In the last few years, business model innovation, as a concept, has gained considerable popularity. Product or process innovations cannot bring around as much of an impact on the productivity of businesses that business model renovations can. This is why it is beneficial to leverage business transformation advisory to devise business model innovations that have the potential to disrupt the market and improve the sales growth graphs.
The business model depicts how a company operates and what its aims are. It basically conveys the following four integral elements:
- Target customers
- Value and benefits that it aims to bring to its customers
- How is worth created for their customers?
- Earning model of the company
An ideal business model would clarify the above-mentioned objectives. Business model innovation works on several integral elements of a business. The following example perfectly explains the concept.
An electronic equipment manufacturer modifies its business model and shifts from the sale to sales plus rental. This particular transformation changes its target customers (opens up their customer base to people with lower budgets and transient need), revenue model (‘sales’ in revenue model remain intact and rental income is an addition), process (there would be significant changes in business operations), and a lot more things.
Reasons why business model innovation is integral
- Improved value creation
Businesses may reach a growth plateau at a particular time if they don’t bring a change in product, process, revenue model, or other important elements. A well-planned business model innovation works on several aspects and therefore is capable of preventing a growth plateau situation. More value can be created with such transformations that lead to increased growth.
- Difficult for competitors to copy
Business model transformations generally involve major changes and therefore are difficult for competitors to copy. Businesses that have revamped their business models can enjoy a long and extended period of competitive edge.
- Prepares businesses for market cycle disruptions
Many business model renovations automatically make a business relevant and less sensitive to unexpected market cycle disturbances. The best example in this regard would be businesses equipped with artificial intelligence tools to digitize their processes. During the COVID-19 pandemic, such businesses were more resilient compared to traditional business models.
The above-mentioned are some of the benefits of business model innovations that make digital transformation integral to businesses. If you’re a business planning for something similar, get in touch with seasoned advisory experts at Millennial Partners.
Leverage artificial intelligence consulting services & business transformation advisory to create a digitized, better business model:
Millennial Partners (millennial.ae) prides itself on serving clients’ most pressing organization transformational needs across people, processes, and technology through its own proprietary frameworks. Our digital transformation offering is most relevant to the increasingly digital enterprise and consumer environments. We follow a coherent roadmap that includes incorporating the most cutting-edge technologies and vendors focusing on technologies such as enterprise Blockchain, Artificial Intelligence, and IoT.
Should you have any questions and/or would like some focused professional advice, please don’t hesitate to reach out via our e-mail at email@example.com.