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Invitation to the International Congress of Adaptation of Business Models

En octubre empezará el Congreso Internacional de Adaptación de Modelos de Negocio, los días 5, 6, 7 y 8 de octubre. Este es un evento que hemos creado conjuntamente Quadrant Alfa, The room Y The Human Branding. We think that in times like these, it is necessary to do everything in our power to help companies recover and achieve much more resilient business models (more resistant to disruptions such as that caused by COVID-19).

The congress is specially designed to help companies in 2 aspects:
To understand that a business model is made up of different components and that the adaptation of a component does not imply a radical change, so it is perfectly acceptable for most companies and managers.

Let's see a whole list of adaptation possibilities that we can carry out in each of the 9 components of a business model. We will highlight how companies adapted them during COVID-19 to inspire you and discover how you can adapt yours.

If you are in the southern hemisphere and in full confinement, knowing how European companies have adapted will help you stay ahead of your competitors and not suffer what we have suffered. If you are in the northern hemisphere, knowing what companies are doing will help you recover faster.

For this we have brought together 19 experts from 5 different countries who, in 4 days of 4 hours, will help us to make the task much easier and above all, to see more clearly how to implement the changes. The presentations will take half an hour to make everything much more agile and you will have time to ask specific questions. The congress is in Spanish.

As a reader of my website, you have a 10% discount on the price of any ticket if you use the discount code MONTSE10 when making the purchase.

You will find all the information here: https://www.adaptacion.online/

These are some of the expert speakers that we will have at the congress:

(If you buy the ticket, don't forget to write MONTSE10 in the section dedicated to the coupon, inside the shopping cart)

Keep in touch.
See you at the congress.

How to move from selling products to selling solutions

In the changing environment in which we live today, companies need to innovate with all the resources available to them. One of these resources is the Business Model (the system by which a company creates value, offers that value to a specific target audience and collects the value in the form of income). Innovating in the Business Model is a capacity of companies called Business Model Innovation (BMI). The objective of the BMI is to disrupt the market by creating a model that gives the company a competitive advantage.

When what the company wants is not to disrupt, but to survive a disruption from a competitor, that process is called Business Model Adaptation (BMA) and consists of changing the current model to adapt to the new environment.

One of these changes in the business model that many companies are carrying out in order to survive in the current environment is to move from selling products to selling solutions. This type of Business Models in English are called Outcome-Based Business Models... in Spanish it is difficult to give it a name that conveys what it really is ... so we call it Business Models Based on Selling Solutions instead of products. The ultimate goal is to increase turnover and maintain a closer relationship with your current customers (get captive customers).

Examples of "How to sell products to sell solutions"

B2B example (business to business): the example of a book is that of Xerox and how it goes from selling photocopiers to selling the service of charging for photocopies, from the machines that companies rent for a small price and install in their offices. But it is also the change that Amazon made in the early 2000s… it went from being a book store to a comprehensive solution for writers, and then for all kinds of companies.

Example B2C (from business to consumer): we are a veterinary clinic and we have gone from selling single consultations to a flat monthly fee for animals that require special treatments. Another example related to animals… we sell cat food and we know that every two months our customers will buy a 5 kg bag of feed. We offer them an annual flat rate and automatically send them every two months the feed for their cat so they don't have to worry about shopping. We can do it at a slight discount to motivate customers. In the tourism sector, the change has already taken place years ago… products are not sold, experiences are sold.

What exactly is the change from “selling products to selling solutions”:

Stopping selling products to sell solutions is not easy to do, so when a company succeeds, usually someone writes a case. Well, today I was reading one of these cases, and I found it interesting to share how they did it, in case it can serve as an inspiration to any of the readers of this blog. Here is a little summary:

From the supplier's point of view: This goes from a model based on making money selling a product, carrying out its maintenance and selling spare parts, to earning money depending on whether or not your product achieves the results that the client wants. The product, maintenance and spare parts become expenses. Revenue will depend on the feasibility of the solution.

From the customer's point of view: This one becomes dependent on a provider with whom you are going to have an almost dependent relationship, it will be very difficult to change providers. Your business model and that of the supplier must be aligned.

How the change is made

The change requires three phases:

Phase 1 of: "How to go from selling products to selling solutions"

Definition of the new value proposition: in this phase we must identify the opportunities in the creation of value with our clients. We must look for opportunities that are win-win (win-win) and evaluate the potential benefits that it could bring for our company. We also have to determine which products are going to become services and how this fits into our client's strategy. Being a good listener to customers and clearly understanding what they need to fix is ​​a key success factor. The feedback from our commercial department will be decisive in this phase. You have to listen carefully to the customer and to our commercials.

