Let me start off by thanking the many readers who commented on my last blog, “What does today’s Supreme Court Ruling mean”. Today’s blog is a continuation, an encouragement for you to press forward in all circumstances. My challenge to you today is to examine your current business model and, if necessary, reinvent it.
In 2003 Apple introduced the iPod and the ITunes store. In less than 3 years that combination became almost a $10 billion product. The rest of the story is history, but did you know that in 1998 another company introduced the Rio, a digital music player? In 2000 another firm introduced digital music with the Cabo 64. Both products worked well and were portable and stylish, the question is, why did they fail and Apple succeed? Apple introduced a new business model. Instead of just selling a product, it gave away low margin iTunes in in order to sell the high margin iPod.
A Business model is made of parts that create and deliver value: (the following is taken from a book by Michael E. Porter, “What Is Strategy”?
- Customer value proposition: A successful company is one that has found a way to create value for customers, a value that other similar firms did not offer.
- Profit formula: the new model generates value for your company in the ways of profit, cost structure, etc.
- Key resources and processes: Your company has the people, technology, products and facilities to deliver this value proposition to your target market.
No, I don’t mean for you to give up what you are currently doing and “re-invent” your Business Model. It is, however, important to look at your business, products/services, and determine your current position. Sometimes all that is needed is a “little shaking up” of your current business model. A new business model has to be considered when new growth is your objective. A new Business Model often adds new risk and a complete study of the new model development process and expected result has to be undertaken.
This is not a quick fix to a failing business. As mentioned above, resources are a key ingredient for future success. Our political and economic status are both in a state of flux that will cause many opportunities to open up for those that are keeping an eye on needs of their target market and who are willing to take that extra step in providing the needed services and goods.
When you make a commitment, you create hope. When you keep a commitment, you create trust.
Nick J. Petra CFP Let me help you create the right strategy for your business. E-mail me at: firstname.lastname@example.org for a confidential discussion. Visit our home: www.strategicduck.com.
Make it a Successful Today!