Strategy of Business Model Innovation

Question: Discuss about the Strategy of Business Model Innovation. Answer: Synopsis and Application of What is Strategy? Here is a discussion of what strategy is and what is not. Today we will read about some strategy documents documented from real time companies. The strategy of a company is to provide on low costs working on a global level The strategy is also for providing a set of regional acquisitions. The strategy is also to provide unparalleled customer services. One has to be the first mover in every aspect. The main strategy is to move from defense to industrial apps. What have they in common? None of them are strategies. They are goals, tactics and objectives. They can be said to be small goals which is a part of an overall objective. The word strategy is more like a buzzword misused and overtly used by companies and individuals when making presentations or proposals. Now the questions still remains that then what is basically a strategy? To answer this let us first understand what not a strategy is. The word strategy comes from a Greek word Strategos signifying the art of the general. It was basically associated with the techniques used by a general in a war in olden times. A good strategy provides answer to the following four questions Who is our competition? By this it can be said what competitive markets or arena one will be active in. By market is meant, industries, product markets within those industries and geographic markets. Why will the customer choose your product and services instead of others? By this is meant what is the unique value the product or the services brings in that makes them win. Unique value can be cost or differentiation in terms of looks, appearance, images, customizations, design, reliability and many more What resources are used to deliver this value? By this it asks whether we have exceptional human capital, superior tech or unraveling net connections or unique reputation. Resources generally are tangible things that we have in our toolbox. They can also be intangible like reputation. Capability is our ability to use such resources to create a value. How can one sustain to keep on providing that value? This last question asks focus on understanding what are the factors that help us keep winning over time (Kryscynski, D). Application of Strategy The application of this term and the use of strategical values for the matter of growth of a company is applicable to every organization known today. Every company today makes strategies; however, the more important point to be considered is that how the strategy is made and how it is applied to the working of a company. I would like to apply this mode of Strategy to the Bakery around my region. Although the Bakery is able to offer some exceptional products; however, it is not able to reach out to the maximum number of customers, given the competition. Hence, it is important for the Bakery to reach out to the maximum number of customers in the region. Video 2: https://www.youtube.com/watch?v=B4ZSGQW0UMI Business Model Innovation: The video primarily focuses on the need for Business Model Innovation. It has been pointed out that even corporates such as Nokia and Kodak lose their edge because they fail to gather proper RD resources, top employees and profound knowledge of the market in question. Also, the most common mistake done by all of them was the fact that they all left the time when they should have left their success path and reached out for a new Business Model. Innovation either increases the customer value of service or decreases the cost. In both the cases, the company gets a competitive advantage when it leads a path towards innovation. Some misconceptions about innovation include: Innovation stems from ideas that no one has ever thought about before Big success calls for big resources It is based on fascinating technologies An innovative business model gives answers to 4 important questions: What is the target customer? What is offered to the customer? How is the value proposition created? How revenue is generated? An innovative model may change, answers to any two questions given above may change as well. The video shows the presence of 55 business model patterns. Some of these include, flat rate, supermarket, experience selling and ecommerce etc. The razor and blade pattern has been applied by many companies known today. In order to proceed with the business innovation, the four most important steps that should be included are initiation, ideation, integration and implementation. After the pilot is launched, every company must do a qualitative and quantitative analysis of the pilot in order to understand the problems that may arise in future. Some important rules to be considered include application of one business model at a time, clearly communicating the need for innovation, emphasis should be on long term returns only and top management commitment should be accounted as well (HSG, 2013). Application of Innovative Business Model: A number of companies have applied innovative business models in the past. Companies such as Samsung require the need for the application of RD business model to innovate new products so as to meet the competition proposed by the smartphone and tablets market. The company may consider the application of the model with respect to a dedicated set of RD department with some top employees who understand the intricacies of the market and can work towards the development of the plan. Taking this into consideration, the company will be able to put together a comfortable plan to give a new set of products to the market that are competitive enough to take down the other competitors such as Apple and Amazon Kindle. Hence, the company needs to work towards the development of new ideas which either take down the prices or help it increase the value for money being provided to the market in general. Samsung has recorded lesser number of sales in varied markets as compared to other competitors and hence it needs to work towards a different business model that rejuvenates the faith of the people in the brand after consistent complaints about the hanging of the smartphones after much use of apps. References Kryscynski, D. (2015). What is Strategy. Retrieved from: https://www.youtube.com/watch?v=TD7WSLeQtVw HSG Unit St. Gallen. (2013). Business Model Innovation. Retreived from: https://www.youtube.com/watch?v=B4ZSGQW0UMI