Why are business model improvement solutions needed in business?
Every business is a kind of system that integrates different stakeholders and their expectations, different resources and abilities, activities, and processes. It is through a unique value proposition, hard-to-imitate resources and capabilities, processes, and different financial mechanisms that a business creates social, environmental, and economic value, transfers it to the consumer and reaps the benefits. A deep understanding of the business model and the identification of the links between its components enables a deeper understanding of the essence of the business in question and the prerequisites for its competitiveness, to find unused improvement opportunities, to identify problem areas or to prioritize the creation and implementation of innovations in a certain area. To examine all these aspects, the structure of the business model is used, which helps to purposefully use specific tools and research methods in order to find improvement solutions easier and faster.
Companies improving their business model should pay enough attention to clarifying value propositions, getting to know consumers and their expectations, identifying essential processes and the resources and capabilities required for their execution, costs, and characteristics of partners, structuring sources of income generation and sales, and communication channels.
What are the benefits of business model improvement solutions for business?
First, a business model that meets the latest market trends (e.g., digital transformation, sustainability, innovation, etc.) can expect long-term benefits measurable by quantitative and qualitative indicators for all stakeholders. Second, in the daily routine, a company that knows its business model well and its areas of improvement can set much clearer long-term and short-term goals covering different activities. Third, business model innovation enables businesses to grow and gain long-term competitive advantage in a dynamic market.
Designing business model improvement solutions allows companies to:
- Better understand the essence of the business being conducted and the structure of the business model and the links between its most important parts;
- Identify business model improvement areas;
- Make long-term and short-term business model improvement decisions with the help of specific tools and research methods;
- Implement business model innovations to gain a competitive advantage.