Business model Innovation

Business Model Innovation basically tells how to earn more revenue with increased profit.  Just for instance, many business shops operate between normal working hours.  However, some of them remain open for extended hours or even on weekends to cater to their customers when most people are off from their work and go shopping with their families.  This unique difference in normal business hours and extended business hours of retail chain stores, drug stores, car show rooms or car repair shops, grocery shops, barber shops, etc, to facilitate customers defines the revenue maximization strategy by providing, in some cases, customized or value-added services to increase profit.

Any such strategy of revenue or profit maximization either by facilitating customers or by attracting other people (non-customers) to become “new-customers” is the basic purpose behind business model innovation.

In short, business model innovation is a way to make money in a different way than your competitors by challenging longheld business assumptions and setting new standards to compete.

We can say, 

          Business Model Innovation = Customer facilitation – Competition

Some examples are homeshopping.pk and hanif rajput catering services.

business-innovation-v2

Hanif Rajput Catering Services followed a unique business model approach by giving an exclusive touch to an inexpensive, age-old outdoor catering services concept. It transformed its once old image of “Tent Services and Deg Walas”, meaning tent and caldron providers, into a more high-end, event management company. It now serves the needs of “new-customer segments” as exclusive as multinationals, local corporates, and diplomatic missions, long served by five-star hotels.

an online shopping store selling a wide array of technological gadgets including mobile phones and digital products in Pakistan, found an alternative way to making online payments for its customers not comfortable with disclosing their credit card information due to chances of identity theft. It introduced a cash-payment-upon-delivery method for its customers placing orders online. Upon delivery, the customer first checks the product to ensure it is working fine before making payment to the courier. The company saw an incredible surge in its online sales revenue even in the absence of e-commerce transaction enablers such as PayPal, thus making huge savings on online merchant fees.

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