvas (BMC) by Alex Osterwalder and Yves Pigneur is highly-regarded as one of the most strategic frameworks in the last 10 years that simplifies the process of understanding and designing business models.
Despite being widely used, the model misses a very important piece: It doesn’t discuss global growth as one key strategy of business model innovation.
Professor Uwe Sachse, who teaches International Business, Entrepreneurship & Innovation, and Business Administration at Albstadt-Sigmaringen University in Germany, has been looking for a market-entry version of the BMC for years.
Together with fellow university researchers and practitioners in the international business field, they had to develop “add-on” questions and building blocks to address the missing internationalization pieces of the BMC.
The Missing Piece Of The Business Model Canvas
Professor Sachse explains, “In consultancy practice, we start by looking at markets and then ask ourselves how to enter those markets. What resources, such as capital, personal, products & services are best suited to win new customers? How should we best deliver corporate value internationally? Large companies tend to develop a pool of expatriates and then send them to solve specific problems, like building production facilities. But today, as companies have more digital channels through which they can communicate and sell their product or service to their customers, the business has changed.”
As a member of the Academy of International Business, a leading association of scholars and specialists in the field of international business, Professor Uwe Sachse has access to rigorous research, cutting-edge case studies, and resources on the topic. He also cites textbooks, such as “International Business” by Ricky Griffin and Michael Pustay or “International Business” by Mike Peng and Klaus Meyer, as source material to teach students about international management. Yet, he found that current tools didn’t particularly address a significant shift in today’s global business: digitalization and its influence on business model innovation.
He cites the traditional impression that internationalization is still in a lot of sectors “focus[ed] on exporting”, that is, exporters buy a physical product and resell this in their own country. This leaves an untapped opportunity for true innovation in business models across worldwide markets.
Enter Global Class’ Business Model Localization Canvas (BMLC)
To fill in the missing international business piece of the BMC, he needed a different framework that identifies the right questions to pinpoint the business model changes needed when scaling into new markets.
Global Class’ Business Model Localization Canvas (BMLC) addressed all the missing pieces he’s looking for since the BMC appeared in 2010. It’s a tool that facilitates localization discovery and market identification and specifies potential localizations all in one document.
After reading the Global Class book shortly after it was published, he started thinking of how he could incorporate frameworks from the book into his lesson plans. The BMLC is now central to Professor Sachse’s ability to demonstrate an advanced view of international business model generation to his students.
“For the first time, we are using this new approach of Global Class. In the first template, I’m showing them the general BMC. Then, I’ll extend this template using the international version [BMLC], where we’re looking at ‘distance’.
‘Distance’ as a metaphor for ‘differences’
Distance is a metaphor for how strong cultural, political, and/or legal differences may exist in markets, regions, or even segments (within markets). The question is, “How strong is this distance, or degree of difference, from an initial market to a new market? The stronger the distances are, the more difficult it seems to develop the business and the more effort and resources they’ll need to localize and adapt.”
The BMLC is a comprehensive, yet easy-to-understand framework that helps students understand how companies can develop and test hypotheses when operating in a new market.
At the Forefront of International Business Education
Student response to Professor Sachse’s classes is highly regarded. His class is ranked in the top 10% of all classes at his University. His next plan is to move from theoretical teaching of the key concepts to practical applications, where he could fill in the sections with real-life examples and design with corresponding building blocks in the BMLC.
Aside from the BMLC, Professor Uwe also finds the Localization Premium Analysis, Global Class Management Model, and the Interpreneur Mindset (as discussed in the Global Growth Master Class) as interesting frameworks. Currently, the BMLC is included in the curriculum for his class on International Business at the Bachelor level but will soon also teach it at the MBA level.
“Teachers need more tools, teach different skills, and create a new mindset. I credit Global Class for coming up with comprehensive visuals that make it easy for students to learn about international business.”
About Global Class
The Global Class team has developed THE playbook that teaches organizations the right mindset, culture, and strategies to successfully build global businesses. Through consulting engagements and practical tools (+ case studies built from conversations with over 400 executives from the world’s fastest-growing companies), we help executives with companies valued at $1B to $100B reach global scale. From market entry to global scale, we help companies build the foundation for successful global growth through management consulting services, customized platforms, and more.
