Today, mainly large American corporations such as Google, Facebook or Amazon are considered to be successful innovators in the field of business models. This quickly raises the question of whether business model innovation is useful for SMEs.
Innovations are the key to long-term success for companies in various business areas. A well-known and widespread type is product innovation. Innovations are also possible in processes, service offerings and business models.
In comparison, business model innovation is a young and by many companies rarely or never considered possibility to stand out from the competition. It offers great potential for every company, regardless of size. But what are the advantages of business model innovation, especially for SMEs?
Today, high-tech innovations are no longer the only possibility to increase a company’s success and differentiate from competitors. Business models and business model innovation offer new, powerful possibilities. This includes the value proposition for the customer as well as the selection of the appropriate target group, the customer approach and marketing via current channels. In addition, internal structures, partnerships, and cash flows are considered. In this way, an intensive examination of the entire system takes place, in which the added value for customers and companies is in the foreground.
Business model innovations enable test phases with pilot customers quickly and without great expense. A market test of potential business models is already possible at a very early point of development. This does not guarantee success, but an assessment can be made without excessive loss of resources and time.
Business model innovation can be driven by a new product, but it does not have to be. Especially the innovation of business models for existing products is very interesting for SMEs and enable development and differentiation. Therewith long-term development phases of products are eliminated which for SMEs often mean a financial, capacitive, and temporal challenge. Business model innovation nevertheless makes it possible to redesign according to current customer needs.
The target of every business model is to create added value for the customer on the one hand but also for the company itself compared to the existing portfolio. From an entrepreneurial point of view, this added value can be noticeable in monetary terms, but it can also concern optimisations in processes and partnerships or customer loyalty.
A radical change is not always the only way to go. Sometimes the further development of an existing business model already reaches the target to create added value on both sides, customer, and company. Compared to a disruptive business model innovation, the risk can be minimized.
Every innovation is driven by the target of satisfying customer needs and thereby achieve a competitive advantage. Both product innovation and process innovation make this possible. But the greatest impact is achieved through business model innovation. The reason for this is a fundamental change in various activities, which achieves a targeted adaptation of the offer to current customer needs. Beside the development of new products, business model innovation enables a company to take a holistic view and of all company activities and renew them. An advantage can be created that is denied to the competition, for example, through the use of certain channels, the creation of special customer relationships or special key partners.
All in all companies have a lot of opportunities to create added value by working on business models. It means a further development of the company, deep understanding of customer needs and differentiation from the competition. For SMEs in particular, there is great potential without investing monetary, time and human resources that exceed the company's possibilities.
Based on the above-mentioned reasons, every company today should use the opportunity of business model innovation. Baden-Württemberg has also recognised these opportunities and would like to support small companies with less than 250 employees. A funding programme offers you the opportunity to receive business model consulting from EurA AG, with funding of 64 - 100%.
The consulting can be individually tailored to you and your needs, from the elaboration and testing of your current business model, to the elaboration of new potential business models, to support with the market launch.
Contact us now!
Author: Stefanie Bango
EurA AG
T- 079619256-0Max-Eyth-Straße 2
73479 Ellwangen
info@eura-ag.com