A business model is a company’s plan for making a profit, including products, services, markets, pricing and cost. But models come and go. You need to keep them fresh or customers will lose interest and competitors will eat you for lunch.
History is littered with examples. Eastman Kodak Company and Polaroid were powerhouses in photography until they were killed off by digital photography. Blockbuster was a blockbuster until it was done in by Netflix. Traditional Hollywood was the entertainment leader but is now badly wounded by streaming. Buggies were big until Ford Motor Company built the Model T. Tower Records / Tower.com dominated retail music but got whacked by digital disruptions like music piracy, iTunes, and streaming businesses like Spotify and Pandora. COVID-19 changed reality and left many businesses lifeless in its wake.
All business models need a periodic stress test and refresh. Use simulation to check your assumptions, such as product/service offering, customer base, pricing model and fixed/variable cost structure. Shock test your model with a +/- 20% to 50% change in demand, prices, attrition, or other key factors. Avoid surprises. Make your business model the envy of your industry. MOSIMTEC is here to help.
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