Discuss about the Business Model Innovation Analysis and Cases.
E-learning video, talks about strategy, what is strategy? Key ideas that are available in the video are strategy and comparison between the ancient strategy and modern strategy. For achieving one and more goals a person need to plan and that planning process define strategy. In other words we can say that strategy is the process or method that is formed to achieve goals (Freedman n.d). Strategy word derived from a Greek word -strategia, which means “the art of general”. In the ancient time kings or ruler make strategies with the goal of winning the war, at that time it was basically “the art of war”. For winning the bar they make strategies like vision; vision means seeing or forecasting that what the competitive party will plan to defend or orchestration; it says coordination and planning for the war, basically for achieving the goal. In the modern times, strategy keep changing according to the demand of the organization or company, for achieving the goals each and every company make different strategies and there parameters for making strategies changes Management as time changes (Kryscynski 2015). Nowadays each and every organization thinks for 4 basic things for making strategy or for achieving goals, those are:-
- Where do we compete?
- What unique value do we bring?
- What resources/capabilities do we utilize?
- How do we sustain unique value?
These are the four questions that arise whenever a company thinks for introducing new product in market. Over here the first question arise that is where do we compete? This question is asking for a particular place or market in which company wants to launch the product. They need to decide the potential of the company, which decides that company; will be able to compete in foreign market or not. Other way of deciding the place where company can compete is: - any market that should be near to the location of production or market where company can easily adapt local conditions. Second question: - What unique value do we bring? Unique value needs innovation, companies have to think for innovative ideas that is not available in the market and that can survive in front of competitive companies. Thirdly What resources/capabilities do we utilize? Resources that are easily available to company are the best resources but they have to make a plan that how they can actually utilize those resources. Forth question: - How do we sustain unique value? Company needs to put efforts for sustaining in the market by making proper strategy. Strategy leads to some positive changes such as leadership ability, decision making, transparency, and innovation, make person responsible (MacIntosh, Beech, McQueen & Reid 2010).
Benefits of the applications
Personally, strategy plays an important role in each and every thing. In our day to day life there are many situations in which we need to follow strategies. Example – personally, being a consumer I visited online website where I found good products for myself, then i placed order for one of the product and when I received the delivery of the product I did not like the product. Question arrives what should I do now? Where should I claim for the return of the product? For that I have to make strategy first question either I should call to support team or I should mail them, another question was shall I ask for refund or replacement or can say for different colors or pattern of the same products. I decided to talk to the company and will ask for some suggestion, so the process includes the strategy what to do or what not, that need to be planed before doing implementation. Talking from the organization point out view how they make strategy and do they implement those, would they get benefits. Example: - IKEA, well-known furniture company that followed different market strategy, the company order for the mass production of pre-assembled products and then they design the furniture and sell it after assembling it. Placing order in bulk will reduces the cost of furniture (Lutz 2015). This helps the company to provide cheap product and talking about their customer service they provide immediate solution to customer. This customer provide immediate fulfillment of customer requirement. Now, IKEA needs to change their market strategies if they start producing the furniture definitely they will earn more amount. The company is aware about the market conditions so by implementing the strategy they can easily decide where they have to compete or not. The company is providing unique value to the customers by making the self-assembled furniture, if they want they can try more innovative ways. Company is aware about the resources as they are using those resources but they should identify some more resources through which they can start up with self-manufacture process (Lutz 2015). They have a good brand value in the market so there is no need of any strategically plan for thinking about the sustainability of the company.
