What is business model innovation?
What does business modelling help you do? Finding a problem that needs solving is often the first step of starting a business—but how will you make money? Here is where your business model comes in.
The type of business model you adopt depends on a lot of factors. A business model defines how the enterprise delivers value to customers, gets them to pay for that value, and converts those payments to profit.
For many , business model looks like this: I buy A, add some value to it, and sell it as B. If I sell it for more money than the cost of buying the raw materials and work and adding the value (which includes paying employees, operating my store, etc.), then I make a profit.
However, innovative business models go beyond this simple formula, you need to
- Create customer loyalty
- Make value in unusual ways
- Define new products or services that people didn’t know they needed.
Take water dispenser like CWAY for example – You buy a dispenser once, but you have to continuously exchange your empty canister and buy a new one filled with water. In this way, the company ensures a steady and continuous revenue source. That is what business model innovation is about, it is a very important part of business strategy.
Today’s business model innovators are creating value using technology and through social media, leveraging their expertise to create products.
So what about you? How will you create value for your company and your customers? , how do you create that value in a way that customers keep coming back for your products?
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