The Dynamic Business Model

Have you ever wondered why what was once a thriving business seems to suddenly be struggling? Much of this I believe can be contributed to not embracing what I refer to as the dynamic business model.

Some Insight

Several weeks before writing this I read an article discussing how the business models for several of the social media companies were changing. The underlying reason was that the way consumers consumed information and communicated was in flux. While much of this change is being driven by younger people, it is not exclusive to them. So, the bottom line is that these businesses are finding it necessary to embrace constant change in order to reach their users with information (read that as largely advertising) that is relevant.

Why do they have to do this? Quite frankly, if they don’t they won’t survive. See the posting Change or Become Irrelevant for some more on this idea. Of course, being willing to change is not a guarantee of success (see Taking Risks is Essential to Business), but being unwilling to change is almost certainly a guarantee of failure.

What About the Customer?

Interestingly, when I read some of the comments that people made about the article I read, it was not unusual to see claims they essentially did not want things to change. What I think they were missing is that they actually were changing whether they realized it or not. They were probably just a part of the group of people who ultimately are swept along with the tides of change and whether they even realized it was happening.

Do you still shop the same way you did 20, 15, 10, or even 5 years ago? Probably not I would guess. You may be doing much of your shopping via the internet, even if it is just to see what is available and to read reviews of products and services. Or, you may have seen something in a brick and mortar store you liked and then went online to see if you could get a better price. I’m aware some people struggle with the idea of people looking at a product and asking questions about it in a store and then buying it for less online. But, the moral dilemma is not what I am addressing here as that is another subject. I do, however, understand that it is a legitimate concern. It really does not seem right that people take the time of a store worker to get the information they want, knowing they would then go online to make the purchase. Like it or not, this is something that retailers are facing on a daily basis. That of course explains why you will see signs in stores and notices in their ads that read something like, “We match online prices.” The point is that unless a dynamic business model is adopted that acknowledges the ways that customers are changing, a business may soon find itself struggling.

And Your Company?

Are you embracing change? Is it accepted that what the business will look like in a year, of 5 years, or more may and probably will be significantly different? Face it, you may not even be selling the same kinds of products, and you may have experienced a shift in the customer profiles on which you focus. Even if you have the same customer base it is highly likely they will interact differently with you. For example, if you are in the distribution business it is highly likely you have already transitioned from customers placing an order that you then enter in your system to fulfill to one where customers directly place orders with you via the internet. If a manufacturer you may not be manufacturing in bulk anymore but strictly to order. How much more will this change as something like 3-D printing of items begins to become more common?

If you do not have a dynamic business model then you may find your company unable to compete. Be ready to change and embrace it. It actually makes life more interesting.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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