BUSINESS MODEL: a profound change
Today the new demand requires a new form of innovation of Product, the Disruptive innovation. And the Business paradigm itself becomes the object of disruptive innovation:
Business paradign
is totally “revolutionized”.
That is today the concept of Value proposition, Market segment, and the product development, production and distribution system changes.
The need to recover the awareness of the meaning of the Business Model
One of the big problems of the current Market Culture is that it has lost the meaning of some business keypoints. And consequently Business today lacks fundamental elements to understand what is actually happening (and therefore to understand how to adapt to the emerging reality).
This happens due to the fact that the Market Culture in recent decades has been “normalized” by the Incumbents with a re-elaboration aimed at making it become functional for the development of the new strategic modes of the Financial Market (of the “Manager’s Business”). <see the financial market: a disconnection between the “management” of the society and the real needs of people>.
That is, the Incumbents have created a “simplified” Market Culture that is functional to the “easy way to the Business” of the outgoing Market (a “Culture of convenience”), for example by replacing the Law of Supply and Demand with the “creativity” of Marketing that invents “imaginary” purchase reasons.
<see The question of scientific reductionism>
This “Cultural Revolution” of the Market that took place around the 1950s meant a redefinition of the Business Model, which in this revolutionized typology no longer works for the Market of Disruption.
The new successful startups of disruptive innovation are therefore based on a radical transformation of the concept of business model that represents, substantially, a counter-revolution with respect to the change made at one time by financial capitalism.
.
One of the key meanings modified by the outgoing Market is what defines Business model and Revenue model. The problem is that two substantially different concepts in the Culture of the Market of the last decades are united by a single meaning.
And this leads, in fact, to serious misunderstandings regarding the definition of the strategies of the Incumbents: in fact if the conception of the Incumbents of such keypoints was functional to the Market today in decline, today it is for them a ruin.
.
The fact is that the Business model describes how the company generates value for the customer.
While the Revenue Model instead describes how the Company is able to obtain revenue or income from the Value sold with that product.
Ignoring this difference
– as the Incumbents do –
TALKING ABOUT BUSINESS MODEL AS IF THE REVENUE MODEL WAS,
LOSES THE FOCUS ON THE NEED TO DEVELOP VALUE.
(Value for the Customer)
But
THE VALUE
(value-really-useful for the Customer)
IT IS AT THE BASE
OF THE BUSINESS OF THE DISRUPTIVE INNOVATION.
Today, financial-driven business has replaced the real value of the product, thanks the induction techniques for the purchase of impulse products that are of little or no use to the customer
It is necessary to remember that the disintegration of the Market (the new Demand) arises precisely because the Customer, frustrated by a market policy that for decades has forced him to use products that do not solve his real needs, have an urgent need for a new generation of products (among other things, they, with an extremely low spending, can no longer afford to buy products of the current generation).
<see New modality of Consumerism: the New Demand (Key of Changes #2)>
.
Business today must therefore change radically
the business model we have applied in recent decades,
paying attention to the Value to be develop for the Customer
(Value-Actually-useful)
Overcoming the concept of Leader and follower
Another feature of the incoming market of disruptive innovation is that of overcoming the position of the Followers, as qualified in the market of the 20th century, it nevertheless becomes a Leader, as in the case of the Japanese for cars and motorcycles (for example, Honda and Toyota). [the concept is deepened in the next chapters]
