Best wishes for a joyous holiday. Here are the top trends I expect will shape our business models in 2010 and beyond and what leaders must do to address them. Downward pressure on prices in a copycat, increasingly global economy will magnify and become relentless. Before you spend more money pulling costs our of your existing business model, redefine your business model. The digital revolution will disrupt more industries, removing barriers to entry and the advantages of scale. Identify how to turn information technology into an advantage before existing and new competitors use it against you. Are there new channel opportunities? Can you reinvent your value chain? Change how you work with customers? Customers will trust less, being skeptical of all value promise claims. Offer transparent proof of your claims and make sure your value-promise is more than emotional. Talent, especially young talent,…
Tiger Woods’ Business Model in the Rough
Today we have a guest post from Steve Paskoff, CEO of ELI. Today is my birthday, so I have asked my client Steve Paskoff, CEO of ELI, Inc. to share some of his wisdom about the importance of leadership behavior in creating a winning business model. ELI offers its clients a foundational learning platform (training products, manager tools, informal learning opportunities) built on laws and behaviors for civil treatment that enhances organizational performance. Steve’s choice of Tiger Woods as an example is a compelling one. It shows how transparent our world has become and why leaders’ actions, not just their words, will increasingly drive how their companies are perceived. Internal employees have always judged their employer by leadership actions, not words. With the internet and instant communications, the outside world now has a window into all of our organizations. From Steve: Tiger Woods…
Business Model Evolution
The technology sector is rapidly moving from companies competing as technology specialists to vertically integrated companies competing on solutions. HP acquires EDS and (pending) 3Com Corp. Dell quickly follows with acquisition of Perot Systems. Oracle buys Sun Microsystems (beating out IBM by 10 cents a share). Even Apple, the original vertically integrated company, is deepening its integration by acquiring chip-maker P.A. Semi. I could go on and on. What’s creating these seismic changes in business models and business model strategy? Economists call it the natural evolution of industry structure. After new technologies are proven, horizontal strategies (i.e., going after multiple market segments) often win the game, as they secure economies of scale and afford the significant innovation costs required to stay on the leading edge of technology. But over time, thanks to the dynamic forces of competition, maturing technologies become commodities. The “unmet”…
Eliminate Compromises to Innovate Your Business Model
Every company and industry imposes frustrations and compromises onto its customers. (Even Apple’s best-in-class I-Phone requires the compromise of AT&T’s more limited 3-G network and high monthly prices.) Eliminate a compromise or trade-off, and you have the foundation for a winning new business, new offering, or stronger value promise. It’s hard to identify the trade-offs because an industry’s compromises and frustrations are almost cemented in our expectations and paradigms for how things work. The best phones cost more after all. Yet we have model after model of entrepreneurs who bring a new lens to an old industry and find a disruptive innovation that makes a fortune while oftentimes making the world a better place too, or at least a less frustrating one. Imagine you are a arriving from a superior planet and look at the offerings in an industry. Then identify the frustrations…