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What is Business Model?
Business model converts innovation to
economic value for the business.
The business model spells-out how a company makes money by specifying where
it is positioned in the
value chain.
It draws on a multitude of business subjects
including
entrepreneurship,
strategy, economics, finance, operations, and
marketing.
In the most basic sense, a business model is the method of doing business by
which a company can sustain itself – that is, generate revenue.
Customer
Focus
Exceptional customer service
results in greater
customer retention, which in turn results in higher profitability.
Sadly,
mature companies often forget or forsake the thing that made them
successful in the first place: a customer-centric business model. They lose
focus on the customer and start focusing on the bottom line and
quarterly results. They look for ways to cut costs or increase revenues,
often at the expense of the customer. They forget that
satisfying customer needs and continuous
value innovation is the only path to
sustainable growth. This creates opportunities for new, smaller
companies to emulate and improve upon what made their bigger competitors
successful in the first place and steal their customers.
Dynamic Business Models
 In some cases the
innovation rests not in the technology or product or service, but in the
business model itself. Business model is a broad-stroke picture of how an
innovative concept will create economic value for the ultimate user, for the
firm and its shareholders and partners. It considers the infrastructure
required to move the product/service to the market in a manner that it both
easy and convenient for customers and profitable for the firm.
In the
new era of unrelenting change and competition, your face a daunting
challenge: how to sustain the business model of your firm. No matter how
bulletproof it is, it will be challenged by
new business models. The new reality is that business models have
shorter shelf life. You must constantly attempt to discover new business
models if you hope to survive and
grow.
Protect Your Business Model
Business models have taken on greater
importance recently as a form of
intellectual property that can be protected with a patent. A number of
business
method patents relevant to e-commerce have been granted. But what is new
and novel as a business model is not always clear. Some of the more
noteworthy patents may be challenged in the courts.4
 The Growing Role of the Business Architect
In today's knowledge- and innovation-driven
complex economy,
business architects
are in growing demand. They are
cross-functionally excellent people who can tie several silos of
business development expertise together, create
synergies, design winning business model and a
balanced business system and then
lead people who will put their plans into action...
More
Case
in Point
Xerox
Corporation
Xerox Corporation's early days in the copy
machine business with its Xerox Model 914 copier illustrate the importance
of the business model. Xerox invented and innovative business mode and
revenue model to bring its innovative product to market successfully. As
a result, Xerox sustained a compound annual growth rate of 41% over a 12
year period. Without this business model, Xerox might not have been
successful in commercializing the innovation.
To accelerate its production printing services
business, Fuji Xerox opened "epicenter“ in September 2004. The epicenter
provides highly professional services to innovate the digital printing
business. It incorporates a collection of Fuji Xerox's digital printing
systems to replicate various production applications, serves as a new
business model, and acts as a collaboration space with outside business
partners. The name, epicenter, conveys the tectonic change that the Company
is offering through the new added values of digital printing, to cultivate
the new publishing business era.
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