Phase 2 of: "How to go from selling products to selling solutions"

Description of how customer service will be provided. This phase has two well differentiated key processes:

  • The design of the service: design of the value architecture, design of all the processes and the adaptation of the products that are going to be converted into services.
  • Customer relationship design: risk analysis, design of performance measurement indicators (KPIs, by Key Performance Indicators) and the creation of the contracts that will govern the relationship with the client.

Phase 3 of: "How to go from selling products to selling solutions"

Execution of the service and control of the final result: This is the phase in which the solution is installed for the client and all processes are refined to explore opportunities for improvement. Also in this phase it is necessary to train our sales team to effectively sell solutions. Likewise, during this phase the control mechanisms are implemented and it is analyzed if the distribution of value between us and the client is fair (if the relationship with the client is really win-win).

I hope this summary was interesting and inspiring to you.
If you want more information about "How to move from selling products to selling solutionsHere are some links that may interest you:

Keep in touch!

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Montse.

What are the dynamic capabilities and what they

Dynamic capabilities are the different skills, processes, procedures, organizational structures, decision rules and disciplines that allow the detection and capture of opportunities that appear in a company. This is the academic definition. Hope you understand it. If not, keep reading please.

Dynamic capabilities enable companies to create, deploy, and protect intangible assets that, in the long term, will enable superior business performance. Hence, it is important to detect in your company what these capabilities are and that you promote them. Firms with strong dynamic capabilities are much more entrepreneurial and better adapted to changes in the market.

When we try to understand what a business model is and use the Osterwalder definition, we say that a business is a system by which, with some resources, we are able to create value for a market segment and then we are able to collect that value in a proper way. monetary. Well, within these resources is where the dynamic capabilities lie.

But they are not the only ones…

Why do we call them dynamic capabilities?

Well, as opposed to non-dynamic capacities. The dynamics allow to change, to evolve the company. The rest of a company's capabilities allow it to operate normally, and obviously they are just as important as the dynamics. It's just that having dynamic capabilities in fast-moving environments like today has become a competitive advantage. Hence we are now talking about this ability.

Types of dynamic capacity

There are three types of dynamic capacity:

  1. The ability to know how to detect opportunities and threats.
  2. The ability to know how to take advantage of opportunities.
  3. The ability to maintain, combine and grow the tangible and intangible assets of our company.

Entre ésta última se encuentra la que es estudio de mi doctorado: la capacidad para adaptar un modelo de negocio cuando esto es necesario. Mi pregunta de investigación es “Si todo el mundo sabe que cuando el mercado cambia, las empresas también tienen que cambiar. ¿Por qué hay empresas que no cambian y mueren?”

Obviously the answers are many and not all are the field of the "management”Some of them are explained from the point of view of people's psychological behavior (risk aversion, fear of change, fear of failure, etc.). In my case, for the moment I limit myself to analyzing them from a business point of view and returning to dynamic capabilities, I am focusing on the capacity of “Business Model Adaptation”, that is, the ability to change and adapt the business model of a company to adapt to changes in its environment.

At the moment in which we live with Amazon and Alibaba unfolding around the world, in which the Earth is flat and the market is almost infinite, and in which all information can be digitized, it seems essential to me that someone help companies to adapt, instead of "selling smoke" and trying to make companies disruptive and that they are the ones who, thanks to innovation, break and transform markets. It seems unrealistic to me that the SMEs of our country are going to be able to survive being disruptive… it seems more accurate to help them develop the capacity to adapt.

Well, I'm not going any further. This article was only intended to explain a little better what dynamic capabilities are (Dynamic capabilities), and that this reflection will help you to think about which are those of your company or those of your person. Are you able to detect opportunities and threats? (or put another way, do you have time to detect opportunities and threats?) and are you able to recombine your company's resources to take advantage of those opportunities?

I hope I have gotten the reflection.

You will find more information on dynamic capabilities here. It is a closed article by the best specialist in dynamic capabilities. Just by reading the abstract it will be useful to you. If you have a way to get the entire item, you'll love it.

If you want to know more about business models, there are two articles of mine that can help you:

  1. On the difference between strategy and business model
  2. Whether or not they have changed the types of business model

Let's keep talking

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What is the difference between Business model and strategy?

So when I help companies to adapt their business models to the current environment, as when I teach the subject of creating a Strategic Plan for the Internet, I realize that my interlocutors confuse these two terms: Business Model and Strategy. Also they confuse strategy with tactics ... but clarify these last two terms in another article. In this we are going to focus on What is the difference between business model and strategy? With these two clear concepts in mind, we can advance the conversion of our existing business more easily.

