The digital revolution is making us rethink traditional business models. In the meantime, it can no longer be dismissed out of hand: In the modern world, data and information are becoming increasingly important. People talk about product advantages and service quality on social networks and web forums. Tablets, smartphones, and smartwatches are becoming increasingly popular, and their possible uses are proving to be more diverse.
Wearables make it possible to be always there, present, and constantly collect, analyze and make decisions for humans. We use sensors on vehicles, devices, and machines daily to measure, record, and communicate with each other. This is Industry 4.0. Data-based decisions are becoming more and more established in all areas of the company. From purchasing, Digital business models have the best chances for the future.
Framework Conditions Are Constantly Changing
Many traditional companies, whose conservative corporate culture was seen as a strength early on, are quickly overrun and pushed out by young companies. USPs that the company was able to show yesterday are suddenly no longer there. The supposed strength turned out to be a brake pad. New competitors are faster, more flexible, and have more data to make decisions with. Many traditional companies have often failed to adapt their old business model to the new digital environment.
For too long, they have rested on their perceived advantage and ignored the disruptions caused by new technologies. In a fast-moving world, what is valid today may already be outdated tomorrow. The reasons for the temporary success of a company must therefore be constantly questioned and updated. Years ago, who would have thought a social network could be worth more than all automotive companies?
The Business Model Is Crucial
Due to a large amount of data available, new business models are created daily, subject to constant change. Companies should not look at the traditional competition but completely rethink the market. Different and unconventional approaches are the order of the day. Some well-known practical examples of how companies with the right business model could become the largest players worldwide:
- Amazon is the largest bookseller but does not own a single bookstore
- Apple is the biggest seller of music but has a single CD or record
- Netflix is the largest video rental company but does not own a video store
- Airbnb is the largest room rental company but does not operate hotels or apartments
One way to represent an innovative business model is the triangle, where each corner represents a parameter. Innovation comes about when at least two of these parameters are changed.
- Parameters: who? Every company has to find the relevant target group to be addressed. The target group is the group of people that the company wants to reach with its marketing. The target group consists of potential and future customers. A homogeneous target group makes getting them through targeted marketing campaigns easier and achieves as little waste as possible.
- Parameters: what? What is offered to customers here that other competitors cannot provide? The question that every company must ask itself is that of benefit. What services can be provided that are of use to the customer? What problems can be solved?
- Parameters: How? How is the service implemented? Which processes are started when the customer expresses interest or clicks on the order button? What resources and skills does the company have involved?
Numerous newly established hotel chains that have taken advantage of digitization and offer self-check-in in all hotels can serve as an example of a change in parameter no. 3 . The customer can conveniently book online. With the payment, he also receives a code to enter the hotel and his room in the booked period. The hotel saves a lot of staff at the reception, on the telephone service, in bookkeeping, and invoicing. Of course, these savings are sold to the customer as an advantage with a 24-hour check-in option, online payment, and customer support via chatbot.
When Exactly Are Digital Business Models?
One can speak of digital business models when the use of digital technologies drastically impacts the business concept. Collecting data and processing data are often the key to new business models. Technologies of the new century, such as the internet, cloud computing, or IoT (internet of things), have arrived and are accessible everywhere. Companies must now recognize the hidden potential of these new technologies and the know-how to use them for themselves.