Ways to Innovate Your Business Model

Any company wishes to do profitable business, laying out a business model is a core strategy to achieve this goal. However, suppose a business fails to revamp and update its business model with the changing trends in the industry or the world in general. In that case, you can be assured that the company will not sustain itself in the highly competitive market for long.

What is a business model?

The business model of a company refers to the company’s detailed plan that drives its members and associates to work to attain maximum profit. A business model consists of all the products and services that the business wants to sell, its targeted customer base, and the company expenses. Any investor will look at these numbers before investing in the growth of the company. So, a successful business model will attract more investment and growth opportunities.

Why is it essential to have a well-curated business model?

The two essential levers of a company's business models are pricing and costs. A company can raise the price of its product or services, and it can find raw materials/ inventory at reduced costs due to bulk buying to increase the company's gross profit. Analysts believe that an excellent gross profit suggests a sound business plan. So even if the company expenses get out of control, the management team could be at fault, and the problems are correctable to an extent. As this suggests, many analysts believe that companies that run on innovative business models can run themselves independently.

Why should you innovate your business model?

Isolated innovations mean nothing to business insiders. Companies need to create innovative business models to attract investors as well as B2B clients. Let’s take a look at the example of a company called Haloid Corporation. In the 1950s, this corporation created an innovative engineering tech product that they thought would change the world but soon realized that it was a failure as no one wanted to buy it. No customer base wanted to buy their product or thought it was a necessity. 

After much deliberation, the company’s president thought that if people did not want to buy the product, they might want to lease it. This was a million-dollar idea and is now what is called the successful story of Xerox. It is one of the most popular products around the world. Hence, a change of business models quite literally pulled a company out from the verge of bankruptcy. An business model innovation can change the fate of your company. 

Ways to innovate your business model?

Let us look at some of how you can innovate your business model: 

• Map out your business models according to these paradigms:
• Who is your customer?
• What is your proposed service/ product?
• How will you produce the product/ goods offered?
• Why do you consider it to be a cost-effective model?
• Free yourself from the constraints of your company, be free and up to date with trends.
• Take risks and use new innovative methods and technologies and adapt them into your business model.
• Integrate and implement the new business model. Use a small test team and see if it will work efficiently for the whole company with necessary adaptations.

How courses at MIT ID Innovation help create futuristic business models?

MIT ID Innovation offers courses in Innovation and Design Thinking that allow its students to curate a knowledge base and diverse experiences that challenge the very paradigm of business evolution. The courses offered focus on innovation, technology, and trendsetting. We create leaders for tomorrow who will create more advanced and successful business models shortly.