Running Head: BUSINESS MODEL ASSESSMENT

Business Model Assessment

Craig Loughlin
American Military University
:

BUSINESS MODEL ASSESSMENT

Introduction
Business model canvas is a pre-organized canvas with nine building blocks including:
key partners, key resources, key activities, cost structure, customer relation, channels, customer
segments, revenue stream, and value proposition. As noted by Recker et al. (2009), business
canvas model is important to any organization as it provides information regarding resources,
partners, products, and services of the organization significant in evaluating the functions and
processes for the accomplishment of the organizational goals and objectives. One of the major
challenges for organizations today is to become efficient in their business in order to achieve
sustainable competitive advantage (Mullins & Komisar, 2009). The military is not only a
challenging environment, it is also demanding in terms of creating value addition to the military
operations and security services. The business canvas model therefore provides a conceptual
strategy for successful formulation and implementation of strategies for organizational success of
the US Army Explosive Ordnance Disposal (EOD).
The US Army EOD is an organization that is essential to the success of the US military as
it is involved with the countrys Armed Forces and the global war on terrorism. EOD consists of
a team of bomb technicians who undergo special training to handle deployment, disarmament,
construction and disposal of high explosive devices which many include various kinds of
ordnance such as chemical, biological, and nuclear weapons along with improvised nuclear
devices (INDs) and improvised explosive devices (IEDs). Based on the nature of the work of the
US Army EOD, it is important to note that the organizations success depends on how it
organizes its work activities in a systematic manner. It is noted in the literature that the
organizational success is dependent on synergy, interdependence, and interrelations between
different subsystems (Giachetti, 2011; Magretta, 2002). Thus, for the success of the US Army

BUSINESS MODEL ASSESSMENT

EOD, its personnel, departments, business units, work groups, and facilities must work
synergistically. To understand how the subsystems of the US Army EOD, the paper uses the
business model canvas to illustrate how the organization orders its work activities.
Key Partners
The success of the US Army EOD has largely been dependent on its strategic alliance
with its partners which has enabled it to optimize operations while reducing risks of its business
model. For instance, the organization operates within a larger multinational bodies of military
forces, (especially under NATO multinational chemical, biological, radiological and nuclear
defense battalion) in order to achieve its mandate (see Gajdo, 2003). In addition, the US Army
EOD engages in complementary business alliances with other intelligence and military units and
organizations within the larger US armed forces based on the recognition that it cannot do
everything by itself. The organization therefore partners with the US Army Intelligence and
Security Command (INSCOM) which conducts security, information and intelligence operations
for its commanders and on its behalf.
Other strategic partners include the Explosive Ordnance Disposal Directorate, the Naval
Explosive Ordnance Disposal Technology Division (NAVEODTECHDIV), the Terrorist
Explosive Device Analytical Center (TEDAC), Picatinny Arsenal, Sadia National Laboratories,
Center for Army Lessons Learned (CALL), CBRN Analytical & Remediation Activity Mobile
Expedionary Laboratory (CARA), Technical Support Working Group (TSWG), Defense Threat
Reduction Agency (DTRA), Asymmetric Warfare Group (AWG), Defense Intelligence Agency,
and Weapons Intelligence Teams (WIT).

BUSINESS MODEL ASSESSMENT

Key Activities
The EOD teams key activities take them to every climate and all environments in
every corner of the world. The primary activities of the US Army EOD include the provision of
EOD protection support by directing any EOD operations, conducting elimination of weapons of
mass destruction (WMD) in Joint Operations Area (JOA), executing WMD operations in Joint
Operations Area, and directing JOA EOD support. Additionally, EOD also primary asset to the
the United States Secret Service (USSS) by providing direct support prior to the arrival of key
events regarding the personal protection of the President, Vice President, Department of State
and the protection of foreign nationals on US soil. In addition, the organization conducts
operations concerning deployment, disarmament, construction, and disposal of high explosive
munitions as well as other types of ordnance such as chemical, biological, and nuclear weapons
along with INDs and IEDs.
The organization also provides intelligence support to targeting operations, intelligence
support to combat assessment, and intelligence support to information operations especially in
Joint Operations. In essence, the US Army EOD also contributes to targeting and information
superiority of the US armed forces in Joint Operations Area. As a body mandated to provide
security and safety by creating ordnance, the US Army EOD supports and facilitates many of the
research and design of methods, procedures and tools (otherwise known as render-safe procedure
(RSP) to interrupt the functions or separate the essential components of ordnance in order to
prevent destructive detonation. These activities are significant in assisting the US Army EOD to
execute its organizational value proposition.
Key Resources

