Business Model is Supreme – Improve Your Business Model with Ndubuisi Ekekwe

Business model encapsulates the logic of a firm and the way it combines and uses factors of production to create value for stakeholders. To a large extent, a business model is the outcome of a business strategy framework. All great companies operate amazing business models. Interestingly, in this age of digital, we have noted that more than 80% of the largest online companies adopt one special business model: the aggregation integration construct.

In the scheme of things, you can have many models at the end of a strategy session. The business model you commit your business to has a catalytic impact on your success. In other words,  the business model is supreme. Yes, the company has been bleeding revenue, but they changed the CEO. Magically, using the same staff on the products, the revenue started going north. What happened? A new business model has been deployed.

But how do you drive that strategic framework to enable you pinpoint the best business model in your company? I will explain from June 5 here 

Comment on Feed

Comment 1: Without an agile and flexible business model you have no business. You may wish to ask Nokia and Motorola.

Comment 1R: Those are not business cases.
Those are myths.
Nokia and Motorola have flexible and agile business models.
However, business is always changing and no matter how flexiable you are your business can lose out.
Nokia and Motorola are still in business.
However, the industry will always change.
A simple look at history of business just 20 years proves this.
Looking for the stories that make the rounds are not business cases.
Those are just stories and they usually contain inaccuracies and faulty logic.

My Response: Both are actually right but as in social media, the fun is in the fight. In 1967, IBM was the most capitalized business in America. It was a great business (yes business model of selling hardware). But that business model was distorted when Microsoft demonstrated that money is in software. The key message is that business models must evolve as markets evolve. But arguing that it is a “myth” is not fair.

Microsoft under Steve Balmer ran a business model that was built around Windows. Satya came and changed that, focusing on whenever customers are. He opened Microsoft products to Apple, Android, etc at large via cloud. With the same products, he delivered 4x on market cap in 4 years!

Adobe was built on CDs. One man came and stopped and invented a cloud-based subscription- Adobe lives. IBM was losing revenue for more than a dozen quarters. They changed a CEO who changed the model of the old CEO, and focused on cloud/etc, the next quarter, revenue started growing.

These things are not myths. We can agree on one thing: the Motorola model was great. The Kodak model was great. But later, they were not. So, you need to keep updating because models are supreme.

Comment 2: I keep wondering the role of political and economic environments on a business, not as if, I do not know. But sometimes, the way you put these models, they seem like ceteris paribus, when we know in reality, things are not constant. What strategies and business models are to be used when markets are not being properly regulated, monopolies or near monopolies exist, government policies swing like pendulums and there are so many inefficiencies in the system, due to corruption?

Comment 2R: Those factors you highlighted are part of what are baked into a business model, not capturing them will prove lack of awareness.

My Response: Indeed, you use those components during strategy session to decide on the right business model to execute

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