Global Business Model Innovation

By M. Isi Eromosele

Globalization and new technologies are giving rise to an unprecedented level of business competition while still creating extraordinary opportunities for companies to differentiate themselves in the marketplace. In today’s global, interconnected environment, business organizations face a major challenge in how to maximize shareholder value and sustain growth, while at the same time creating economic value for all.

An organization’s business applications and its technology underpinning form the foundation upon which it can implement innovative, market differentiating business processes. While product, service and operational innovations are important, innovation must also be applied to a company’s core - the way it does business and drive revenues.

With intensified competition, rising customer expectations and globalization affecting the way companies do business, fundamental business changes are necessary to remain competitive. Business Model Innovation is the answer. The way a company does business is an important differentiator, because operational innovations cannot be imitated the way products and services innovations can be copied. The competitive advantage engendered by continuous business innovations offer more long-term market domination.

Business model innovation is a way to preempt competitive threats from industry and non-industry competitors. Companies should strive to be the ones driving change within their industries, instead of being followers.

Over the past several years, competitive strategy has been evolving from one that is a zero-sum game where one competitor gains an advantage at the expense of the other, to one that is collaborative, where joint efforts create more economic value for all involved.

In competing for global markets, traditional competitive strategy stresses that companies be positioned in well defined markets, striving to build market share. In today’s interconnected global economy, the new competitive strategy calls for companies to be pre-positioned in emerging markets and co-develop these markets with partners, including their competitors, to maximize value.

In competing for market share with new products, traditional competitive strategy employed a closed business model by which companies competed by spending vast amount of funds on research and development. Today, an increasing number of companies are adopting the open business model by which they share expertise with carefully chosen partners, jointly developing products.

Traditionally, global businesses competed for customers through advertising in newspapers, on television and radio. Today, the more effective way is to develop long-term customer relations through web based technology with major focus on interactive communications and communities of interest.

Within their companies, major business leaders need to affect major organizational changes, eliminating divisional boundaries and leveraging shared services across the enterprise. In the current global economy, it is necessary for them to pursue new business opportunities, new competencies and new alliances that create value for their companies.

Innovations need to be implemented proactively which would result in business designs that are truly differentiating. This would enable them to be better equipped to respond to market realignments and internal operational demands. Additionally, forming collaborative partnerships will enable them to lower their operating costs, while providing opportunities for increased revenue generation.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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