BUSINESS MODEL ASSESSMENT

The US Army EODs key resources include Ammunition Supply Points (ASP) which
provide the organization with the necessary explosives for EOD operations. The organization
also requires daily logistical support from the Defense Travel System in terms of car rentals,
lodging, and airfare so as to meet national and global needs of EOD assets. According to
Defense Travel Management Office (DTSO) (n.d.), the Defense Travel System (DTS) is a fully
integrated, automated, end-to-end travel management system that enables DoD travelers to create
authorizations (temporary duty [TDY] travel orders), prepare reservations, receive approvals,
generate travel vouchers, and receive a split reimbursement between their bank accounts and the
Government Travel Charge Card (GTCC) vendor (p. 1). Most importantly, DTS operations can
be found in more than 9,500 sites around the world.
In addition, the organizations personnel possess special training and therefore are
capable of employing tactics, techniques, and procedures (TTPs) when dealing with the enemy.
Moreover, the organizations personnel possess intelligence resources in terms of handling
military munitions functions as well as the emplacement tactics of explosive devices utilized by
enemy forces. The organization also possesses knowledge of Counter Radio-Controlled
Electronic Warfare (CREW) which enables it to manage the electromagnetic spectrum
throughout military operations by either jamming incoming or outgoing radio signals typically
associated with IEDs. Most importantly, the organizations key resources originate from EOD
tools used for the render safe and disposal operations of military ordnance and IEDs. It also
receives annual funding from the federal government which means it focuses mainly on
performing its duties (i.e. creating value for the American people and NATO forces). However,
the fact that the organization relies on federal fund allocation which is channeled through the US
Army means that it lacks financial freedom as well as independence in its operations. As such,

BUSINESS MODEL ASSESSMENT

the US Army EOD mimics the free business pattern in that it provides services to non-paying
customers through allocated funding through another channel. Nevertheless, it is these resources
that make the organization a vital component of any military operation in any part of the world.
As noted by Mullins and Komisar (2009), resources are important for any organization to create
value for its stakeholders.
Value Proposition
Value proposition concerns the products or services offered by an organization to meet
the needs of its customers (Linder and Cantrell, 2000). The US Army EOD as a service
organization creates value for the American people and the world population at large through its
EOD operations. It focuses on render-safe and disposal of all explosive ordnance, IEDs, WMDs,
INDs, and homemade explosives. In addition, the organizations ability to employ asymmetric
threat or techniques in military operations gives it superiority in combat operations with the
enemy, and an advantage to engage in Joint Operations. For instance, the US Army EOD is
trained to employ asymmetric threats such as engaging in battlefield clearance, offering support
to Special Operations, and exploiting captured materials. Thus, the organizations ability to
provide safety and security for not only military personnel in military operations but also the
general public helps it to create value through performance and risk reduction and distinguishes
it from other military units (see Osterwalder and Pigneur, 2010).
One of the primary design mechanisms for the US Army EOD is storytelling.
Storytelling adds significant value to the organization by providing insight into regional and
global terrorist trends. Fundamentally the same as a BOLO used by local law enforcement,
storytelling provides fact-based real-world EOD scenarios that fuel cross-organizational thinking

BUSINESS MODEL ASSESSMENT

and provide up-to-date trends of recent IED encounters.

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Ultimately, storytelling provides

significant workplace safety to the organizations employees.

Customer Relationships
The organizations key mandate and mission is to provide EOD render-safe and disposal
services. In other words, it seeks to protect the civilian population, military personnel, and
critical infrastructure from a wide range of explosive ordnance from IEDs, Unexploded
Ordnance (UXO), and Chemical, Biological, Radiological, and Nuclear (CBRN) hazards. In
essence, the organization maintains a direct relationship with its stakeholders (American people)
by providing services tailored towards the needs of the general public and military personnel in
combat environments. The direct customer relationship is offered by a team of EOD technicians
trained to respond to the various needs of the military forces and the civil population in the
modern society which is increasingly threatened by a number explosives and CBRN related
hazards. The organization has a proper channel of coordination and feedback that enables it to
respond in real time to the demand for its services. This is because the organization has its own
commander and therefore receives orders from a central command. Most importantly, the US
Army EOD operates in a general support kind of command relationship with other units within
the larger scope of the U. Army. Under general support command relationship, the supported
unit is expected to request support from the command of the supporting unit.
Channels
According to Osterwalder and Pigneur (2010), in order for an organization to deliver its
value proposition in a fast, cost effective, and efficient manner, it must use effective channels. It
is against this background that the US Army EOD uses different channels to deliver its value
proposition to the targeted stakeholders. The organization has operating areas in ten states within