Business Model Innovation
E-learning video, talks about Business model innovation, what is Business model innovation? This video give ideas such as: - success through business model innovation, innovation needs advance technology but advance technology is not an innovation and it shows that business model includes; initiation, ideation, integration, implementation. Business model innovation is the process of the development of new, unique concepts supporting an organizational financial viability, including its mission and the processes for bringing those concepts to fruition (Routlegde 2014). Business model innovation includes four questions: - who is target customer? , what company offers to customer? How do you value to proportionate customer? And how does company generate revenue? These questions need to be answered by company while making the business model innovative definitely company will think that to who, company wants to sell their product, who will be targeted audience. Company has to decide and think for the innovative product that company wants to sell to the targeted audience. Customer service should be best; this is the moral duty of organization to think what the need of customer is? And fulfilling that need and providing customer best customer experience is must. At the end there is a point of earning profit; variety of product will attract more and more customers to buy the product and innovation in the products will lead to the curiosity among the customers to buy the product which ultimately leads to increase in the profit (Gallen 2013). Some other ideas related to business model innovation are: -effective opinion for business, business model patterns, understanding the situation or business model, proper communication to the employees (Remane, Hanelt, Tesch & Kolbe 2017). These ideas clarify that there is a requirement of effective thinker for business model and that person should be aware of market conditions, according they can make model innovative. That model should be communicated to the employees so that they can actually keep few thinks in mind and can work according to that.
Benefits of the applications
Personally there are many day to day innovative things, dominos has innovated one of the best innovative model which says that if you don’t get ordered pizza in 30 minutes you will get free pizza. Innovative model attracts more and more customer towards the domino’s pizza. Placing order from dominos is the best thing to do on weekends when you know that may be you will be able to take advantage of this innovative model. This model increase goodwill of company and made the doors open for profit. Talking from the organization point out view, with the help of business model innovation they have fulfilled the needs of customer and provided new products and company was successful in achieving goals. Example: - Apple well-known company, one of the successful organization. In the early 2000 century apple made changes in the business model that resulted as a successful business model innovation. The company expanded the products market from desktop customer market to iPod, iPhone, and iTunes; this ultimately creates the way of earning profit to the downloadable music (Dudovskiy 2017). For making business model innovative Apple followed four steps:-
- Initiation- it means starting of new model or beginning of plan, in the beginning of early 2000 century Apple thought to make new product by using advance technology, over here there was a need of innovative idea so they started making plan for this.
- Ideation: - it is the process of generating the ideas or forming and relating the ideas with business. Apple got new ideas for the initiating the new products which helps in earning profit and increase the brand goodwill.
- Integration: - it is a strategy where a company expands its business operation into different steps on the same production path. Apple expanded its business with the production of different products such as Apple watch, iPod etc.
- Implementation: - It is the process of exaction of plan, model, idea, and specification for doing something. Apple started implementing once the plan is ready.
These are the ways of making the business model innovative and company should focus on one model at a time, and they should make sure that there will be clear communication of business model; before making Communication, Company should get top management commitment (Dudovskiy 2017). Apple has followed the innovative business model same like this; there are many e-commerce business made innovative models such as EBay, Amazon, McDonald’s etc.
Dudovskiy, J 2017, Apple Business Strategy – Product Differentiation in Design and Functionality, viewed on 26th April 2017 < https://research-methodology.net/apple-business-strategy/>.
Freedman, L n.d, Strategy; A history, Oxford university, New york.
Gallen, St 2013, Business Model Innovation, viewed on 24th April 2017 <https://www.youtube.com/watch?v=B4ZSGQW0UMI>
Kryscynski, D 2015 what is Strategy, viewed on 24th April 2017, <https://youtu.be/TD7WSLeQtVw>.
Lutz, A 2015, Ikea's Strategy for Becoming the World's Most Successful Retailer, viewed on 26th April 2017 < https://www.businessinsider.in/Ikeas-Strategy-For-Becoming-The-Worlds-Most-Successful-Retailer/articleshow/45904642.cms>.
MacIntosh, R, Beech, N, McQueen, J & Reid, I. “Overcoming” change fatigue, Journal of Business Strategy, vol.28 no.6.
Remane, G, Hanelt, A, Tesch, JF, Kolbe, LM 2017, “The business model pattern database”- A tool for systematic model innovation, International Journal of innovation management, vol.21, no.1.
Routlege, AA, 2014, Business model innovation; concepts, analysis and cases, First edition, New York.