Business Model Innovation: What Is It and Does Your Business Need It?
There are always two ways of doing things. One is the refined and composed way, whereas the other is the haphazard way. If you opt for the former method, your operations and functions follow a standard procedure, and you can control the outcomes in a much better way. You will have more leverage to tackle internal and external challenges, and your processes will be more resistant to disruption. Likewise, you will be able to incorporate the necessary changes at every stage.
It is always preferable to take the composed and well-thought-out route because strategic organizational changes must follow proper plans at different intervals. Consequently, business planning has become an inevitable activity for organizations worldwide. Business is undoubtedly one of the most inconsistent and trickiest activities of any economy. There is a plethora of different business strategies and business models to explore and utilize. However, timely innovation and alterations are crucial to ensure responsiveness to market dynamics.
Moreover, it’s imperative to examine your existing business strategy and plans carefully. You might have a well-working and robust business model, providing you with profitability for a long time. But there are chances that you still haven’t explored your business’s full potential. Your company might still have the potential to gain more market share and develop a more extensive customer base. It might just be lacking the necessary tweaks to the overall strategy and business plan. And that’s where you need business model innovations.
This article will help you understand what business model innovation is and analyze if your business needs it.
Business Model Innovation
In understandable terms, business model innovation focuses on modifying an organization’s business model to enhance value. It follows a specific pattern where companies alter their business model in line with the various organizational functions. Here, organizations transform their supporting activities, all the while improving their value proposition. Nonetheless, carrying out such transformations is no cakewalk, and you need talented resources to implement these changes.
For this purpose, you can either train your existing employee base or hire new ones. eLearning prospects have made it relatively easy for business professionals to hone essential skills and keep up with changing industry norms. So, it’s best to sponsor AACSB accredited online MBA programs no GMAT to your employees or hire people who possess such credentials. Such programs instill fundamental business knowledge alongside a thorough understanding of current business dynamics and trends.
But does your business need this innovation? Well, the answer is a straight “yes,” because survival in today’s business world requires companies to embrace uniqueness and innovation.
Let’s look at more reasons why you need it:
Moving ahead of the competition
No business can operate successfully without proper competitive analysis. Two things decide your fate in the business world. One is the competitors, and the other is your response to that competition. If competitors get the upper hand, consider yourself out of the market. If you develop a better strategy to tackle that competition, then prepare for market leadership. It is as simple as that.
However, moving ahead of the competition is not always easy. Different market elements might be favoring them. You might not have considered those factors while devising your strategy before establishing your business, but now you must. Business model innovations will provide you with the necessary window to update your business plan according to the competition. Netflix started with DVDs under the name of Blockbuster. However, they incorporated innovation in their business model and went towards digital content. Today, their success story is something everyone knows.
So, start with analyzing your current market standing. If you think you are lagging behind the competition, you are in dire need of business model innovations.
Process and product development
Every organization needs to evolve its market offerings continuously. Customer demands change within the blink of an eye as they have become adaptive to modernization and contemporary market trends. Therefore, your business should focus a lot on new product development. But that doesn’t necessarily mean producing an entirely new product. It can also be improvements to your previous products. How apple has developed/innovated iPhone over the past years is an excellent example of product development.
Technological input in business is rapidly increasing. Business operations are utilizing new machinery, new methods, and creative process flows. Every organization’s upstream and downstream supply chain is evolving with time. Therefore, process development has become equally important as product development. Ford Motors pulled down the assembly time of a car from 12 hours to 90 minutes. Now that’s some exemplary process development.
Business model innovations will take you back to the blackboard. It will allow you to redraw and integrate necessary factors to ensure process and product development.
Your business might be losing out because the competition provides more and better products at a lower cost. Take this as a hint that you need process and product development.
Social interactions, routine activities, and more complex elements like business are constantly changing with time. Therefore, we must keep an appropriate window to incorporate the necessary changes as per the need of the hour. Business models provide a comprehensive foundation for running your business machinery. But they are still susceptible to impactful external stimuli. So, you should always keep the capacity to take up necessary business model innovations at the right time.