It all started with a simple question: “Why do ready-made business models often not work as expected?” Over the years of consulting, we have encountered many approaches - from theoretically ideal to hyper-specialized, but they rarely brought results that were really important for real business, especially in the conditions of constant changes and market pressure. At some point, I realized that we needed a tool that would not only take into account the uniqueness of each company, but also help it remain flexible and sustainable. This is how the idea of the 8K Matryoshka tool was born.

The main tools I tried often simplified complex business problems or left important aspects such as cause-and-effect relationships, multi-layered business models, and clarity of competitive advantages in the “blind spot”. In contrast, the 8K Matryoshka is built on eight key elements and is a universal framework that helps to understand and structure a business in a deeper way. This model works like a Matryoshka: from the internal structure to the external boundaries, while clearly showing cause-and-effect relationships. This approach allows you to see the company as a whole, preserving all the details and interrelations.

The 8K Matryoshka method is a modern tool for creating sustainable and adaptive business models. Its uniqueness lies in the fact that it takes into account all key elements of the company: from the internal structure to external factors influencing the market. Unlike standard approaches, the 8K Matryoshka helps not only to understand the current positions of the business, but also to find new growth points, building logical cause-and-effect relationships.

The name of the method symbolizes reliability and flexibility: like a real matryoshka, a correctly constructed model remains integral even with external changes. This approach allows you to identify weak points, strengthen competitive advantages and prepare the company for any challenges.

Why 8K? How the Number Eight Helps Build a Successful Business Strategy

The 8K Matryoshka method is based on eight key elements that help structure a business strategy, reveal the company’s strengths and eliminate weaknesses. The number 8 was chosen for a reason — it symbolizes infinity and continuous development, reminding that business management should be a continuous process aimed at growth and sustainability. This symbol reflects the multi-layered approach, where each element supports the next, like a Matryoshka doll.

The developers of the model found that the best strategies and analysis tools include exactly eight components, and they enshrined this number in their concept. The 8K Matryoshka helps companies see the full picture of the business: from internal processes to market impact. This approach not only provides clarity in management, but also allows the business to remain flexible even in times of crisis.

8K Matryoshka Concept

The 8K Matryoshka concept is based on a unique model that helps structure a business using eight key elements. Its structure resembles a traditional Matryoshka doll, where the smaller part represents the core, and the larger part represents a comprehensive understanding of the entire business model. This analogy allows for a detailed examination of the internal and external aspects of a company.

The smaller nesting doll includes two key elements: defining target customers and competitive advantages. These elements form the foundation of the business model, on which its sustainability depends. Errors in their development can lead to a mismatch in market needs or loss of competitiveness.

The large nesting doll unites the remaining six elements, revealing their interrelationships and influence on each other. It helps to evaluate the business as a holistic system, highlighting four external (upper part) and four internal (lower part) aspects. This approach simplifies the analysis of processes and allows you to build a sustainable, flexible strategy that adapts to market changes.

Let's look at each element.

KEY CLIENTS

Key customers are the segments of consumers that will generate the most profit for your business in the foreseeable future. Identifying these groups is important for properly focusing all of your company's efforts. However, this does not mean that you will ignore other customer groups. The main goal is to understand whose needs should be met first to ensure maximum revenue.

It is important to remember that focusing on core clients does not mean completely abandoning work with other segments. The point is to understand who exactly will generate the main income and concentrate your efforts on maximally satisfying their needs.

If your business operates on a model where one group of customers profits from another (for example, media outlets that earn revenue from advertising), then you need to describe both groups: those who generate revenue and those whose needs you meet but who do not pay directly.

Types of clients in the market

Active Users — are customers who clearly understand their needs and actively satisfy them with existing market offerings. They are well-versed in offerings and have a high level of awareness of the differences between competitors. Active users often become loyal customers and can act as experts for others, influencing their choices.

New Comers (New clients and occasional clients) — These are consumers whose needs are at the stage of actively searching for a solution. These customers often try different products from different companies or make their first purchase. They may not have deep knowledge of the market and are poorly versed in the differences between offers, which makes them prone to experimenting with a new product or brand.

Not Comers — the needs of this group of customers exist, but they are not met by existing offers. The reasons may be varied: high or low price, complexity of use, unsatisfactory quality of service, or social, cultural or infrastructural barriers. This group needs a solution that will remove barriers to purchase and make the offer accessible.

Non Users — these are customers for whom there is no need for a product or service. They do not think about this value at all, which may be due to a lack of awareness or misunderstanding of the importance of this offer for their life or business.

What is important to understand in a portrait?

1. Formal characteristics
2. What does the client satisfy with your service, your product?
3. What is the customer's pain point?
4. What are clients' fears when working with people like us?
5. How does the choice happen? (scenario)
6. Who is seen as the "solver" of pain?

For a more in-depth study of client portraits, you can use:

Template for creating value for customers:

KEY INCOME

Key Revenues – is a block of the business model that describes the main sources of profit and the methods of obtaining it. In order to maximize income, it is important to understand which methods of interaction with clients will bring the greatest profit. These methods can be varied and include such aspects as payment deferrals, prepayments, margin volume, discounts and additional services.

Understanding how your company makes money allows you to fine-tune your strategy and optimize processes. For example, you can offer customers different payment options (deferred or prepaid), which will help improve cash flow and reduce risks. Develop a model that is beneficial for both parties, and pay attention to mechanisms such as the margins of the goods or services you sell.

Also, don’t forget about accounts receivable. This is one of the important elements that can significantly affect cash flows. Consider ways to reduce risks and speed up the process of receiving funds. Include additional services or bonus offers that can increase the average check, stimulate repeat purchases and customer retention.