BUSINESS MODEL ASSESSMENT

the United States including: North Dakota, South Dakota, Nebraska, Kansas, Iowa, Missouri,
Minnesota, Arizona, New Mexico, and Texas (where it has operating areas in nine counties). In
addition to the operating locations, the organization distributes its value proposition through
awareness and safety classes. The organization offers explosive handling classes, unexploded
ordnance awareness training, and IED defeat courses.
In order to reach the civil population with its value proposition, the organization conducts
community outreach events across the country. For instance, the organization uses the Kansas
State University Football Games, First Infantry Division Victory Week, Junction City Sundown
Salute, and Fort Riley Fall Apple Days to reach out to the community and create awareness about
the EOD mission as well as a recruiting tool. In essence, the US Army EOD attempts to create
an easier way through which it can deliver its value proposition by empowering the civil
population and military forces with the information and knowledge about EOD.
Customer Segments
In terms of customer segments, the organization serves a niche market by focusing on the
specialized characteristics and needs of the US Army in Special Operations and Joint Operations,
and of the American people during disasters and wars. For instance, the US Army EOD has a
duty to provide support to homeland security based on the internal directives of the Department
of Defense (DoD) which define and govern Military Support to Civil Authorities (MSCA).
Under the directives, the organization may be required to offer military support to the USSS and
to local, state, and federal law enforcement agencies. Thus, the US Army EOD may offer law
enforcement support, support to fight against terrorism services, and support to other domestic
security-related activities.

BUSINESS MODEL ASSESSMENT

The organization also provides support to global search, recovery, and laboratory
operations to identify unaccounted for Americans from the past conflicts. In addition, it ensures
safety of recovery teams in such operations from explosive ordnance. In essence, the US Army
EOD also serves the Joint Prisoner of War/ Missing in Action Accounting Command (JPAC).
The US Army EOD also serves the US Army Corps of Engineers as well as the Intelligence
Community not only to strengthen the security of the US, but also to reduce risks from disasters
in the country and abroad. In particular, it serves the US Army Corps of Engineers and the
Intelligence Community by researching and designing tools and procedures of countering IED,
and by developing ways of understanding enemy networks during military operations. Moreover,
the fact that the organization is capable of providing Weapons of Mass Destruction support sees
its services being used by organizations engaged in counter WMD efforts both locally and
internationally.
Cost Structure
The organization has focused on building and improving EOD render-safe and disposal
procedures in line with the new and emerging technologies in order to counter dangers and risks
posed by IEDs, WMDs, INDs, and other chemical, biological, radiological, and nuclear hazards.
In other words, the organization uses value-driven business model in which it is less concerned
with cost but focuses on creating value for its stakeholders (that is, the American people and US
Army). Nevertheless, the most important cost common to the organization are soaring travelling
and fuel cost as well as spending on ammunition. In addition, the organization spends on nonEOD equipment such as personal protection equipment, team equipment, and unit equipment.
Spending is also required for essential items for the operations of the EOD team within the US
Army and these include EOD equipment (i.e. bomb suits, robotics platforms, vehicles, CREW

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systems, EOD tools, Hand-held explosive detectors, and mine detectors). Generally, spending by
the US Army EOD can be categorized into the following areas: operations and maintenance,
military personnel, procurement, family housing, research and development, testing and
evaluation.
Revenue Streams
The organizations revenue streams come from different segments. For instance, the
main source of revenue for the organization is through federal funding which is obtained from
American tax payers and is channeled through the United States Special Operations Command
(USSOCOM). In addition, the organization also gets its revenues through contracted UXO
disposal assets in joint/multinational EOD task forces (United States Government Accountability
Office (GAO), 2013).
Conclusion
The US Army EOD, as an organization mandated to ensure safety and security of both
civil population and military personnel, it is fair to conclude that the business model of the
organization has been effective in ensuring that it meets its organizational goals and objectives.
Based on the analysis of the organizations canvas, it is clear that the subsystems of the
organization are working synergistically and interdependently to create value for its stakeholders
in the larger military and intelligence community set up as well as for the American people. For
instance, the personnel, departments, work groups, business units, and facilities of the US Army
EOD have been working interdependently to create value for the American people and the US
Army. This has been made possible by developing strategic alliances with other partners,
effectively utilizing key resources and performing key activities to create value proposition,
effective customer relationship and segmenting, employing effective channeling strategies, and

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effectively using public funding to develop a value-driven business structure. However, there are
a few areas that the organization needs to improve in its business model.
Recommendation
The main weakness of the organization is its overreliance on federal funding, which
means that its spending is limited to the funds availed to it by the DoD through the US Army. It
is therefore recommended that the organization look for alternative ways of generating revenue
streams. This is could be improved by engaging more on international taskforces or rendering its
services to foreign governments by offering EOD training services to foreign armies and by
helping them deal with ordnance and other explosives especially in war torn areas.
The organization should also consider expanding in operating areas to other states in the
US. This will be significant in delivering its value proposition in a more efficient, faster and
cost-effective manner as its channels of distribution would be closer to the people considering
the expansive nature of the US as a country. One of the major challenges that will be faced by the
US Army EOD is how it deals with new and emerging threats (such as terrorism) as a result of
new technologies. It is therefore recommended that the organization continuously invests in new
technology, and train its personnel in order to keep up with the new technologies and
developments in war tactics.

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