212 evaluating business models Like seeing the doctor for an annual exam, regularly assessing a business model is an important management activity that allows an organization to evaluate the health of its market position and adapt accord- ingly. This checkup may become the basis for incremental business model improvements, or it might trigger a serious intervention in the form of a business model innovation initiative. As the automobile, newspaper, and music industries have shown, failing to conduct regular checkups may prevent early detection of business model problems, and may even lead to a company’s demise. In the previous chapter on the business models environment (see p. 200), we evaluated the infl uence of external forces. In this chapter, we adopt the point of view of an existing business model and analyze external forces from the inside out. The following pages outline two types of assessment. First, we provide a big picture assessment of Amazon.com’s online retailing model circa 2005 and describe how the company has built strategically on that model since. Second, we provide a set of checklists for assessing your business model’s strengths, weaknesses, opportunities, and threats (SWOT) and to help you evaluate each Building Block. Keep in mind that assessing a business model from a big picture perspective and assessing it from a Building Block perspective are complementary activities. A weakness in one Building Block, for example, may have consequences for one or several other Building Blocks—or for the entire model. Business model assessment, therefore, alternates between individual elements and overall integrity. bmgen_final.indd 212 6/15/10 5:44 PM