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Business models help the organizations to run smoothly and efficiently, they recognize the customers and help the organizations to serve the customers in a profitable way. These models help the organizations to integrate the businesses in such a way that they create significance to the customers. Business models helps the organizations generate profits by identifying the approaches that attract employees, customers and shareholders, but these models cannot identify the competition in the business. Strategies are the base for a successful organization, so the best strategies should meet the demands of ever changing market. To adapt to these ever changing demands organizations use the change models that describes the future of organizations. It tells about the changes that will occur in an organization in future. There are basically four types of business model change strategies:
This is one of the most effective models for an organization to maximize the profits with their existing working logic. To grow the revenue of the organizations, they influence their existing business model by improving a part of their system. There are many ways to implement the realization model. Many organizations with good name in the market invest in advertising to attract the customers with their brand name. Introducing new products in the market is other innovative way to stay in the competition. The growing demand of a company's products can trigger in geographic expansion of that organization, like wise depending on the product, type and size of the organizations they can choose from penetration, addition sales and service, incremental products or roll up.
For example we take Andhra Bank, a very prestigious bank in India which has newly introduced internet, mobile banking and gold coins which are available at cheaper rates than the market. By using this service the customers can always keep track of their account and by introducing gold coins at cheaper rates they attract new customers. These services will require some initial investment but with lesser time and cost for managing a customer, less administrative work and by inviting new customers the cost can be recovered soon. They can now also aim on cutting down the opening of new branches for handling the customers. This gives customers the advantage of using the banking service any time anywhere.
DHL is one of the leaders in the packaging and delivery; it has 220 branches all over the world. It provides the customers with logistics and delivery systems. This organization mainly deals with customers, so to enhance the service provided to the customers DHL planned to implement ERP systems in their business process. After a lot of research they decided to go with salsforce.com's CRM. They uses salesfoce.com's platform and gave them the advantage of customizing the system according to the customer needs. They ensured they had centralization of data so that the CRM solution can be used to have a single view of customer all over their branches. This helped them to focus on the customer needs and enhance the service provided.
In renewal model organizations incessantly develop the products, services, plan, cost organization and ability to react to competition and even introduce innovative products to stay in competition. This makes the organization capable to approach the market in most innovative ways like strategic marketing, business development, business intelligence etc. This model is mainly used by very competitive organizations to keep ahead in the market. By introducing this model the organizations can endeavor new areas and set up a strong customer support and capability.
For example we take Gap and Aurora Foods who have implemented renewal models in their business process. Both the organizations buy the poorly performing brands and they try to sell increase the reputation of the brands by using strategies like marketing etc. These companies are the best in their market and are aiming towards innovative approach in the market.
A good example in terms of ERP is Toyota implementing SAP CRM and NetWeaver in their business process. Toyota Managerial Handling USA has 67 dealerships, its legacy systems were basically designed to process order taking and they needed to change it more towards manufacturing on demand. They needed an automated system that can accurately generate time, generate quotations and a system that gives the dealers the advantage of easily accessing the system. To meet up with these necessities Toyota used big bang approach to implement SAP CRM that is supported by Sap NetWeaver BI. Now the customers have the advantage of generating the quotation with the help of SAP CRM data that is integrated to vehicle management. The visibility of the sales has been improved leading to better forecast and sales strategy of the organization which resulted in cost reduction in the process. With new system the Toyota has improved the performance of the organization and enhanced the customer satisfaction.
Extension models give the organizations the capabilities to develop their business or enter into the new markets. It introduces innovative operating logic without necessarily replacing the existing model. These models basically expand the existing business of the organizations to cover up new markets, add up new value chains and innovative services. This model is mainly implemented through backward integration, forward integration, horizontal integration and externalizing an internal ability. The organizations tend to use this model when their resources in the existing market are drying up and need to change their focus on other areas of the market.
Safeway for example has introduced its own products at cheaper rate. It has many labels to enter into most of the products in the market and the cheaper rates ensure the competitive advantage of the products in the market.
Organizations who implement the journey model totally change their business models to adopt a new operational logic. They can change from the domestic organization to globalization. By using this model organizations can change from the traditional business model based improvement to a more value base change like ease of use, customer service etc. This results in lowering the costs of the processes. Another method is the organizations can avoid the commoditization by changing themselves from just promoting the goods to more customer solution. This model enables the organizations to serve the customers more efficiently and cost effectively. For example Dell offers the customers with more customized products that they choose with better reliability and quicker response. This enables the customers to choose the products with the configuration they choose by just sitting at home. Organizations can use ERP systems that integrate with the manufacturing to give a forecast to the management so that they can cut down on the costs. The procurement process in the ERP systems can be used for manufacturing on demand process. Organizations shift more towards the direct marketing by appointing effective knowledgeable staff for direct customer connection. This results in lower cost, better customer satisfaction and service oriented approach.
Customers used to buy the Dell products in the retail stores before introducing made t order in their process. So to ensure that they had direct contact with the customers, Dell introduced CRM SCM in their process. This system was also used for transport and delivering the products to the customers. They have the most effective supply chain system on the internet for this kind of products. Dell links the suppliers and customer to ensure the cost of the products is as low as possible. The CRM system gives the customers the advantage of customizing the products with better service.
These models can dramatically change the structures of the organizations if implemented successfully. All of these models change the logic of the business process except the realization model. These models can be used effectively by using Enterprise resource planning systems in the process. These models help the organizations in many ways lie shifting from the business, globalization and expansion of the organization