Now is the Time for Business Model Innovation

timetoreinvent

Every organization in the Middle East should be questioning the who, what and how of their current approach to business, and finding a better way to offer value to customers and constituents. I’ll give you not one but four reasons why now is the time for business model innovation.

 

1.   The demonstrations in Tunisia, Egypt and around the Middle East show how out of touch governments can be with what their people want. The business world is no different — only instead of protesting, customers just go someplace else. One way to keep this from happening is to examine your value proposition and uncover new ways to serve customers. This is the essence of business model innovation.

 

2.  A recent PwC (PricewaterhouseCoopers) survey of CEOs worldwide reported that the majority of companies are shifting their growth strategies away from existing markets and are instead focusing on creating new products and services aimed at different markets. These companies are looking for ways to diversify their offerings and appeal to new markets because they know there is too much competition to simply rely on price changes, deals or feature-focused incremental innovations. To appeal to new markets they need to innovate their business model.

 

3.  The same PwC survey found that 49 percent of CEOs in the Middle East believe their home countries offer only low to medium opportunities for growth. Why? Because their home markets are saturated with the same types of businesses providing the same offerings in the same way (the “falafel shop syndrome” as I call it). Businesses in the Middle East need to do a better job of differentiating themselves and business model innovation is the way to do that.

 

4.  In a survey from GE of 1,000 business executives in 12 countries, 75 percent said that individuals and small- to mid-size enterprises (SMEs) can be as innovative as large companies. I would take that one step further and say that entrepreneurs and SMEs can be more innovative because they don’t have as much bureaucracy and can react to market changes more quickly. Small companies, especially startups, can offer an innovative business model that provides better customer experiences, and in this way they will disrupt the established companies that are not as agile.

 

There are many more reasons why now is the time for business model innovation. But how many reasons do you need to start making some changes?

 

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