The "business model" was first introduced extensively through personal computers and the method of building imperious spreadsheets. The evolution of the spreadsheet equipped businesses with an analytical approach to generating line items to test critical assumptions strategically. The model describes how a company creates and captures value, establishes the value proposition, and expresses the implementation of the supply chain to deliver product value.
In my view, the "business model" represents a system that brings together essential components to improve execution. I would imagine it should be of "no" surprise that many competitors are already fulfilling a "real" customer demand using a valuable business model. All-embracing business models are known to influence industries and drive sustainability, and dramatically advancing growth in pursuit of opportunity.
Dr. Alex Osterwalder, a Swiss business theorist, author, speaker, consultant, and entrepreneur, known for his work on business modeling and the development of the Business Model Canvas.
"The ability to execute on the current business model while thinking of the business model of tomorrow will ultimately be the difference between a company that is a one-hit-wonder and one that is here to stay."
The burgeoning of interest to modify the business model remains consistent with the acceleration of the product life cycle and homologous design that advocates reinventing the business itself. When the swiftness of change becomes aggressive, enterprises are becoming anxious to instantly produce the next "big thing" before it's too late. Many are improving their model in preparation for disruption, while others are emerging an intuitive customer experience. The model empowers businesses to see beyond the existing and weigh opportunities to formulate various possibilities and enter a new plateau that signifies scalability.
As executives review their current model, the aspiration is to discover methods of building a better product or producing a viable alternative for the price-conscious customer while sustaining market relevance.
Other applied methods include;
(1) Provide a "free" offering to obtain extensive use of a premium product to generate substantial revenues that represent upselling.
(2) Develop other products that are not directly associated with mainstream products while offering an extensive product line to enable cross-selling.
(3) The capability of providing a complementary product or service with a paid offering relevant to bundling.
The model provides a notable advantage that cultivates a competitive edge above another competitor. Implementing a unique business model can echo an unparalleled reputation throughout the market, creating a buzz between customers while boosting first-time purchasers. The fact that many businesses are exceptional at producing quality products, providing extraordinary customer services, or stimulating employee confidence - it should articulate a competitive advantage supportive of product development or services rendered.
Professor Muhammad Ynus, a Bangladeshi social entrepreneur, banker, economist, and civil society leader who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and Microfinance stated,
"Capitalizing on core strengths and knowledge, entrepreneurs can seize an emerging business model capable of creating and demonstrate a real, sustainable social impact in society."
The process allows businesses to address market needs concerning innovative solutions, cost analysis while assessing emerging markets. Furthermore, developing new initiatives and technological advancements that leverage critical improvements to entering new markets. The focus empowers the progress of new possibilities where it doesn't exist and builds an inherently competitive advantage indicating a leader in the marketplace. The results permit businesses to defend against disruptors and strengthen the ability to respond to market shifts.
Satya Nadella is the chief executive officer of Microsoft, succeeding Steve Ballmer in 2014. Before becoming CEO, he was the executive vice president of Microsoft's cloud and enterprise group, responsible for building and running the company's computing platforms.
"Information technology is at the core of how you do your business and how your business model itself evolves."
The potential of revitalizing the existing business model provides the consistency to challenge the competitive landscape, identifies new competencies that influence a transformational change to defend against the acceleration of competitive threats — revamping the model enunciates the existing components that currently describe success. The concept provides an in-depth view of the problem(s) solved that established the value proposition. The assessment of the current model, in comparison to the new expectations, presents an essential overview of the amount-of-change to process to leverage the opportunity. The challenge includes a comprehensive blueprint to illustrate the business processes and system requirements while emphasizing the applied methodology to reinforce strategic outcomes. Improving the model develops a new structure indicating key partners, activities, resources, channels, establishing customers, and the resources necessary to sustain a prosperous result.
It's painful that businesses continue to deliver products that are produced from surviving technologies to maintain market share while depleting their cash cow. However, reinventing the business model provides a closer look at opportunities without missing out on reasonable opinions to improve productivity and profitability. The utilization of the business model is essential to advancing critical decisions that collectively defines how a business receives revenue, incurs costs, and controls risks while modeling for change. The benefit provides the foundation to pilot trajectory, formulate market resolutions that indicate strategic advancements, and justifies revenue streams while decreasing cost and offsetting risk.
Steve Banks, a Silicon Valley entrepreneur, stated,
"Visionary CEOs are not 'just' great at assuring world-class execution of a tested and successful business model: they are also world-class innovators."
Reinventing the model serves a distinct difference between market innovators requiring a repeatable innovative business model capable of embracing market gaps where prominent growth resides. The reason for reinventing is an effort to map the future while transforming the company to maintaining a critical lifeline of significance. According to Forbes, as businesses mature sustainably, "70% become concerned whether the company remains relevant and competitive." The intention is to stay proactive by introducing new products to replace the obsolete while diversifying to formulate new opportunities.
William Mougayar, is a 4x entrepreneur, venture advisor and angel investor, who previously held senior positions at Hewlett-Packard and Cognizant. He is the founder of Startup Management where he blogs and curates on start-ups and the cryptocurrency economy.
"A token is not a short-term carrot, nor a stick for that matter. Just having a token doesn't mean that you have a working business model attached to it."
I would suggest expanding your knowledge and essential skills with our leadership development program, a 20-course bundle to increase integrity and consistency with individual and organization values.
Click to review our Leadership Development Learning Bundle.
Check out a FREE class on the Business Model Canvas
Have any questions, concerns, or suggestions - Click to email us.
Thank you for supporting BAM Consulting!