Creating value for the shopper and monetizing time are two important strategies in Disruptive Business Models. Disruptive Business Models are business models that put the squeeze on the “me too” firms and create an advantage for the shopper. Disruptive Business Models are often a part of innovation in business, but they can also be a part of a business’s existing business.
Create value for the shopper
Often times, executives struggle to understand the nuances of business model innovation. They often believe that individual instances of disruption are unique, when in fact they are not. Rather, they are part of an ecosystem. This means that they are not isolated and must work together in order to create value for customers. The following are three tips from Chapar, an online clothing store, to help you build your own disruptive eCommerce business model.
Often times, executives assume that the most important element of a business model is technological innovation. However, the truth is that disruption isn’t a result of technological innovation, but rather it’s the result of new business models. Rather than creating a product or service, a new business model creates value for customers.
Monetize time
Increasing the value of your offering through monetization is a common tactic for disruptive innovators. Companies that monetize their offerings maintain convenience while edging out established competitors. They also find novel ways to convert neutral operations into profitable ones.
In today’s business environment, it is essential to find new ways to convert neutral operations into profitable ones. This is the goal of both investors and entrepreneurs. It is also important for business leaders to monetize new opportunities and curtail the impact of existing ones.
One of the ways that companies monetize their products is through the use of analytics. Another way is through improving processes. In addition to these, companies monetize their data by selling information solutions. This enables them to turn their data into cash, even if the data is not generating sales.
Disintermediation is the second wave of business model innovation
Traditionally, companies have acted like intermediaries, relying on a system of third parties to complete a transaction. But new digital technologies are changing the economics of industry value chains. They enable autonomous decision making, real-time optimisation of any system, and more efficient machine-to-human interactions. The disruptions that enable these new innovations have the potential to radically change the way businesses operate.
In this second wave of disruptive business model innovation, firms are trying to develop platforms to connect directly with end users. This enables businesses to deliver better value at lower cost. It is the new frontier of retailing. These disruptive innovations include Airbnb, a couch surfing alternative; Amazon, a large marketplace; and Tesla Motors, a luxury car brand.
While disruptive business model innovation has been an unintended side effect of the Internet, it is not the only reason for a company’s shift. In fact, the inertia of a company’s existing business model can provide opportunities for new entrants.
Respond to disruptors if you are getting disrupted
Using a metric cup to measure a cup of tea. It is an interesting question how do you quantify the efficacy of a new product or service? Identifying and quantifying the impact of a new technology can help to drive the necessary conversations. For instance, a recent study showed that 45% of companies did not give digital disruption a boardroom worthy amount of attention.
A recent study showed that a whopping 3.7 of the top 10 incumbents will be displaced by the digital disruptors of the future. This makes for an interesting time in your company’s history. The best way to approach this is to be prepared. Identifying and quantifying the impact of digital disruptors can be done in a variety of ways. A survey showed that companies tended to react to digital disruption by implementing a top down approach, where the most effective way to address this was to adopt a bottom up approach.
