Discuss about the Business Innovation for Sustainable Business Development.
Business model refers to the plan of organization that is required by organization to attain its goals and objectives. The goals and objectives of an organization relates to the identification of the targeted customer base, identifying the sources of funds and the various areas for revenues (Bocken et al. 2014). A business model is important for an organization to discharge its operations and to devise strategies and approaches that it wants to achieve. A company undergoes regarding the evaluation and selection of business model (Amit & Zott, 2012). Therefore, it can be viewed that that certain business models are disrupted and exchanged with new models to achieve its goals and objectives. Companies adopt exploitation of innovation to increase the benefits attained from innovations.
A business model is a plan or strategy that a company uses to attain its goals and objectives. The goals for most companies are to maximise the profit and to make sure that the company expands and grows in the process. A business model is an abstract depiction of a company. It integrates the various processes of a company and highlights the various strategies and approaches taken by a company to achieve its objectives and goals in the process. A business model is developed by aligning the goals of an organization with the structure of an organization.
There are various types of business models. Some of them are:
“Bricks and clicks model”, “collective business models”, Direct sales model” etc. These are some of the business models that are used by companies to achieve its goals and objectives. Disruption displaces and changes a present industry and technology and leads to the creation and production of new and efficient strategies that would help the company to achieve its goals and objectives and in the process attain its goals and targets. Disruption refers to the creation of new models, strategies, which are usually at the cost of the destruction of existing and old models. The purpose of disruptors is to create and develop new and better business models at the disruption of old models (Ray, Bergen & John, 2015).
Companies try to utilize the exploitation of innovation. Innovation is an important element for a company. Innovation helps a company to utilize the probable opportunities to improvise the strategies and technology that a company uses to carry out its business operations. Business is becoming dynamic in nature and most business houses have replaced their old business models with new business models to attain efficiency and progress in the business operations. The cut throat competition from the rival makes it necessary for a company to explore and exploit the innovation at its disposal to remain ahead in the race and consequently achieve competitive advantage in the process (Ha, Jung & Eom, 2015)
Walmart is a multinational retail organization. It is a reputed supermarket that deals in various products. It has a large customer base and has a good market share. The company enjoy good brand value across various countries. The current business environment is undergoing a rapid change and transformation (Khanagha et al.2014). The competition in the retail industry is undergoing rapid change. As a result of this, various companies in the retail industry are adopting radical changes and transformation to suit their goals and objectives and to ensure their sustainability in the business environment and development. It is very important that a company makes necessary changes to outlines the changes in their strategies and approach (Schaltegger, Lüdeke-Freund & Hansen, 2012)
It can be seen that Walmart from the very beginning sustained its leadership globally in the retail organization by focusing on the low pricing strategies. The company embarks on the principle of providing products at low prices. Walmart focuses on the strategy of EDLC, which is stands for “everyday low cost” and EDLP “everyday low prices” to help the company to become a leading and a global giant. The previous model of the company was “Value Added Reseller” Model. This model highlights the fact that a business house manufactures a product and other business houses resell these products, with certain level of modifications. These modifications are in the form of improvement in the quality of the product or modification in price. These amendments to the product are largely based on the type of industry they function. This model helps in quicker development cycles. However, it was seen that owing to changes in the retail environment and greater competition from rivals like Tesco and Asda, Walmart made radical changes in the strategy and approach to survive in the competition. The company changed the business model and adopted a new business model, which was “loyalty business model.” The changes in the retail environment and changes in the taste and preferences of the customer have led Walmart to make conspicuous and radical changes in the business model of the company. The vision and mission of the company is to increase the profitability and to provide customer service. It understands the needs and preferences of the customers and made its strategy and approach accordingly (Fraering & Minor, 2013).
The previous business model of the company, which was “value added reseller” model majorly stressed on the distribution of the goods to customers to increase its profitability. It followed the traditional marketing approach, which was to make sure that the good was provided to the customers. It embarked on the supply of goods to the customers (DaSilva & Trkman, 2014). Thus, this was the outlining factor of the “value added reseller” model. However, the current and new business model disrupted the previous business model of the company. The main features of loyalty business model are that it increases the loyalty of customers and assures the customers and other stakeholders that their demands and interests will be met. This business model is critically designed on the fact that companies have to make sure that desires and needs and demands of the customers are met. Customer satisfaction is a major element that of the modern definition of marketing. The modern definition of marketing stresses on the fact that customer satisfaction is the main element of marketing. The latest business model, which is loyalty business model, is majorly dependent on customer loyalty. It embarks on the customer loyalty and brand loyalty is the deciding factor for the success and growth of the business.
Wal-Mart’s old business model was disrupted by the new business models. The old business model emphasised on the distribution of goods house to the customers. The new business models however, included more dynamic and innovative approach of customer loyalty. The current retail environment embarks on customer loyalty as a method to increase customer base.
Wal-Mart’s current approach is to provide convenience to customers and provide goods to customers at low prices. The low prices and superior customer service is the main advantage of the company. Wal-Mart had recently adopted the concept of “one stop shop” as a means to provide convenience to customers (Jindal, Chintagunta, & Dhar, 2015). It embarks on the point that customers should get a variety under one roof and a variety of products were available to customers. As a result of this, customers get hassle- free shopping privilege where they are able to get the products and a variety of products under one roof. In addition to this, the company introduced the policy of card benefits to the customers. It is a part of the loyalty program that the company has adopted.
According to this loyalty program, loyalty cards are provided to the customer, which provide discount facilities and convenience to customers. This is an element of customer benefit package that is provided to the customers. This encourages the customers to purchase products from Wal-Mart and in the process increase the customer loyalty. The customer base of the company increases in the process and thereby it strengthens the position of the company in the retail industry. Another fact that can be noticed from the current business model is that company has embarked on low pricing strategy (Breaâ€Solís, Casadesusâ€Masanell, & Grifellâ€Tatjé, 2015). Low price is an asset for the company and it increases the customer satisfaction and positively affects the buying behaviour of the customers. One fact that can be observed from this fact is that the company does not compromise with its quality. Innovation has been explored and implemented by the company by employing technological advancement in the store setting and in the increase of the product value and product portfolio of the company. The after sales service of the company has been of great quality and a friendly approach has made to improve the customer satisfaction (Breaâ€Solís, Casadesusâ€Masanell, & Grifellâ€Tatjé, 2015). The development of the online channel and the attractive and effective web page of the company is a great catalyst for customer satisfaction. The online channel is an effective way of increasing customer satisfaction.
On concluding the essay, it can be seen that the Wal-Mart has adopted new business model, which is “customer loyalty model”. It has been seen that this model disrupted the old model of the company to exploit innovation. The cause of the disruption of the old model was regarding the new strategies and approach that was required by the company to achieve high profitability, build a strong customer base and thereby become a superior name in the retail industry.
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