Business Model Innovation is here to stay...

My fascination for Business Models never ceases. Continuing on from my article a couple of weeks ago, link to which is given below..

Business Model Series – Emerging New Models… – Rejo Francis

Let us explore a few more types of Business Models:

1.??????Frugal economy

This is based on the concept of making the most cost-effective product to meet the customer requirement. A good example that comes to mind is listed below. Approximate 1 million babies die in a year across the world mainly because of the lack?warmth. In major cities and developed countries the babies are kept in incubators to take care of this issue. But in underdeveloped places it’s not possible for local hospitals to afford incubators. A innovative solution which was worked to address the requirement of warmth was by creating a wraparound baggage which when held close to the mother would keep the baby warm and take care of this requirement.

Such innovations which are created to take care of the jobs to be done at very minimal cost is the basis of the Frugal economy.

Attaching below an earlier article on Job to be done for easier understanding of this concept.

https://rejofrancis.com/market-segmentation-is-segmenting-based-on-jobs-to-be-done-the-new-normal/

2.??????Free economy and business models

The best examples of this are some of things that we use regularly like Google search, YouTube etc. In these products and services, the products are given free to the customer and the revenue for the organization is based on advertisements.

Once a customer gets used to a particular free service it’s very difficult for the company to make the consumers to pay for the same as has been found out several times by platforms like WhatsApp and Twitter etc.

3.??????Performance based business models

This is very similar to the free services but with a graded approach with some basic services being provided free, with additional charges needed for unlocking different options. There can be multiple options depending on the service being provided.

4.???????Experience business model

This is new business model that is evolving. While some of the basic services are provided online for free, the customer has to pay for attending the actual event to experience the same. What is interesting is customers are willing to pay for the actual live experience. Please find attached below an earlier article of mine on experience economy which will help give you a better understanding of the same.

https://rejofrancis.com/products-to-experiences-the-experience-economy/

5.??????Crowd business models

This business model which is today more widely established in the funding business. Here people from a variety of locations who aren’t even know to each other collaborate through the internet to raise funds for a project or a cause. The could also be used for arriving at business and tech solutions and in the ongoing onslaught of the gig economy this is one business model which is likely to scale up very quickly and widely.

6.??????Pier to Pier business models

This is an extension of the crowd funding model, but unlike in crowd funding where several people maybe in thousands came together to fund a project in this case the funding is happening one to one. This is something that has existed with us from the time of human civilization only with internet and smart phones this interaction has been enabled from a much wider geography and from people not really known to us.

7.???????Bottom of the economic pyramid business models.

The bottom of the pyramid constitutes almost 40% of the human race and several innovative products and services aimed at this market like the Grameen bank and m paisa?have been created earlier itself. The growth of lower priced smart phones and cheaper net connectivity have enabled creation of such business models targeted at this segment. Considering the size of this segment this could be a huge differentiator.

The pressure to crack open markets in developing countries, particularly those at the middle and bottom of the pyramid, is driving a surge in business-model innovation. The economic slowdown in the developed world is forcing companies to modify their business models or create new ones. In addition, the rise of new technology-based and low-cost rivals is threatening incumbents, reshaping industries, and redistributing profits.

Indeed, the ways by which companies create and capture value through their business models is undergoing a radical transformation worldwide.

Business Model Innovation is here to stay.

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