Business Model
Business Model

A company’s business model is at the core of its functioning and defines what value it adds for its consumers and how it ensures the said value to be created.


A crucial part of any business model concerns its economic dimension. An incorrect business model can result in low effectiveness of an organization and financial instability. And should the company still manage to be profitable, this can take place at the expense of important values, such as: low quality product, irritated and exhausted employees, complicated and disorganized relationships with providers, high operational risks and consequently, increased expenses, and dissatisfied and non-loyal clients. The resilience of an organization facing such challenges then becomes questionable.


When an organization fully understands who its consumer are, it should ask what features its product should have and what the main channels for providing this product are, what value it creates for consumers and what economic model it should have – in order to operate effectively and achieve top results with the existing resources available. If needed, such companies can easily transform their business model, by re-modelling it to modern requirements and challenges.


For start-up companies, a well-chosen business model can guarantee that the product they offer is tailored to the needs of potential clients and when pursuing a new market, that the capacities available in the company will be utilized to the full. As a result, resources will be correctly calculated.


As for already established, strong companies that have achieved success through a specific business model, they often fail to realize that in the meantime, their business model still requires revision and update. Often, when such companies suffer from stagnation, they fail to see the need for change in their business models and utilize time and resources unwisely to solve problems. On the other hand, successful companies know that their business model is a live and constantly changing system that will be revised from time to time and will be transformed in compliance with market requirements, consumer behavior and new technological challenges.


A business model requires transformation when:


  • An organization is excessively focused on a product or service and does not take consumers’ needs into account. Companies like these miss the opportunity of long-term development and their pace of growth slows down.

  • An organization is less effective and its profitability index does not improve year-on-year.



  • An organization does not take every important stakeholder into account and their impact on its activity. As a result, it loses control and operates in a reactive manner.

  • An organization is not familiar with its consumers and their needs, fails to have effective communication in the language consumers understand which results in a loss of interest and in the end, the company’s market shares go down.



  • Necessary resources and respective operational activities are not correctly assessed in the business model, which hinders the pace of business development.

  • A business model that does not envisage external threats and opportunities deprives the company of the ability to prepare for new challenges, adapt in a changing environment or acquire new opportunities and incorporate innovations.



  • A business model is weak if the distribution channels selected by the company are not effective. It does not matter how valuable the offer made by the business is if potential clients do not know about it or do not know how to search for       it. As such, the company’s sales are low and stagnant.



 



We help companies in assessing the effectiveness of their business model, the formation of a new business or transformation of an existing one. In this process, we are guided by the company’s values and goals, and we do our best to tailor the business model to clients and in general, the market needs so in the end, everything results in sustainable economic development.


When developing a business model, our cooperation with a client involves the following stages:

Stage 1 – diagnostics of a business model arrow
  • The first phase of strengthening the business model involves analysis and diagnostics of the said model. For this purpose, ACT undertakes the following actions:
  • Analysis of income and costs
  • Audit and evaluation of processes and procedures
  • Evaluation of financial and human resources
  • Analysis of the effectiveness of distribution channels
  • Analysis of the effectiveness of communication
  • Analysis of the loyalty of existing clients
  • Analysis of competitors and the consumer market
Stage 2 - assessment of the existing business model and planning the changes required arrow

The following phase is an evaluation of the organization’s current business model based on insights identified during diagnostics. In order to ensure the effectiveness of decisions, ACT’s consultants organize workshops with the participation of those responsible for the strategic business domain of the client company. This stage also involves making decisions on the need of transformation of the business model and identification of the required changes.

Stage 3 – transformation / renewal of the business model arrow

This stage involves the renewal and improvement of separate components of the business model or full transformation.

Stage 4 – supporting and incorporating changes arrow

The final stage is the incorporation and implementation of a new business model. This is the stage when ACT empowers its clients in the following directions:


  • Development of strategies respective to changes and action plan
  • Supporting communication of changes
  • Supporting operational changes
  • Supporting other required changes.

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