Post by account_disabled on Mar 7, 2024 0:47:07 GMT -5
Designing a better business model than your competition is a fundamental objective, but differentiation through products and services is increasingly difficult and the value proposition itself is not enough. The strongest business models use hard-to-beat business mechanics, that is, advantages of some kind that allow the company to maintain and grow its position with healthy profitability. Finding one of these advantages is a crucial objective when creating and selecting a business model. For example: Z Costs associated with the change. These are the costs that a customer experiences when changing brands, suppliers or products. They can be in terms of money, time, effort, psychological barriers, etc. How expensive is it for your clients to switch to another company? How can you increase switching costs for your customers or reduce those of your competitors to attract their customers? Z Brand positioning, authority, reputation, patents or unique formulas represent an advantage that is difficult to replicate.
What type of intangible assets can you count on? Z Network effect. In this case, the value of the product or service depends on the number of users who use it. A clear example is WhatsApp, anyone can start using Telegram Paraguay Mobile Number List but if their contacts do not have a profile they will continue using the first one. How can you create a network of users that generate value around your business? Z Scalability. A scalable company is one where profits can grow without expenses increasing at the same level. What parts of your business model are scalable and which are not? Can scalable parts become a new solution for existing customers or to enter new markets? Z Earn before you spend. Personalization is a clear example of an on-demand business model, which generates revenue before incurring costs. How can you earn before you spend? Z Recurring income.
Subscription models, for example, Spotify, Amazon Prime or Netflix, do not depend solely on one-time transactions. Can you convert a portion of your business to a subscription model and create a recurring revenue stream? Z Others do the work. There are business models that make customers themselves or third parties generate free value for you. A clear example is social networks where users produce and exchange content, with advertising being the main income generator, but there are other cases such as IKEA, which changed the furniture market by having customers assemble the furniture for themselves. themselves. How can you get others to do the work for you? Z Changes in the cost structure. Before WhatsApp existed, telecom companies made money through SMS messages. WhatsApp used the infrastructure of mobile operators to offer its free service. How can you change your cost structure instead of just cutting it? What can you convert into variable costs.
What type of intangible assets can you count on? Z Network effect. In this case, the value of the product or service depends on the number of users who use it. A clear example is WhatsApp, anyone can start using Telegram Paraguay Mobile Number List but if their contacts do not have a profile they will continue using the first one. How can you create a network of users that generate value around your business? Z Scalability. A scalable company is one where profits can grow without expenses increasing at the same level. What parts of your business model are scalable and which are not? Can scalable parts become a new solution for existing customers or to enter new markets? Z Earn before you spend. Personalization is a clear example of an on-demand business model, which generates revenue before incurring costs. How can you earn before you spend? Z Recurring income.
Subscription models, for example, Spotify, Amazon Prime or Netflix, do not depend solely on one-time transactions. Can you convert a portion of your business to a subscription model and create a recurring revenue stream? Z Others do the work. There are business models that make customers themselves or third parties generate free value for you. A clear example is social networks where users produce and exchange content, with advertising being the main income generator, but there are other cases such as IKEA, which changed the furniture market by having customers assemble the furniture for themselves. themselves. How can you get others to do the work for you? Z Changes in the cost structure. Before WhatsApp existed, telecom companies made money through SMS messages. WhatsApp used the infrastructure of mobile operators to offer its free service. How can you change your cost structure instead of just cutting it? What can you convert into variable costs.