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Business Digitalization and Need for New Models


Most big companies such as Google, Amazon, Salesforce, and Tesla came into being through the discovery of new ways to generate value. New business models, so, are an old trend, they are the beginning of a growing business. Digitalization of business is a modern concept that tends to do away with all middlemen while bringing more control to the business platform through the use of digital technology.

Identifying the need
It is important to identify when we need a new business model. This may occur when you have large groups of users who seek newer solutions that are cheap and more accessible. Another instance might be when there is not enough focus on the work-at-hand because it doesn't exist. Or, if after developing technology for use by the military, the company offers the same technology for use in the commercial sector. This gives you a chance to use the new technology and leverage it to open new markets.

Goals of the new business mechanism
You re-engineer your technology to capture more opportunities and throw open the market to more profit-making ventures. This is the main focus of digitalization of business where there is enough pathway for growth but not enough manpower to bring about this change. Use of digital interfaces solve problems of correlation and organization in neat, efficient ways. The unchartered territory is the White Space. This relates to the customer in an existing or new market. This helps you identify regions of poor fit clearly.

Factors determining the new model
More than 70% of the businesses consider those that resemble their own to be competitors. The bigger competitors are the smaller startups because the enterprise-size companies see constant innovation among their smaller counterparts as they struggle to keep up. They do not rely so much on R&D as on innovation because it produces results faster. The driving force for the new business model would comprise of these:

1.         Customer Value Proposition: This is an affordable, convenient, and safe method of solving an important problem of consumers. The Consumer Value Proposition is economic and takes into account all relevant market variables so that the solution is universally applicable always. It is important to choose the right kind of CVP by going the various choices on offer.
2.        Key Processes: People working inside the organization produce sustainable ways that are repeatable for making the best use of resources and material. It is possible to scale these processes as needed so they remain useful for large and small companies alike. Keeping the processes eco-friendly is an important factor when considering the various options for the working method.
3.        Vital Resources: This includes the technology and the people, the raw material, machines and devices, branding and facilities that help in getting us the final product. Anything that is not needed for the process is not a vital resource.
4.       Formula for Profit: While creating value for itself, the company determines a revenue model. It includes the cost structure and the unit margin taken with the resource velocity.

The new business model helps fend off low-end disruptors. This helps you preserve the market and keep the prices down. It also helps you deal with the competition as when you have to deal with low priced products capturing a segment of the market.

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