The world is going through a lot right now and with some businesses on the verge of collapse, there seems to be a growing need for adaptation to the times. And while this seems to be a good idea, just by thinking about all the benefits, a lot of consideration goes into it. Executing the change takes a lot of strategic decisions to make sure your business can handle the shift and really gain those advantages.
The purpose of a business model is to guide a business to success. Or in simple terms a plan that outline how an organization will make money, which goes beyond just pricing, and usually this plan or guide is tailor made to suit an industry or the market trends. And if the generation of the model is centered around strategic choices concerning things like identity, resources, target customers, supply chain and channel strategy as well as valuable products & services, the business is likely to be on the right track- for the most part.
How do you know it’s the right move?
As mentioned, the business model will depend on what is happening in your industry or your external economy, becomes relay useful where there is either rapid economic growth or when things are falling apart, like in our current situation. So, businesses that are rethinking their business model now won’t be doing themselves a disservice. This will help them highlight any loopholes in the model and seek new ways to make profit. Some things to consider include what the change will mean for the business in general and specifically i.e. customers, employees, partners. You also have to figure which part of the model needs innovation and the skills, technology and other resources needed to make the change.
How to ensure the change is effective?
Especially during economic turmoil, the general rule of thumb is to start with what you have. This means evaluating the existing capabilities and assets to see how they can help with the innovation process. This prevents you from making unnecessary expenditure that will only cost you more. If possible, create a partnership with your stakeholders i.e. customers, suppliers, partners etc. so that you can have a mutually beneficial relationship. The chances are that they also need the assistance and so this will make it easier to go through the…