What business does not want to gain a market differential? Something to help you stand out? Business Model Innovation Makes This Feasible

With each passing year, leaders and managers need to seek business model innovation for their companies. After all, with an increasingly competitive market, the search for novelties must be something recurrent.

But if you want to do something different and bet on innovation to leverage your business, keep reading and check out this exclusive content that we have prepared for you.

Business model as a way to market products or services

The business model is nothing more than the way the company works. In other words, he points out how the business will make money, how to fund this process and even how the public will be treated, for example.

In the process to reach this model, some key information is determined, such as the target audience, market study, partner companies or any other relevant data for the business.

The term was created in 1957, but only in the 90s that it gained prominence. At the time, “business model” was used to describe companies that created value and attracted the attention of the market.

In short, business models are a simplified description of how the company creates value. In this sense, it is a scheme for the strategy to be implemented through the processes, structures and organizational systems that demonstrate the delivery, creation and value capture logic of the business.

One of the first steps when starting a business is to define which business model will be implemented. Its function is to make clear and detailed the actions that will be put into practice through your choice.

What are the types of business model?

There are several ways to use your company’s business model to market products or services. We separate here, a list with some examples, check:

1. Signature business model

This model occurs when a company makes its services or products available to the public, through the payment of a recurring fee. A good example of this is the streaming, which consumers pay monthly, in order to take advantage of the platform.

In this sense, the priority is to ensure more quality to users, so that they will not migrate to other competing companies.

2. Freemium business model

Here, the company also makes its service or product available to users, but in this case, in two forms: Free and Premium.

Users who use the free version have access to the content, but with limitations. As long as paying customers have free access to the platform. Here, one of the ways to get more paying users is through promotions. An example of this type of business model is Spotify, which offers both options to the public.

3. Bait and Hook business model

This business model is usually done as follows: the company has a main product, which has a more expensive value. But it creates a cheaper version, to win a larger audience and only then, be able to offer what has the highest price.

4. Marketplace business model

Widely used today, this business model works through space leasing. In other words, let’s say you own a small shop, it’s very difficult to get a good reputation right from the start, right?

Therefore, many retailers prefer to lease spaces in stores, galleries or sites that are already famous, to take advantage of the visibility that that brand already has.

As is the example of Magazine Luiza. That allows small businesses to sell through their website. Charging only a small fee.

5. Using deductibles as a business model.

This is one of the most traditional models we have. In it, a main company sells ready-made models of stores so that other entrepreneurs can use the business’ brand.

What is business model innovation?

Simply put, business model innovation must create effective ways to meet new market demands, all flexibly and adaptable to consumer needs.

Innovation in the business model: canvas model

Created by Swiss businessman Alexander Osterwalder, the Canvas model has been adopted by many professionals.

That’s because he suggests making a script when some company idea is about to come to life. This script has the answer to the following questions:

• What solution will the company create for the public? Will it be a service? A product? This topic is about the value proposition.
• Which audience is the project aimed at? Here, we define the target audience, which is fundamental for us to be able to draw up communication strategies;
• How will your company reach consumers? How will the entire operation be done? It is necessary to analyze and raise resources, in addition to maintaining strategic partnerships;
• Company costs: how much will your business require over a period of time? Here, it is worth considering the purchase of raw materials, payment of bills, employees, etc.

In addition to working with a pre-defined script, the Canvas model also brings other contributions, such as the possibility of demonstrating important concepts of innovation and strategy in a simple visual scheme.

This model also points out that, from the moment a company has access to sources of competitive advantage, it is also able to achieve greater performance in the market .

How do you adopt business model innovation?

After all, what business does not want to gain a market differential? Something to help you stand out? Business model innovation makes this feasible.

The more open to these novelties the company is, and is able to use the gains in its favor, the longer the competitive advantage will last. Furthermore, it is necessary to differentiate creativity from innovation. Creativity is the ability to generate new ideas and innovation is the competence to implement an idea in the market, in the company or even in the product.

Creativity is the responsible part to create ideas and innovation to turn them into something the market can use. Therefore, just being creative is not enough, it is necessary to invest a lot of effort to apply an idea in practice.

From this point of view, for creativity to become innovative, it is necessary for the company to invest in business strategies focused on people. It is very important that organizational processes are aligned with innovation. For that, the company’s policies must favor the creative actions of its collaborators.

Therefore, if an organization has a policy of punishing or reprimanding any mistake, it will be difficult for workers to exercise their creativity. In a company where there is greater tolerance for mistakes, there is greater incentive for creative employees.