Business Model Innovation
This video is about the business model innovation. It is important to mention that the innovation is limited not only to the technological side of the business but also to the functional or the operational side of the business. It would be correct to say that the innovation is the key factor to develop the competitive advantage (Grissemann & Plank, 2013). Typically, the competitive advantage is developed in one of the two ways, either by creating the unmatched customer value or by reducing the cost (Nguyen, 2011). In the current business environment, innovation is much more than creating a new idea, creating a new technology or heavy research and development. In most of the cases, innovation is all about the learning from existing business models and re-inventing the business model (Wang, 2013). There is a structured process of innovation that the organizations should use. The first step of the innovation process is initiation followed by ideation, integration and implementation. It is recommended that the organizations should analyze their business models before making any change. One the business model is analyze, the organizations should apply the 55 innovation patterns and check for the consistency. Based on the 55 innovation patterns, the organizations should identify the best innovation pattern for them. The organizations should take a careful approach while implementing the business model of innovation. The leaders and managers should keep the critical success factors and pitfalls in mind. The 90% of the changes fails in the organization due to lack of support from employees (Ortlieb, 2015). Therefore, it is recommended that the leaders and managers should discuss the drivers of change with employees. It is also important that the organizations should take the approvals from project sponsors and senior management.
The idea or the concept of business model innovation could be applied to the established organization like Intel that wants to enter in the smart phone manufacturing business (Schreiber, 2015). It is important that the leaders of Intel should learn from the existing business models in the industry. There is no need to start the innovation or business model from scratch (Salmelin, 2013). The mobile phone industry is a developed and matured industry and Intel can learn a lot from the business models of existing companies like Apple and Samsung. It is important that the leaders of Intel should have a structured and systematic method of innovation (Strutton, 2014). The leaders should discuss the idea with different stakeholders of the company and it is important that all the employees of the company must support their leaders. Intel should understand that innovation demands time and the short term KPIs could be ignored in order to have a large gain in place.
The video is about the CAGE framework. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies (Tarzian & Force, 2013). It may also be used to understand patterns of trade, capital, information, and people flows (Terjesen, 2013). The video explains that the trade is more in the countries that have something in common as compared to the countries that does not have anything in common. The commonalties between the countries could be found on the lines of culture, geography, language, ideas, etc. The CAGE framework helps the organizations to select the countries for expansion. The video explains that there could be different types of distances across different industry verticals. (Rudolf, 2015). For example, the geographic distance, would affects the costs of transportation and therefore, it is of importance to companies dealing in heavy or bulky products. Another type of difference is the cultural distance that affects consumers’ product preferences. It is crucial for service based firms, but it is much less important for a cement or steel business (Huang, 2012). With the use of CAGE framework, the organizations in the home country could decide the next country where the organization should expand. For example, an American organization can use this framework to make a choice between Canada and Mexico for expansion.
The CAGE framework is a powerful model that could be applied to various organizations. Typically, the CAGE framework is used by multinational organizations that have to operate in multiple geographies (Haynes, 2014). The Australian organization like Qantas Airways can use this framework to make the expansion decision (Santos, 2012). Qantas is a global company with its presence in most of the developed nations. Qantas may have the option to expand its business in New Zealand or Singapore. The use of CAGE framework would help the organization to decide the best alternative between New Zealand and Singapore. With this framework, Qantas can develop a matrix where these countries (New Zealand and Singapore) would be scored on different dimensions. Based on the matrix or the result calculation, the management of Qantas can take the expansion decision (Mickiewicz & Stephen, 2013). The CAGE framework should be applied in a systematic and structured manner. The first step for Qantas would be to determine or identify the countries for which this framework should be applied. It is important that the distinction should not be made for more than five or six countries, otherwise it could be a very complex process (Gordon, 2012). Once the countries are identified, the management and leaders of Qantas should gather the industry data, statistics and knowledge to give score to these countries across different parameters and dimensions (Baregheh & Rowley, 2009). The organization can also consult the outside specialists and consults to give scores on these dimensions.
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