We’re in the age of digital transformation for success and survival
Competition is becoming more globalized than ever. Take Netflix, for example. It has become so famous and widely used that it’s even competing with local cinemas in countries around the world. Instead of going to the movie theater on a Friday night, people would rather stay at home and have a Netflix night.
The power of the internet is truly undeniable. That’s why companies are integrating new technologies and undergoing digital transformation to stay head of the competition and survive the cutthroat landscape. Otherwise, they will be overtaken by big brands easily.
Another exemplary case would be that of Disney. For the longest time, they relied on TV, but have successfully innovated their business model in order to stay relevant and up-to-date. They strategically launched Disney+ to cater to the consumer’s growing needs.
Just a few days after its initial launch, it already amassed 10 million subscribers with over US$20 million in revenue. People already have been enamored with Disney for the past 100 years, and their decision to put their original content for streaming made it a smash hit.
Indeed, capitalizing innovation for the business model is turning into a necessity more than ever, but how exactly can you do it?
Recap: what is digital transformation?
We talked about it before. Digital transformation refers to the implementation of technology to simplify and streamline the company’s work processes on different levels. It involves everything from the very structure of the business down to specific in-house processes to how customers receive your products.
It’s not just about building an online brand presence, but it’s also offering value to your target market by revolutionizing a business model and tailoring all operations– internally and externally– to adjust accordingly.
It’s easier said than done, though. A lot of companies have been trying, but creating a disruptive business model that would give you a competitive advantage takes a lot of planning.
Here’s what you need to take into account:
3 Elements of a Business Model
Think of this as the “what” in your business model. Zott and Amit (2017) used IBM as a case to imitate. From being a hardware supplier, they have shifted to becoming a service provider in the early 1990s, instead. It worked well for them because they managed to earn at least US$48 billion in revenue by 2009.
Take-away question: What do you want to change in your business model?
As the name suggests, this element highlights how companies run the business model. To give a clear illustration, Priceline.com decided to partner up with various organizations (airline companies, credit card companies, etc.) and come up with a “Name Your Price” system for their products. This paved the way for a huge milestone that was recognized worldwide as an innovative way to draw customers in.
Take-away question: How will the new business model run?
Governance basically speaks about who will be involved in the revamped business model. Establishing key leaders in respective departments will allow the company to build itself in all areas effectively. It takes team collaboration in order to successfully change the business model, so this is a must.
Take-away question: Who will lead the business model?
4 Value Drivers for a Disruptive Business Model
That’s what a proper business model comprises. Now, to ensure a unique deviation, it’s imperative to look into these value drivers:
Your business model should offer something new. Think about what the market wants and needs. Keep it as fresh and exciting so that people have something to look forward to. A good example would be Airbnb’s introduction of sharing homes to fellow travellers.
For you to better understand, think of the iCloud. This cloud storage cannot be used with Android devices; it can only be accessed via Apple products. This is a smart way of “locking in” customers and perpetuating brand loyalty in order to retain customers whilst generating additional profits!
This is an additive to your current products. eBay, for instance, acquired PayPal in order to make payment more convenient for their customers. This easy and safe online payment propelled their sales significantly and prompted more users to buy more products.
Efficiency discusses the cost savings of the entire business via the interconnectedness of the operations. Wal-Mart devised an efficient strategy by incorporating cross-docking into its methodologies. Not only did it let them lower expenses and cater to more customers, but it also gave them a huge competitive advantage over its competitors in the retail industry.
In such a rapidly-changing environment, it’s vital to look at the bigger picture and address matters as soon as possible to be able to create a disruptive business model.
Be sure to take the time to build each component effectively. Retread your business model and look into the various value drivers. With the right approach at the right time, it will surely shake up the market.
In case you’re looking for qualified talent to help you on this aspect, get in touch with JB Hired and source the talent your digital transformation needs! Click here to read more of our insights on digital transformation and recruitment challenges.