COVID-19 is yet another reminder that businesses ought to invest in constantly innovating and disrupting their business models to remain relevant, as customers’ needs change in an ever-evolving market.
How businesses can adapt their business models in a new world
At a macro level, the impact of COVID-19 has been devastating to most businesses. The first two months of South Africa's national lockdown saw almost the entire economy at a standstill; with no economic activity as the majority of sectors were unable to trade. As a result, businesses that were not deemed essential services were forced to reinvent themselves and look at different ways of engaging with their customers, validating the need to be agile and evolve with any situation, at any given time; true to Albert Einstein's words, "in the midst of every crisis, lies great opportunity,” ushering in opportunities for new business models and possibly untapped markets.
According to Papi Melamu, Executive Growth and Commercialisation at Barloworld Automotive & Logistics, it is imperative for companies to embed innovation as part of their culture, allowing them to venture into new products and services to diversify their portfolio and unlock new revenue streams needed during times of an economic slowdown.
Leveraging existing assets and capabilities during a crisis is key
“Businesses should not only focus on their current product portfolio and existing client base, but also consider other models of creating value’’, says Melamu. This may require the development of new partnerships or enhancing existing customer value propositions in effort to retain current clients while attracting new ones. It also requires the highest degree of agility, ensuring the ability to adapt to prevailing circumstances, not only for survival but to excel post a crisis. “Business models are the driving force behind creating, capturing, and delivering value, and should circumstances call for a different approach, a company needs to adapt accordingly”, continues Melamu. Most organisations have suffered great losses during lockdown, and adapting to the current state will ensure that those losses are minimised and a window to longevity is opened.
When redesigning business models, it is indeed prudent to consider the following key areas:
- Being asset-smart and leveraging emerging technologies such as Artificial Intelligence, Internet of Things, and other digital avenues to reduce the cost to serve and enhance customer experience is imperative. Taking into account social distance, technology is essential for creating a connection in the absence of physical contact and compels companies to innovate in order to survive in this low-touch economy.
- Adopt a customer-centric strategy enabled through customer data using analytics to draw specific insights that inform better decision-making and intelligence required to better understand customers and their evolving needs.
- Build strategic partnerships to create new products and services, allow growth by leveraging capabilities of partners within a particular ecosystem.
The world, as we know, is changing. As such, data and digital are taking centre stage. Data analytics and digital platforms will play a critical role in informing businesses about adapting to the current market and customer demands. Players that dare to adapt will live to see another day, while for some, strategic partnerships may be the answer. Partnerships are key for harnessing the strengths and abilities of multiple businesses, enabling parties to share the risk and seek innovative ways to solve problems while developing mitigation strategies for complex challenges. Businesses that thrive in this digital age have ecosystem-based business models, allowing them to grow and disrupt in the markets they operate. While market conditions, consumer demand, and behaviour are ever-evolving, so should business models.
Stay up to date with the latest industry trends and insights. Subscribe to our blog and get our latest content delivered straight to your inbox.