REINVENTING YOU BUSINESS MODEL
Part A. Basic Concepts and Ideas
1. Article covers the idea about reinventing the business model. Great business models can reshape industries and drive spectacular growth. Yet many companies find business-model innovation difficult. Managers don’t understand their existing model well enough to know when it needs changing or how to change. Article also covers the idea about building sustaining and successful company. 2. Business Model definition: A successful business model has three components a. Customer value proposition - The model helps customers perform a specific job that alternative offerings don’t address. (Ex: MinuteClinics enable people to visit a doctor’s office without appointments by making nurse practitioners available to treat minor health issues.) b. Profit formula - The model generates value for your company through factors such as revenue model, cost structure, margins, and inventory turnover.(TATA Group’s Nano car is profitable as they reduce many part and Vendors which reduced cost and sold the car in huge market) c. Key processes - company has processes rules, metrics, and norms that make the profitable delivery of the customer value proposition repeatable and scalable. d. Key resources – Company has the people, technology, equipment, information to deliver customer value proposition profitability.(Ex: 3. Identify when a new Model is needed
a. An Opportunity to address needs which current proposition does not satisfy for large group of people (Ex: Scooter families in India cannot afford costly car in India). It may be new technology or to launch existing technologies in new market. b. A need to respond to shifts in competition or fend-off low end disruptors. 4. Decide whether reinventing your model is worth the effort. The answer’s yes only if the new model changes the industry or market.
Part B. Implications for...
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