Types of Business Models

Discuss about the Business Model and Disruption for Dominion Bank.
 

The business model is the unique innovation an organization, entrepreneur, and companies employ that fits into their view of business so as to increase the operational scope of the company. The business model adopted by a company is aimed at maintaining the organization for a long period of time ad versing the different market conditions that might come. The business model targets customers, solutions to various company stalemates, the best areas to venture e.g. youth programs. There are different types of business models. Business models vary from organization to organization. Some of the commonly used business models are; direct sales, franchise model, freemium model and subscription model.

A company feeling it’s not serving the purpose it should and does not get profits should change their business model. Business environment might change a particular time making it necessary to change the model.  There could be new government policies that include tax rates. Such factors are called business disruptions.  Business disruptions are factors that influence the business models of a company both in the negative and positive ways. This enables the business to suit the rapidly changing business environment (Bocken, Short, Rana & Evans, 2014). These disruptions include; change of culture, globalization, and customer dependency, among others. This is according to Harvard business review and literature. 

Smart products can act as disruptions to companies in conducting their business. The products affect business models of great companies for instance.  Commonwealth bank that provides finance and banking services in Australia.  The disruption of smart products influence opportunities in the market or disadvantage them. 

Smart connected products have many, of these physical components that influence the decision of the company through soft wares updates, and made through to services to continually improved and optimized with the visits to the leader.

The competitive landscape reshaped by smart products in the positive way include;

Customer accounts are easily monitored by the account owners and the bank. The customer can receive bank services from anywhere they are not necessarily on the bank premises. Assisted by the use of a smartphone as a form of a smart product.

The bank makes software in places where the bank services are needed and a premise is still far-fetched to put. An ATM machine controlled by the bank to provide banking services to customers. This is a form of the smart product.

Business Disruptions

The bank uses self-coordinated smart products that help customers get round the clock services. The machines that are forms of smart products are self-automated and can on their own balance the accounts, calculate profits and detect any imbalances. These even make work easier for the bankers.

 The smart products influence the decisions in the following ways;

Since there are deeper relationships between the company and customers created by the smart products. The company has to improve their market strategies and accountability to the customers in order to maintain the company’s stability. Possible account delays should be avoided with the 24-hour customer service.

High market barriers are created by this, there are so many companies that provide banking services and with this smart products. They all compete for the same platform, therefore, limiting the advertisement market. This, in turn, creates a high market barrier for the Commonwealth Bank. 

With customers accessing so many products of the same kind, the company has to provide services at affordable costs. This is a model seeking to maintain the customer’s interest while it’s influenced by the smart product.

The additional of smart products in the bank services, sometimes do not benefit the company. The aim of improving the services using smart products aims at achieving customer satisfaction while getting revenues. The revenues might not be immediate as hoped.

This is some of the ways that smart products have influenced the decision at the banking service, therefore, influencing the business model.

Osterwalder Model

For a starting business entrepreneur, it’s logical to look at all the disruptions before setting business models (Paquin, 2016). This is to help get a perfect startup. The future of the banking industry in relation to the two business model is to get back to societal purposes that will steer them to a safe harbor rather than compete with the government’s upheaval (Esnard, 2016).  The business model of Osterwalder has nine important features that can be used to explain the influence on the finance and banking service

Stakeholders from whom the business sources key resources or partners with. This illustrates that company should have good connections with a key stakeholder. Mobile air network operators that provide mobile banking services to the customers should be part of the decision makers of the company as they are important in the implementation of the smart services.

Key activities required to deliver the service or product, such as channels of distribution, customer relationships, and revenue streams. The smart products improve feedback. The feedback can be used to the relationship between the customers. It’s easier to learn about challenges, customer demands and many more when the feedback is an instance, therefore the stakeholders can react with the help of the smart products.

Smart Products as Business Disruptions

 Resources that are needed to sustain the company. With the smart products, it’s easier to get resources through making social advertisement on the customer’s phone.  Physical machines can also be made and used at the press of buttons and improve workability at the banking firm.

The needs of the customers that are satisfied with the company’s new product. The use of smart product enhances value proposition.  The use of simple smart cards that link debit master card that is easily portable to the customers. The value proposition is therefore likely to improve through such smart products. 

The smart product improves customer relationship. The bank uses ATM machines for over 40000 places. These, therefore, means they relate to about three times the ATM numbers of customers. These numbers show largely an improvement of the customer relationship.

Furtherly monitor each of them. The use of mobile banking creates a good channel by which, the customer is reached through their mobile phones. This makes the channel direct and effective

Customer segments on which customer is the most valuable asset to the company. The customers who are involved in the transactions through the bank is the most important customers. They are supposed to be served with all the products they have to, including the model by developed by commonwealth bank that serves customers internationally, over sea services (Strahan, 2014).

The smart product costs a lot of money both to procure and install in the banks and fields. If they do not get a good response from the customer, this might affect the revenues of the company negatively as there is much investment to them too (Vik, 2016).

The last of the structure of the model is the revenue streams (Krumwiede, 2015). What does the customer pay for, to whom and through what means? This revenue streams have significantly improved with the coming of the smart products. The payment is electronically monitored and this, therefore, improves accountability. The customer also has an easier method of pay just through the phone.

The value proposition in the cases of business.  As much as the customers have a taste they look for unique features and value of a product over another. The customer will normally go for a business that makes their world even easier. The business model canvas stresses this looking at it as the intermediate feature of the service offered countered against the needs of the customer (Osterwalder, Pigneur, Bernarda & Smith, 2014). Failure to the business model for value proposition is likely to lead to the failure of the business. Some of the features that can be considered for value proposition include,

Ways in Which Smart Products Influence Decisions

The newness of the product – New services are likely to attract a large number of customers.

Performance of the product – Quick performing products are liked by customers hence ATM machines are preferred to the long lines in banks

Customization – Service that relates to the customers are easily accepted by the customer.

Getting the job done – Service that helps the customer achieve their goals will always be preferred by the customers. 

Design – Unique designs like the oversea debit cards attract the customer’s interest.

Brand and status – Selling brands are seen to be authentic by the customers and not a fraudulent deal, especially in banking services.

Price- Free mobile banking services are likely to attract customers.

Risk reduction- Secure services like the mobile banking would attract customers even more.

Accessibility – Readily available products are preferred.

Convenience – ease of use of a product makes the customer want to get it 

Global chaos might erupt in a sector. This chaos might disorient the organization, the resources and abilities that will help the organization get back to its normal ways are to be considered in the business model (Namitulina, 2015). The banking sector realized a lot of chaos ranging from government policies to tax enactment. The bank leaders respond by creating an organizational crisis program that uses its capabilities into the post-crisis era. (Vogler, 2015) 

References

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