Business Models Post Pandemic
In a post-COVID world, it is essential to change businesses models to generate new value for businesses, customers, and society. Only a tiny percentage of businesses are changing their business models today. Others obtain minor advantages as a result of changes in automation, processes, or business models. The shift to more inclusive business models is proving to be more robust.
Option 1: Evolve into new business models that go beyond today's efficiencies.
COVID-19 has resulted in the broadest and most rapid shift in human behavior change yet seen at scale. This transition has hastened the adoption of digital technology because digitalization is already underway in practically every firm.
According to the world economic forum's analysis of 250 digital initiatives worldwide, most organizations still focus on process automation and efficiency advantages. To put it another way, they digitize current processes, such as document workflows replacing paper-based operations. Fortunately, an increasing number can be characterized as process reimagination, in which existing processes are challenged and put to the test before being re-implemented. This category includes circumstances in which predictive maintenance replaces typical repair-replace cycles.
However, only a small percentage of firms change their operational model, implying that digital technologies have become an intrinsic component of their value-creation architecture. The Adidas group's so-called "Speedfactory" method, for example, incorporates a variety of current supply chain innovations, such as 3D printing, mass customization, near-sourcing, and the digitalization of its operations. Similarly, an operating model transformation might be defined as a bank that builds a hub to provide financial services to other banks or integrates them into enterprise procedures.
Option 2: Make business models that can withstand adversity.
A business model is a distinct logic of producing value in the back end, offering value to consumers and other stakeholders in the front-end, and capturing value through the organization's monetization mechanics.
Not all company models were struck equally hard by the COVID-19 problem. The first factor is the industry in which the company operates.
Healthcare has been a winner, with large suppliers of testing kits and near-patient testing devices such as Roche and Healthineers. While other industries such as the travel industry have been hit hard, some even filed for bankruptcy.
The second factor is the business model's resiliency. In the ongoing Covid-19 pandemic, resilience is one of the most widely utilized concepts among the worldwide business sectors. Expanding degrees of inclusivity has been seen as one of the sources of increasing resilience in business. According to the Asian Development Bank, an inclusive business model is a business that generates high development impact by; (i) improving access to goods and services for the base-of-the-pyramid population (i.e., low-income people); and/or (ii) providing income and/or employment opportunities to low-income people as producers, suppliers, distributors, employers, and/or employees. And the inclusive business must be commercially viable. 2
Consulting firms and other organizations have created a plethora of toolkits and recommendations to assist businesses in determining their level of preparedness to face and survive the pandemic. Due to their organically resilient business structures and processes, resilience and inclusive business go hand in hand. As a result, despite the obstacles they confront, inclusive firms in sectors like energy, health, education, and food are well-equipped to address humans' complex needs that emerged during the Covid-19 crisis. The Covid-19 problem also presents a once-in-a-lifetime chance for the public and private sectors to join together and make inclusive business the "new normal." Essilor, a French multinational in the vision care industry, exemplifies the power of public-private partnerships to improve community resilience at the national and global levels, which is more important than ever. Using its existing rural network of vision care practitioners, the company assists local governments worldwide in promoting awareness among rural populations about handwashing and social distancing. 3
Increasing inclusivity can be accomplished by using platform or solution business models to improve the comprehensiveness of the product and/or the stickiness of the business transaction. It entails making the transition from standalone, frequently physical offerings with many unrelated transactions to complete and integrated services with recurrent transactions.
The greater the breadth and depth of an offering, the larger the ecosystem surrounding its clients, and the more premium services are incorporated (e.g., free shipping, unique content), the fewer reasons to switch providers. Furthermore, subscription-based monetization models boost the likelihood that a client would continue to do business with the same vendor, often resulting in a chain of transactions.
1 World Economic Forum, 9 Nov 2020, Carsten Linz, how to transform your business model for a post-covid future, Accessed 30 Sep 2020, https://www.weforum.org/agenda/2020/11/transform-business-model-post-covid-future/
2 Journal of Cleaner Production, Volume 277, 20 December 2020, 124062, George C. Schoneveld, Sustainable business models for inclusive growth: Towards a conceptual foundation of inclusive business, Accessed Oct 29, 2021, https://www.sciencedirect.com/science/article/pii/S095965262034107X#bib4
3Accessed 19 Oct 2021, https://businessfightspoverty.org/inclusive-businesses-insights-to-staying-resilient-in-times-of-crisis/
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