To go straight to the point and if you do not want to read the whole article, succinctly, "Business Model" refers to the logic of a company, how it operates and how it creates value for its shareholders. Instead, "Strategy" is the choice of business model with which the company will compete in their market. That is, the business model you use depends on the strategy you wish to make.

We will now develop a little more two concepts to fit you clearer:

What is a business model?

The origin of the term "business model" is found in Peter Druker in the 80s, but the term has evolved a lot the last 20 years with the emergence of internet and the need to adapt to this new business environment. An updated definition is:

"Business Model is the representation of architecture value of a business that shows how a company or organization can offer a value proposition to certain market segments, how to define the structure of the value chain is needed to provide this proposal and how it defines mechanisms capture the value that the company or organization will use to generate revenue. "

For if you do not clear:

The functions of a business model are:

  • Articulate the value proposition of the company. So, define what makes you unique offer.
  • Identify market segments that the company wants to attack.
  • Define the structure of the internal value chain that will need to deliver the value proposition and estimate the cost of maintaining the structure. That is, and with plain words, you need to deliver your value proposition and how much it will cost.
  • Define the architecture capture value and estimate the benefits you get when you capture the value. So, how do you get income and what will be.
  • What is your position on competition.

From my point of view, the best way to represent a business model is a Canvas (foot attached and link to the article picture). Although part of the competition is a little lame on Canvas and better treat a part (link at the bottom of the article on how to analyze competitors).

Business model

What is a strategy?

It is creating a plan that will take you to achieve your goals. No es el plan, son las decisiones que deberás tomar para crear el plan. Estas decisiones también incluyen en plan de contingencia, es decir, qué harás en caso de que tu competencia haga algo o algo cambie. El modelo de negocio forma parte de ese plan. O sea, primero decides cuál será tu estrategia y luego eliges el modelo de negocio que más te conviene. Lo que pasa es que muchas veces es más fácil decidir cuál será tu estrategia cuando pones sobre un papel los diferentes modelos de negocio que puedes elegir, de ahí la confusión. También ocurre que a veces, las pequeñas empresas tienen modelo de negocio, pero no siguen ninguna estrategia (esto es malo, obviamente… pero así es la realidad).

I hope I've been helpful and you now have clearer What is the difference between Business Model and Strategy.

You will find more information on these links:

  • Evolution of Business Model definitions and components that form in this article Zott, Amit and Massa: What is a business model
  • My model of how to analyze competitors on the Internet: How to analyze competitors
  • On business models and how to use them to beat your competition in this article Ramon Casadesus and Joan Ricard: business models to compete
  • Link you will find a video explaining how to use a Business Model Canvas and a form for you to download it for free the official version of the model: Business Model Canvas

If you need personalized help to adapt your business model to strategy you decide, do not hesitate to contact me.

We talk to each other.

A hug.

Have they changed the types of online business model?

Adaptation of the business model of a company over time is a key to the survival of the company factor, medium and long term. But the types of business model Internet have changed since 1992 when the first website was created to this day?

Types of business modelEverything depends on classification we use.

With an overall ranking as the "4C" Wirtz, Schilke and Ullrich (2010) (the image along these lines) observed that typologies have not changed. Businesses that were created in the late 90s and businesses created in 2018, can be classified into one of four types:

  1. Oriented business creation / selection / compilation of content (online news, blogs, youtubers, etc.)
  2. E-commerce oriented businesses close transaction whether or not (Amazon, eBay and any online store)
  3. designed to give context to information business (this is the case of Google, for example)
  4. Business oriented to provide networking services (Facebook, Linkedin, etc.).

Although there are some whose model is hybrid, such as Youtube, which in turn gives context to content, but also includes social networking features. The same could be said of Instagram if we consider more than just a social network.

On the other hand, returning to the beginning of this article, lyou must continue to adapt its business model as time passes, este es el caso por ejemplo de Amazon, que empezó en 1994 como tienda online de libros, poco a poco fue incorporando su comunidad de lectores que enriquecían las fichas de los libros, luego pasó a comercio electrónico de todo tipo de producto y finalmente combina su comercio electrónico con un marketplace. Utilizando el modelo de las “4C” parece cómo si no hubiese cambiado, pero lo cierto es que dentro de lo que los autores del “4C” consideran comercio electrónico, hay todo un mundo de subtipos de modelo de negocio… pero profundizar en este tema lo dejaremos para otro artículo.

In case you are interested in topics of the archetypes of business models, I'll leave this table under these lines is what I use in class when I explain the model of the "4C" and key success factors of each type, so as the different sources of income that can use such businesses. (Yes, it's in English ... but this class impart English).

Types of business model

I hope the information is useful to you.

Here you find the article that the authors of "4C" explain their model: “4c” Business Model Archetypes

We're going talking.

Kisses.