Cost associated in NABC

Definition of Associated Cost in our context:

The next step in our value-based approach is to compare the associated costs that come with each alternative.

In our gaming – gambling example we can name one alternative “doing nothing” (very popular alternative by the way). In this case, the associated costs would be the “missed business”.

But apart from the “doing nothing” alternative, we can compare the more serious alternatives for an US-based tech startup, that received additional funding for “international growth”. Their shareholders expect to look for aggressive growth opportunities and certainly have heard that the European Union in 2016 generated a nominal gross domestic product (GDP) of 16.477 trillion US dollars, constituting approximately 22.2% of global nominal GDP and, as a whole is the largest economy in the world.

However, with all the uncertainty around UK Brexit, it´s hardly predictable what´s the best go-to-market approach. Old school recommendations would tell you to do what the others did and install a European bridgehead in London (where most come together). But that could become a massive strategic mistake.

Not only is the cost of living and the cost of doing business in the U.K. much higher than in any other European country. There is still an open question of if and how the UK-based firms will have access to the European Union.

Definition of alternatives in our example.

Our software firm, willing to build a business in Germany, has three alternatives:

Send your own team – if available
Build a local team from scratch – find, hire & train
Buy a local company – certainly the most expensive choice

You certainly have read about the term “unfair advantage” before. It´s used in the Business Model Canvas when the entrepreneur is asked why the user should choose his service. Good answers would be: “we hold a patent”, or”, “we know this industry better than anyone else”.

We would answer that we are designed to serve exactly this use case. The reasons for this are:

we can start lean but scale fast
we don´t have to feed overhead
we are not exposed to hidden interest
we align our business model with yours

Partner with us, if you are on a serious mission and allow us to put some serious numbers on this kind of benchmark.

Our approach is Straight Forward Performance Driven, and we embrace the NABC method to balance value creation and innovation. The NABC model is science-driven and real-world proven. With a decent level of market insights, we can target local niches with the perfect role model and business incentive for each stakeholder. The beauty of this model is, that we can act faster and set up streamlined operations.