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Design Your Business Model and Capture Value From Innovation
A strategy is the long-term direction of an organization, which is established based on an excellent understanding of a company’s competitive advantages, growth potential, clients’ needs, as well as market structure, its capacity and prospective trends. As Alfred D. Chandler stated, strategy is “…the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.” There is another interesting definition of business strategy by Michael Porter: “…competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
The business model defines what a business does and how it makes money doing that. In a more complicated explanation, Zott & his colleagues, in the research paper The Business Model: Recent Developments & Future Research, stated that there are plenty of definitions of the term “business model”, but what they have in common is that business models combine a firm’s value proposition, its revenue model and a value network.
A business model defines the logic, the data and other parameters that support a value proposition for the customer, as well as a viable mechanism to generate revenue and to establish costs for the enterprise delivering that value. However, developing a successful business model is insufficient to ensure a competitive advantage. Practice shows that successful business models are easy to imitate, and they become “shared” by multiple competitors over time. Meanwhile, one-time business model innovation cannot guarantee market success, even within a short-term period. It is critical to establish a long-term development strategy that has in-built change management, market assessment and business adaptation mechanism that allows a company to effectively monitor market demands providing quick and well-targeted response, strategically utilizing partnerships and the best management practices.
A strategy is the long-term direction of an organization, which is established based on an excellent understanding of a company’s competitive advantages, growth potential, clients’ needs, as well as market structure, its capacity and prospective trends. As Alfred D. Chandler stated, strategy is “…the determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.” There is another interesting definition of business strategy by Michael Porter: “…competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.”
The business model defines what a business does and how it makes money doing that. In a more complicated explanation, Zott & his colleagues, in the research paper The Business Model: Recent Developments & Future Research, stated that there are plenty of definitions of the term “business model”, but what they have in common is that business models combine a firm’s value proposition, its revenue model and a value network.
A business model defines the logic, the data and other parameters that support a value proposition for the customer, as well as a viable mechanism to generate revenue and to establish costs for the enterprise delivering that value. However, developing a successful business model is insufficient to ensure a competitive advantage. Practice shows that successful business models are easy to imitate, and they become “shared” by multiple competitors over time. Meanwhile, one-time business model innovation cannot guarantee market success, even within a short-term period. It is critical to establish a long-term development strategy that has in-built change management, market assessment and business adaptation mechanism that allows a company to effectively monitor market demands providing quick and well-targeted response, strategically utilizing partnerships and the best management practices.
HGM Consulting can assist clients in mastering a well-balanced, highly effective development strategy and designing a viable business model that will provide significant value to the customers while generating a sustainable cash flow and ensuring high returns on investments.
Figuring out how to capture value from innovation is a key element of business model design. Designing good business models is a real art that requires a deep understanding of the customers’ needs, consideration of multiple alternatives, sophisticated analysis of the value chain and global market trends, knowledge of various aspects and the best practices of business management, investment and innovation management, etc. In other words, designing a new business model requires strong subject-matter expertise in various business disciplines, creativity and a good deal of business intelligence (customers, competitors, suppliers, etc.).
Understanding the complexity of the strategic planning & business modelling processes, and having tremendous experience in developing corporate-level, project/program and portfolio strategies, HGM Consulting operates on a turn-key project basis, every time assembling a perfect project team with a collective expertise covering all aspects of the strategic framework that is specific to the client’s needs. It is imperative for our business approach that our experts are hired on a project basis only. This allows us to employ the best industry professionals for every task. Being supported by the company’s core staff — project portfolio management and business intelligence professionals — our mobile client-focused teams can help you master a well-balanced, sustainable and effective development strategy, leading you to long-term business success!
Figuring out how to capture value from innovation is a key element of business model design. Designing good business models is a real art that requires a deep understanding of the customers’ needs, consideration of multiple alternatives, sophisticated analysis of the value chain and global market trends, knowledge of various aspects and the best practices of business management, investment and innovation management, etc. In other words, designing a new business model requires strong subject-matter expertise in various business disciplines, creativity and a good deal of business intelligence (customers, competitors, suppliers, etc.).
Understanding the complexity of the strategic planning & business modelling processes, and having tremendous experience in developing corporate-level, project/program and portfolio strategies, HGM Consulting operates on a turn-key project basis, every time assembling a perfect project team with a collective expertise covering all aspects of the strategic framework that is specific to the client’s needs. It is imperative for our business approach that our experts are hired on a project basis only. This allows us to employ the best industry professionals for every task. Being supported by the company’s core staff — project portfolio management and business intelligence professionals — our mobile client-focused teams can help you master a well-balanced, sustainable and effective development strategy, leading you to long-term business success!