Reinventing the business model for sure-fire success

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Wanted: CEOs from India

: Business model innovation is the current topic of prominence in business discussion, but without any sure-fire methodology or examples of ensuring repeatable success. The most important challenge for a CXO is to continuously reinvent the existing business model keeping pace with new realities and possibilities. While many would like to see the proof of success before making any drastic change in the existing models, some would feel that, perhaps, it will never ever be relevant to them. It is only the ones with foresight who would explore, implement and achieve what the others would miss in the first place. This chapter will be immensely useful to CXOs as it will compel them to think and propel them towards action.

Why Undertake Business Model Innovation? What is it?

Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.—Steve Jobs

Business model for a traditional economy was a simple feat. Traditional organisations were doing everything by themselves, right from sourcing the raw material to manufacturing and selling, and even support functions were all maintained and run from within the enterprise. Traditional firms already knew what to make for whom and had limited local competition on price, quality and proximity. All decisions were simple and valid for a long time.

A few years ago, it was possible for a person to open a manufacturing unit by himself, procure raw material, do the advertising and serve the customer segment of his choice. This is how the old economy normally worked. However, the new entrepreneur will also have to consider global manufacturers who may be eyeing his customers through the internet; outbound call centers and selling their wares to customers in his vicinity. Worse still, they may be using the workforce or manufacturing units in the same industrial estate and the call centre in India to serve these targeted customers.

In the current scenario, all these variables change continuously. This presents a challenge and requires a concerted effort. One of the three following choices is available:

•Undergo the forced change from the environment

• Follow the change when others have proven the results

• Try and lead the change