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The review of Part V in the Business Model Generation text provides valuable insights into the innovation process in the development and design of a business model. From the information, it is crucial to engage in mobilization, understanding, designing, implementing, and managing the innovation process.
Mobilization involves setting the stage for innovating a business model. It should be noted that a change in a business model does not happen by coincidence. The innovation process is usually unpredictable and messy. Mobilizing helps in reducing incidences of uncertainty and ambiguity (Osterwalder & Pigneur, 2010). Success can be attained by ensuring that all elements that assist in the business model innovation are timely assembled. There should be acknowledgement among the concerned stakeholders on the need for a business model with all information in the open to prevent conflict in the process (Osterwalder & Pigneur, 2010). Mobilization should ensure that all aspects of the business model are in line with the desired results as a way of preventing overestimation of the innovative idea’s value.
The success of an innovation depends on a proper understanding of the entire process and market factors. There should be a research and analysis of the elements requires for the development of the business model design. The success factors of a business model depend on a proper understanding of the target market and seeing beyond the initial boundaries. Innovation involves scanning the environment, interviewing experts, and collecting opinions and ideas that can help in validating an innovative project (Osterwalder & Pigneur, 2010). The success of an innovative business model will require an understanding of the various input sources, such as internal and external stakeholders.
Innovation is all about changes. People are often afraid of innovation due to its impact on their day-to-day lives. Designing an innovative model involves convincing affected parties that the new idea would help in complementing their activities (Osterwalder & Pigneur, 2010). Innovation should consider the viewpoints of prospective clients and outside experts as they aid in validating its importance. The co-creation of an innovative idea with individuals across the organization will reduce resistance while improving approval rates. The stakeholders should often be offered a platform where they can easily see beyond the status-quo (Osterwalder & Pigneur, 2010). The failure of an innovative idea arises from its focus on short-term as opposed to long-term benefits. New business model require a long-term design.
Implementing is a critical aspect of an innovative business model. In this case, there should be communication, involvement, and execution of an innovation (Osterwalder & Pigneur, 2010). When a business model has been designed, there is a need to implement. Some of the areas that should be considered include legal structures, milestones, roadmap, budget, and all aspects relating to the project. Uncertainties should be managed due to its impact on the business model (Osterwalder & Pigneur, 2010). The business model ought to adapt to the market feedback as it will determine the success among the consumers and other stakeholders. Communication is pivotal in ensuring that everyone in the organization understands the innovative business model.
The management of the new business model is also integral in the process. Some of the management activities include continuous assessment of the model, addressing conflicts, scanning the environment, and rethinking the model. The success of innovation depends on proactiveness, long-term perspective, and governance (Osterwalder & Pigneur, 2010). The lack of a proactive approach to a business model would have a detrimental impact on an organization. Famous successful companies have slid into crisis due to their inability to manage their business model through innovative practices.
Innovation arises from several different objectives. For example, a new business model might be needed to bring new products to market to create a new market. There can be significant challenges on the journey to designing a new business model, including the problem of finding the right model. Once created, a new model will need to be tested before full-scale launch and getting the market to accept the new model can be a struggle. Furthermore, once in place, there is a continuing process of adapting a new business model to adjust to market changes and to manage uncertainty.
Designing innovative business models is a messy process. There’s a lot of ambiguity throughout most of the process. It takes time, but the temptation is to prematurely jump on whatever solutions might present themselves without fully going through the process. It’s vital to take the time to explore all the alternatives. Do the research; develop the prototypes.
The design process has five phases:
- Start by mobilizing your team, set the stage and gather what you need. Thoroughly explain the need for a new model. It’s also useful to establish a vocabulary that you can all use to discuss business model design.
- Immerse your team in learning everything they need to know about the customers, the technology, and the environment.
- To begin designing business models, your team needs to develop several prototypes and test them out. At the end of this stage, you’ll need to choose the best business model design.
- Once you have selected the best design, implement it.
- Finally, the business model will have to be managed; the environment must be monitored. Occasional remodeling is necessary to adjust to changing circumstances, so adapt and update the model as needed.