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Journal number 1 ∘ Manana kharkheli Giorgi Morchiladze
Issues to Consider When Changing Business Models in the Post-Pandemic Period

10.36172/EKONOMISTI.2021.XVIII.01.Manana.Kharkheli.Giorgi.Morchiladze

Expanded Summary

The pandemic has had a significant impact on various aspects of human life. Business, in the world and in Georgia, has faced significant difficulties and challenges. According to the World Bank, the world Gross Domestic Product (GDP) in 2019 was equal to 87.735 trillion US dollars, and in 2020 , it decreased by 3.39 %[1]. The situation in Georgia was even worse, as according to the National Statistics Office, the real GDP growth rate in 2020 was equal to minus 6.8 %[2] compared to the previous year. The above-mentioned statistics show that business became more difficult to do in 2020 and even more complicated in 2021. Amid intensified competition, business in order to be able to operate and succeed, it is necessary to adapt to a new environment, which is often related to a change in business model.

Сhanging of business models are complex and difficult process, This is why we have devoted considerable time to both theoretical and practical research. During the research process we studied a number of scientific articles and research papers, we also conducted field study in ten different companies, who were (and still are) active in the catering, real estate, manufacturing and distribution sectors (Among them were companies such as Georgian Dairy Holding - with an annual sales of more than 40 million, etc.). According to our research, change in business model means change of one or more following elements:

  1. Customer Segments - Defines the groups of organizations and individuals that will be attracted and served by the enterprise (Osterwalde,Pigneur 2019,20) 
  2. Value Propositions - describes the range of products and services that create value for a specific segment of customers (Osterwalde,Pigneur, 2019,22) 
  3. Channels - the relationship between companies and customer segments and the characteristics of delivering a valuable offer (Osterwalde,Pigneur, 2019,26)   
  4. Customer Relationships - includes the various relationships that a company establishes with specific customer segments. (Osterwalde,Pigneur, 2019,28)    
  5. Revenue Streams - The cash that a company receives from each segment of the customer, if the customer is the "heart" of the business model, is its "arteries" of revenue. (Osterwalde,Pigneur, 2019,30)      
  6. Key Resources - Describes the most important features that are necessary for the operation of a business model (Osterwalde,Pigneur, 2019,34)    
  7. Key activity - the main activity that reflects the activities of the company, which are needed to implement the business model (Osterwalde,Pigneur, 2019,37)    
  8. Key Partners - Reflects a network of suppliers and partners that ensure the business model works.  (Osterwalde,Pigneur, 2019,38)    
  9. Cost structure - reflects all costs related to the operation of the business model. (Osterwalde,Pigneur, 2019,48)    

One part of question is what Company need to change (the elements of Business Model) listed above, and the other is what procedures to use to.  In this context, we find Osterwalder’s approach to the business model design process quite interesting, which consists of five phases (and which are deeply discussed in article):

  • Mobilize: Prepare for a successful business model design project;  It means, assemble all the elements for successful business model design, create awareness of the need for a new business model, describe the motivation behind the project, and establish a common language to describe, design, and analyze and discuss business models.
  • Understand: Research and analyze elements needed for the business model design effort; Business model design team immerse theirselves in relevant knowledge: customers, technology, and environment. Team, collect information, interview experts, study potential customers, and identify needs and problems.
  • Design: Generate and test viable business model options, and select the best; It means, transform the information and ideas from the previous phase into business model prototypes that can be explored and tested. After an intensive business model inquiry, select the most satisfactory business model design.
  • Implement: Implement the business model prototype in the field.
  • Manage: Adapt and modify the business model in response to market reaction.


[1] https://www.worldbank.org/en/publication/global-economic-prospects

[2] https://www.geostat.ge/ka/modules/categories/23/mtliani-shida-produkti-mshp