Since the covid-19 pandemic hit the face of the earth, many changes have had to be embraced, businesses have had to shift their focus to be more technology-oriented to meet customer demands and remain competitive in the market. Business enterprises heads and corporate leaders have to be more vigilant on how they handle their businesses else they risk being irrelevant or be thrown out of the market. For an agile startup, technology is a priority, and digitalizing the cooperate is currently the most effective way of getting more customers and meeting customer satisfaction.
A good example of this is the way mobile apps have affected the taxi industry. Before these technological inventions, one had to know a taxi driver and have their contacts or go to a taxi station to get the services you need. However, the invention of mobile taxi apps such as Uber has brought a mind-blowing change in the taxi industry; whoever does not align along with these changes risks being out of business better known as business model innovation (BMI).
The technological power and BMI solely depend on the ability to solve both modern and existing problems in a better, accurate, and reliable way to bring in value. When leaders think of trying BMI, they should take Uber as a good example. Their main aim should not be to create technology from scratch but rather to improve on the existing ones and give it more value, make it more reliable and user friendly.
So, how exactly does this work from a real business perspective? Below are some perfect examples that will give you insight into BMI and more.
Proper Sequencing of Business Processes
There is no better way of making informed decisions than resequencing business processes. By so doing, you can do thorough research on your business models and make better decisions with lower risks involved. A good example of this is Michael Dell who started a business model that allowed their customers to optimize and customize their computers to suit their needs by use of a highly effective process.
Resequencing is not new in the industry; it has been widely used and has been known to bow results.
“Time is money”, this famous quote has time and again proven to be true. Zara, a leading world fashion powerhouse got to its position by merely resequencing its business models. Instead of focusing on the type of manufacture they did, Zara shifted gears and started focusing on timely deliverance of their products such that they are available for customers only four weeks after manufacture. By using that speed of delivery, Zara was able to produce trending garments at the right time; which greatly boosted their profit margin.
Modern 3D printing technology has also come in handy for manufactures as it promises a profitable future and increases custom design.
Value Chain Risk Transfer
In business, we all desire a win-win scenario where the consumer does not stand the risk and the supplier can absorb it. Business models have been invented that remove business risks from the consumer and take it to the supplier who can absorb it due to the low cost of capital.
This has been greatly been influenced by the use of the PaaS (product-as-a-service) model which allows companies to offer services for their products.
Four Main Steps for Business Model Innovation
As soon as you have fully understood and internalized how technology can be used in business models, you need to put all the knowledge into action.
Below are the four recommended steps that will undoubtedly help a lot in business model inventions.
- Value Chain Risk Measurement. Are you handling artificial or real risk? Which risks are more critical? Among the risks, which have the greatest potential to payoff if proper management maximized? Once all these questions are answered, you can be sure of your business model.
- Change of Risks. Make a good decision on how you are going to allocate your risks for proper management.
- Experiment The Innovation. Unfortunately, this is the most important step that most people often ignore thus leading to their failure. For you to know how successful your BMI is, it is important to experiment on it.
- Roll out The Innovation. Once you are done and sure of all the above steps, roll out your BMI.
For any business to be successful, there have to be ways of making it easy for the business to grow. BMI helps businesses grow and if well used, can attract potentially more clients making the business have more profit.