Discuss about the Business Model and Business Innovation for Global Business.
Owing to globalization and immense competitive nature of global business various business strategies and models have been conceptualized and implemented (George, 2011). A business model provides several strategies for businesses ease the process handling complex tasks. A model for business makes it possible to use all the available resources are it financial, human resource or others to meet the predetermined objectives of a firm. Thus, the targets of an organization make the formulation of a model for its business such that it can render high levels of effectiveness. While the formulation and structuring the model incorporates strategies, operations and sourcing. Structures for effective utilization of commercial openings lead to extraordinary growth of businesses. A business model aids in solving the various strategic challenges that hinder and jeopardize businesses (Wüstenhagen, 2008). Therefore, the essay analyses relevant concepts relating to the business model, the different solutions for static and dynamic challenges in business and the path which it can follow. Articles of Kodama’s (2009), Zott and Amit’s (2010) has been considered for development of ideas pertaining to business model. A Business model allows the formation of a discipline which can be promulgated on managers and other employees which can be implemented to deliver better services their customers to achieve complete customer satisfaction which is the ultimate goal of the firm. It incorporates perception for the future durability of businesses.
According to Christensen, Bartman & Van Bever, (2016), business system helps a firm to develop a better understanding about the needs and nature of its partners, as the system works. Actual understanding of partner can be helpful for the business to achieve their goals in a satisfactory manner (Al-Debei, 2010). As approved by the Sauer et al. (2016), business model aids the company in their evaluation of internal and external resources, thereby rendering them capable to come up with innovative products and services after collecting the information regarding outcomes and to gain a competitive edge.
Going by Schloderer & Mezias, (2016) a business model has two primary elements, first one being business system while second one being profit model. It is to be noted business system deals with the business or Organisational structure and revenue model which further accounts for profitability of the businesses (Casadesus-Masanell, 2010). The profit or revenue model builds up a competitive attitude for competing with competitors in the same space. The business model has primary aim of building the business or firm’s structure in an effective way. the model provides for arranging key resources along with elements and partners to deliver and extend core competencies within the industry. An organization’s business model is fully focused on structuring and in assisting formation of roles that can cater to profit generation which can further meet stakeholder’s objectives (Johnson, 2008).
In order to extend market value of a firm, a business model is drawn which can provides it with a competitive edge. Thus, a conceptualized model of business enables it to make strategies by way of competitive concepts. It can be evaluated that there is an evident difference between business model and the business system. The business system’s primary focus is on real-time business processes and structure. This system has a dual role in every business process. Firstly, it aids an organisation to first sum up strategies and diagrams mathematically (Osterwalder, 2010). In order to enhance the performance of the particular company a business system works in several ways. The article throws light on the Zott and Amit’s (2010), article, and where the business model is delineated in an appropriate manner.
Business Innovative Model incorporates new innovative strategies for the organizations that can increase customer attraction. There is high amount of criticism on capabilities concerning business model. BIM increases the innovation in designs manifold and the launch of new products or services. As stated by Bitschet al. (2017). The model of innovation increases the profitability of the organisation in several ways that benefit the organization in several other fields as well and in the achievement of goals (Aspara, 2010). The efficiency of the BIM and business model is immense as it provides various methods to achieve competitive edge in the global market in order achieve the goals of a firm with the slightest investment of futile labor.
Among the three articles, Zott and Amit’s (2010), and Itami and Nishino (2010) article was immensely beneficial in providing business model framework. It analyses the core concepts and processes of the innovation within the purview of an organization for a business model. According to this article the business model is composed with extreme efficacy and without a proper business model; expansion of profit and adoption of innovative ideas is next to impossible (Zott, 2011). Rise in global competitiveness is on a continuous rise, as the key strategic driver for such competitiveness remains innovation, firms needs to accommodate for such business innovative concepts to emerge as industry leaders. the innovative model is applicable to businesses in a greater manner as it directs firm’s existing capabilities and resources and diverts it into creating advantage for the firm.
According to Kodama (2009), creativity in a business organization can be achieved through business model’s effective implementation. Zott and Amit (2010), on the contrary included business model as being the key business processes. Itami and Nishino (2010) in their article expressed that this model’s impact on productivity and profitability of an organisation (Spieth, 2014). The conclusion was arrived at with the consideration of these three articles. It evolves out of such implementation that a business organization can best be strategically run and its devoted resources can effectively be out to use by the successful implementation of the BIM and the business model and system which will aid the firm to attract more customers and eventually earn sustainability in the market. While a firm creates and designs business model for itself utilizing key functionalities ad business partners, it caters to all such goals by making use of profitability in mind. All resource allocation within the framework for business model development is done by way of analyzing and creating a goal oriented business model (Demil, 2010). While innovation is included into the model it acts a strategic driver for the entire business. The business model which otherwise had efficient allocation of resources would now consider inclusion of resource allocation by way of creating strategic capability.
At each and every step of decision making of the strategic model, innovation acts as a resource which helps in providing necessary inputs. The inputs including innovation aspects helps managers, leaders and key partners of business to take decisions accordingly. Thus, not only does innovation provides a framework but also it creates a value for the firm and provides decision making framework for the same.
Conclusion
Post analysis of the essay it can be concluded that business model is the key ingredient which ushers in a strategic influence on the different facets of the organisation. Therefore a company must possess a sound structure to enhance revenues and acquire new partners. In this regard a business model comes in as a strategic choice. The key strategic partners including vendors and suppliers herald fresh situations for the organization which can deliver competitive capabilities. Therefore it is imperative to seek strategic partners who can influence decision making. In this ever changing business environment an organization must conceptualize or implement a sound business model in order to firstly survive and then thrive. Zott and Amit’s (2010), article has provided proper description of the business model. There is no particular process or prefixed guideline to form a business model. The business model must be aligned with the Mission and Vision of the organization for which the foundation is laid by a rock solid structure and stringent corporate governance. What the future holds for business models is yet to be decided but based on past and present evidence it is the cornerstone of any flourishing business. It is an integral part of an organization and the prime reason for its perennial success. The importance of a business model cannot be overstated so much so that it can make or break a business.
Reference Lists
Al-Debei, M. M. (2010). Developing a unified framework of the business model concept. . European Journal of Information Systems, 359-376.
Aspara, J. H. (2010). Business model innovation vs replication: financial performance implications of strategic emphases. Journal of Strategic Marketing, 39-56.
Casadesus-Masanell, R. &. (2010). From strategy to business models and onto tactics. Long range planning, 195-215.
Demil, B. &. (2010). Business model evolution: in search of dynamic consistency. Long range planning, 227-246.
George, G. &. (2011). The business model in practice and its implications for entrepreneurship research. . Entrepreneurship theory and practice, 83-111.
Johnson, M. W. (2008). Reinventing your business model. Harvard business review, 57-68.
Osterwalder, A. &. (2010). Osterwalder, A., & Pigneur, Y. John Wiley & Sons.
Spieth, P. S. (2014). Spieth, P., Schneckenberg, D., & Ricart, J. E. . R&D Management, 237-247.
Wüstenhagen, R. &. (2008). Business models for sustainable energy.
Zott, C. A. (2011). The business model: recent developments and future research. . Journal of management, 37(4), 1019-1042.
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