Why a Strong Business Model is Essential

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Whether you are on the war front, playing a computer game, a sound strategy or plan of action is what sets you apart from your competition. It is no different for businesses. The quest for sustainable advantage in business begins with a business model. With the advent of new communication technologies, technological advances and globalization of world economy, the need for a business model has increased manifold.

The urge to crack open markets and make it viable for business is driving business model innovation to new levels. Great business models focus on three basic points

  •  Finding high valued customers
  • Offering significant value to clients
  • Delivering great margins.

Successful businesses tend to have razor sharp focus on finding high valued customers. These customers could be retailers, wholesalers, distributors or end customers; just about anyone who purchases your product or service. What differentiates customers from a high valued customer is that high valued customers are easy to locate, can generate business for you in a manner that allows you to meet your sales objectives and those who keep coming back for you.

Unique products and services that offer a distinct advantage to your customer are sure to stay because these offer significant value. When you apply innovative ways to develop these products and services, you’re taking the first step to taking the market by storm. Think DropBox and Google. What did they offer their customers?


Higher margins come from improved processes, economies of scale, reduced production costs and various other factors. Adding features that provide significant value help position your product or service in a manner that allows you to charge more.

Remember to take care of your customers. Customer satisfaction costs are indication of the viability of your business model grading. If it pinches your profit margin then you seriously need to reconfigure your business model.

Make sure to factor in the changes in the marketplace. Your product or service should be able to meet the ever changing demands of consumers. The consumer’s choices are bound to change with new and better products coming in the market. Your product should be able to keep up with the change in demands and still maintain a place in the market.

Startup costs, operating capital, personnel costs and overhead costs are just a small percentage of the funding requirements for any business. The question is whether the investments will have a high return. Money is available for the right plan and the right model. You’ll find money available if your ROI is right and if you have financial leverage.

Whether you are a start up company or a multinational company, a robust business model is an indispensable part of every business. Having the right business model and altering it as and when needed is a good way to keep up with the changing business landscape.

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