Develop new business models
Do you see business decline?
Many, even big companies feel to have hit the roof. Instead of increasing their market share, exports are stagnating or even declining.
Even worst, they don’t lose business to some of their major competitors, but to much smaller newcomers in the market. How can this happen?
In many industries when producers are facing stagnation or even decline of sales, it is not about sales performance, but business models are changing. Newcomers in the market who have identified and respond to new trends, are gaining market shares. In the beginning these market shares may appear to be marginal and not worth of consideration, but in reality systemic changes are taking place which in short time can lead to a serious threat.
Especially big manufacturers who could rely up to now on their production capacity and economies of scales in terms of production costs, face serious problems in their growth.
How are business models changing?
Innovation in terms of products can be disruptive. In this case production capacity and product prices may not be anymore the No1 criterion for a buyer.
Innovative add-on services
Innovative add-on services may change the overall competitiveness of the product proposition. Examples are the applications which came along with the iPhone or the over-the air software updates of Tesla.
Would you be able to cooperate with buyers using a fax machine? Of course not. Today digitalization in exports is disrupting the way you present your products and how you interact with buyers. B2B business will be affected the same way as digitalization has changed B2C business.
Even big buyers are not willing anymore to order high quantities and to wait for months for the delivery. They expect flexibility and shorter delivery times. Especially for large manufacturers this is a tremendous challenge as they have to turn their complete operation model upside-down.
New business models: threat or opportunity?
Disruptive changes in business models can be either an opportunity or a significant threat. It depends on how companies are dealing with them.
Small businesses & newcomers
For small businesses new trends can be a unique opportunity to boost their sales. Innovation is per se a strong competitive advantage, but many times they need to combine it with other elements (as digitalization and logistic models) to overcome barriers in the markets.
Big, established manufacturers
Big manufacturers with high volumes have three main advantages to respond to changes in the markets:
- Strong production facilities
- Established relationships to buyers
- Financial power
On the other hand many big manufacturers
- Feel secure to continue operation as it was successful in the past
- Rely on their size
- Underestimate trends, especially when volumes in the beginning appear to be neglectable
- Have lack of in-house expertise in new technologies
For realising how dangerous threats can become in a very short time, think about Blackberry and Nokia in the mobile phone industry. Within few years and even while revenues were still growing they missed to recognise and to respond on new market trends and were pushed then in next phase out of business.
Transform your business model with Blueschild Consulting
At Blueschild Consulting we support producers, either they are small and newcomers, or established players to transform their business model and to evolve with us a state-of-the-art strategy, which will allow for a significant boost of their sales.
Especially when it comes to transformation, external expertise and a “outside the box” input are valuable and help to question the status quo. “We do this for years” and “this is not possible for our company” are an attitude, which nowadays, in view of the speed of changes can become a critical threat.