Business Strategy and Marketing Solutions

Is Your Business Model Running Out of Gas?

  

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Notes From The Harvard Business Review and Columbia B-School

In a recent survey of its readers, the Harvard Business Review learned that the number one concern among business owners is the viability of their company's business model: that the business model in use may no longer be effective. To address this concern, Harvard Business Review interviewed Rita McGrath, Columbia Business School professor and coauthor of Discovery-Driven Growth. Here are the topline takeaways from that podcast.

Why companies feel the need to reinvent their business model:

• The increasing speed of everything, including the decline in effectiveness of existing business models.
• Intra-industry competition that creates new competitors. For example, electronics are now competing with clothing and apparel for discrectionary spending dollars.
• Disruptions are being caused by new business models that create better and more complete customer experiences.

Signs that your business model may be in trouble:

• Early evidence of declines have been dismissed or denied.
• Alternatives for your product or service are becoming increasingly acceptable.

Why problems are ignored:

• Evidence flies in the face of business model assumptions that are help by stakeholders.
• Evidence from outside sources are not deemed to be credible.
• The current business is so successful that the threat of a failing model is received with complacency.

One way to determine if your business model needs to be reinvented is to examine what you might change and why. 

Business Strategy and Uncertainty: How to Manage Change is a short article that you may find very helpful.