INNOVATE BUSINESS MODEL
A business model describes the rationale of how an organization creates, delivers, and captures value for itself. It is the blueprint for a strategy to be implemented through organizational structures, processes, and systems.
Definition brings clarity to one of the most sloppily used terms in business; they are often stretched to mean everything - and end up meaning nothing. And when it comes to concepts that are so fundamental to performance, no organization can afford fuzzy thinking.
It is critical to reach a shared understanding of the definition, elements, patterns and approach before we can commit to innovating the business model. This allows us to describe, manipulate create strategic alternatives, systematically challenge, and innovate on the business models.
Now more than ever, companies are systematically pursuing value innovations by looking across the conventionally defined boundaries of competition - across substitute industries, across strategic groups, across buyer groups, across complementary products and service offerings, across functional-emotional orientation of an industry, and even across time.
A growing imperative for management of businesses today is the need to transform themselves. They are clear about how they should focus-expand-redefine cycle of the core of their business. But the cycle has accelerated significantly over the decades. New technologies lower costs through innovation, shorten product life cycles, even prompt innovative business models. New competitors shake up whole industries. Capital, innovation and talent flows more freely around the globe.
No matter the industry, a corporation consists of business units with finite life spans; the technological and market bases of any business will eventually disappear. Disruptive technologies are part of the cycle. Companies that understand the process can create new business models to replace the ones that must inevitably die. Companies must give managers of disruptive technologies free reign to innovate and realize the full potential of the technologies - even if it means ultimately killing the mainstream business and innovating new business models that thrive in the current time.
Elements of Business Model
Business Model Canvas
The 9 elements described above become the basis for a handy tool called the Business model Canvas. This canvas works best when printed on a large surface so groups of people can jointly start to sketch an discuss the business model elements using post-it note or board markers, in a co-creation session.
Business Model Patterns & Design
Beyond selecting the right elements for your business model, arch-typical, reusable patterns exist with similar characteristics, similar arrangement of business model elements, or similar behaviors. Some business model patterns include, Unbundling Business Model, the Long Tail, Free as a Business Model, Bait & Hook Business Model, Multi-sided Platforms, and Open Business Models. New patterns based on other innovative business concepts are emerging.
Business Models are designed by using tools and techniques in the design profession. During the business model design process customer insights are brought in, ideation, visual thinking, prototyping, storytelling and scenario analysis is facilitated by breakout teams.
Explore Alternatives, Desirability, Feasibility, and Viability
Several alternatives are produced taking into consideration various factors. We will have a slew of alternatives that pursue different opportunities in different permutations and combinations. We will set up applicable evaluation criterias and converge on the right business model based on the environment (trends & forces), perspective (SWOT), feasibility (resources, activities, partnerships), desirability (customer need, relationships, channels, value proposition) and viability (cost implication vs value creation)
We use a co-creation exercise that brings together various best practices into an accelerated solution environment to problem solve the crafting of your value proposition with the optimum fit withe customer profile. The search for the right fit of your value proposition to your target customer segment is a continuous back and forth between designing prototypes and testing them. The process iterative rather than sequential. The goal is to test ideas as quickly as possible in order to learn, create better designs, test again, and evolve. As you create alignment, measure and monitor, improve relentlessly, and reinvent yourself constantly, you will create value proposition that sell embedded in business models that work. Companies that are leaders in their space, do so continuously. They create new value propositions and business models while they are successful.