What is Business Model Innovation?
Business model provides modified, unique concepts, models, abstract, supporting a company’s account and financial viability, detailing the mission objectives and the multiple processes for bringing those concepts to fruition. Strategy implementation of the business model of the company’s structure is an important prospect that provides an outline of the growth and prosperity in the global market scenario. The model is outlined evaluated and shaped by several factors such as resource availability, opportunity availability, distribution and supply channel in the existing market (Saebi & Foss, 2015). Documentation of the new business model will help in providing possible information that will help the organization to process vital procedure, following, adaptations in the market by taking care competitors in the market. Business model is the abstract set up that needs to be sketched and framed under certain policies accordingly plan strategic implementation that will enable progress in the market. Planning and setting up of business model does not only mean planning but adds more elements like gathering of data, learning and understanding of theories and administrative and operational models, application and implementation strategies, evaluation and identification of vital and essential factors (Bocken et al. 2014). It is important to plan and strategize the business model in relation to the study of the business theories. The study emphasizes on the business model innovation and ideas related that will suit the formulated business environment and enhance longevity and growth.
Business model innovation:
Business model innovation is a significant aspect in developing a business organization whether small or large in maintaining strong work structure that fosters communication, production, and global expansion. It is entrepreneurial innovative and creative ideas and opinions in improvising the global challenges and constantly updating technologies and meeting infrastructural needs that affect the external and internal productivity (Markides, 2013). A business model help in presenting abstract or partial representation within a business that will reflect the upcoming and future prospect and provide conceptual design about the graphical, architectural, infrastructural and financial arrangement. Therefore professionals need and architect needs to be appointed who as well as the strategic goals and objectives. With consideration of the objectives, strategy, ideas, opinions, and analyzing the organization’s internal appraisal involve strength and weakness of the organization. Besides, it evaluates the responsibilities and managerial values in generating the strategic alternative. The outcome of the implementation of the organizational strategic performance largely depends on the employee performance, human resource management, transport facility, cost control and management, social and environmental factors, resource allocation, control systems that will include measures, incentives, performance, evaluation and feedback while supporting structures and policies that will generate powerful consideration of overall growth and development (Martins, Rindova & Greenbaum, 2015).
Therefore, the importance of the business model lies as it provides the conceptual, textual, graphical that ensure interrelated architectural, co-operational, and financial arrangements formulated by organization presently in determining future prospect of the goods and services and analyze the existing performance and productivity (Kastalli & Van Looy, 2013).
Figure 1: Business model innovation
(Source- Rayna & Striukova, 2016)
Business model innovation help in formulating and examining the technologies required for the of brand-new markets in delivering existing products and also promote the new products and services that need to be produced under existing technologies in meeting the existing market structure. Furthermore, it is even important to assess the factors of business development that are revenue, economic scale, employee structure, business analysis, social and political scenario, value, resale, promotional activities. Every successful company need effective business plan that will help in fulfilling the demands of the customer job. The model determines business to experience, business to customers, business to business growth that helps recognized organization in meeting the daily need and foster economic growth and development (Rayna & Striukova, 2016). The major areas that the business model tends to cover are the business vision, core values, competitive advantage mission statement, economic activity, through guiding actions and decisions, while creating product, performance and service portfolio in relation to the strategic, positioning and competencies. Therefore, with the set up of effective business model it is easier to evaluate the existing profitability, decision-making process in determining the identity, core resources, target customers, distribution and supply channel, customer offers etc. the company need to generate competitive advantage strategy towards business model innovation in meeting long run profits, and increase value provided to the customers (Casadesus & Zhu, 2013).
From the above study, business model stands as the significant procedure in setting up of a business utilizing entrepreneurial business ideas, models and theories that will enhance both short term and long term benefits. The company need to appoint professionals, architect and web planner who will provide the entrepreneur with clear and well-designed idea in regards to the business department that include, accounts, performance, marketing distribution, supply, production, investments fostering the business process. The process in setting up of the business model need to focus on three different levels that are evaluation, identification, implementation maintaining sustainable and empowering innovation. Together, it will enhance future betterment and strengthen the company in meeting the diverse challenges and changes created by external and internal factors such as competition, political, social, cultural, and economic factors. Besides, the company needs to train its members in meeting the company’s targeted goals and objectives. Training should ensure healthy communication that results in cooperation and mutual collaboration and fulfill the daily productivity. In addition, the company needs to arrange funds, investments, stakeholders, trustee, sponsors who will help in the decision making process and provide new strategies that will help company in implementing the exact plan appealing the customers across the globe. Therefore, mutual involvement is necessary in setting up of any business whether small or large that caters to the overall development and strengthens company’s understanding and foster economic and social development. Furthermore, the business model helps is to strengthen the business to business administration and business to customer development, which allows commercial transaction with another fostering business in sourcing materials for their production process.