KEY CONTACT POINTS

Not all interactions with the client are equally important. You need to focus on those points where the client makes a decision about cooperation. It is important to understand that within the framework of the business model, you should not be interested in all touchpoints, but only the key ones - those that influence the decision to start or continue working with you.

In this block, you need to describe all the key touchpoints that can bring customers to you, as well as those that you will develop as part of your strategy. These points will decide whether customers will continue to cooperate with you or prefer to switch to your competitors.

At touchpoints, customers make decisions that are critical to your business:

• whether to start working with you or not;
• continue cooperation or switch to competitors.

What needs to be diagnosed:

• Revision of all channels and points.
• What channels exist and do they attract the target audience?
• What are the main channels?
• How to increase the volume of leads.
• Where and how you can experiment with new approaches.

KEY PARTNERS

To achieve greater efficiency, your business may need partners – both individuals and legal entities. Partnerships allow you to expand opportunities, improve the quality of work and reduce risks.

Typically, partners are needed for:

• risk reduction;
• access to target clients;
• providing target clients with additional services and values;
• gaining access to know-how and technology;
• improving control over the quality of the final product or service (e.g. through freelance specialists, suppliers, franchise partners).

KEY COMPETITIVE ADVANTAGES

A competitive advantage is a quality of a company that allows it to stand out from its competitors in the eyes of consumers, creating a market advantage for it that can be long-term.

Competitive advantages define the uniqueness of the company's offer to selected clients. It is important that you clearly understand which competitive advantages are most important to your target audience and which of them you are able to create.

Describe which of your core competitive advantages are important to your target group and which of these you can develop. Also indicate which additional competitive advantages (either reinforcing or linking) can be used to strengthen your strategy within the business model.

KEY PROCESSES

The key processes in a business model play a critical role in creating unique value for customers and strengthening the company's competitive advantage. These are the processes that ensure your ability to provide products and services that meet the needs of your target audience and differentiate you from your competitors.

In this section, you need to define exactly which processes in your business model will be critical to creating unique value for customers. These could be processes related to development, production, marketing, sales, or customer service that make your offering unique and more attractive than your competitors.

Tasks to be solved:

1. What processes are vital to ensuring the success of our business model?
2. What key processes need to be improved in efficiency to meet the needs of our key customers?

KEY RESOURCES

Key resources are those elements without which it is impossible to effectively implement a business model. They ensure the functioning of processes and the satisfaction of customer needs. It is important not only to understand what we already have, but also what resources we need to develop or supplement to successfully implement the strategy.

To effectively implement your business model, you will need to use resources that can be divided into four main groups:

1. Physical objects: These are all the tangible assets such as buildings, production facilities, equipment, vehicles and other resources that enable the business to function.
2. Intelligent objects: Includes software, technology, patents, databases, scientific developments and other intangible assets that can be used to create competitive advantages.
3. People: The key resource is qualified personnel with the necessary competencies, experience and knowledge, which will ensure the implementation of business processes and the achievement of goals. This can be both internal personnel and external consultants or partners.
4. Finance: Financial resources are your own investments, access to credit, working capital and other financial instruments that will provide the business with the necessary funds to develop and scale.

By answering the questions, “What do we have?”, “What is missing?” and “What needs to be built?” you can pinpoint what resources need to be improved or acquired to achieve long-term business success.

KEY EXPENSES

Expenses are a group of costs that make up a significant portion of the business model and that must be carefully controlled. Managing expenses is important for maintaining financial sustainability and optimizing profits.

What is important to consider in this block?

• What should we keep in focus? It is necessary to identify the main cost items that require control, especially if they account for more than 5% of the total.
• What is the spending trend? It is necessary to monitor changes in expenses, identify trends of growth or decline, as well as the reasons for these changes.
• What have we done to reduce costs? It is important to consider measures aimed at reducing or optimizing costs in order to improve business efficiency.

The main groups of expenses that need to be taken into account are:

1. Fixed costs: These are expenses that do not depend on sales volume and remain constant, such as rent, employee salaries, taxes and other fixed costs. These costs need to be controlled and optimized to minimize their impact on profits.
2. Investment costs: These are costs associated with long-term investments in business development, such as purchasing equipment, technology, expanding infrastructure, or investing in marketing campaigns. These expenses are often significant, but necessary for the growth and development of the company.
3. Variable costs: Costs that directly depend on sales volumes, such as purchasing materials, wages based on output, commissions, packaging and logistics costs. Effective management of variable costs allows you to reduce unnecessary costs and increase business margins.

To successfully implement a business model, you need to carefully analyze each of these expense categories and take steps to optimize them, which will help increase the profitability and sustainability of the company.

The 8K Matryoshka is a long-term strategy development tool that helps businesses adapt to change and thrive. It helps you describe multiple strategic alternatives, analyze them, and choose the most suitable model for your business. Each alternative should consider 8 key elements: key partners, resources, processes, value propositions, channels, customer relationships, customer segments, and revenue structure.

Using the 8K Matryoshka matrix, you can develop at least three strategies for business that will take into account all possible risks and opportunities. Then, weighing the pros and cons, you choose the most effective business model, which will become the basis of your long-term strategy.

To help you avoid mistakes and really develop a high-quality business model, we offer a service "Roasting the current business model". Together with our experts you will:

• Identify and address the weaknesses of your current business model.
• Assess the realism of the chosen strategy and its adaptability to changing conditions.
• Work through key elements so that they reinforce each other and lead to real results.

If you want to expand your knowledge of business models, we also recommend reading our article about Osterwalder's model, which helps to gain a deeper understanding of the company's strategic elements.

How to quickly identify when your business model is starting to fail, and what to do about it? Alexander Pankov talks about this in the video "How do you know when a business model is no longer successful?