Platt Perspective on Business and Technology

Planning for and building the right business model 101 – 10: business models as long-term processes

Posted in startups, strategy and planning by Timothy Platt on July 13, 2015

This is my tenth posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3, postings 499 and loosely following for Parts 1-9.)

I focused in Part 8 and Part 9 of this series on the issues of asset allocation in bricks and mortar, online and hybrid model businesses, and on better determining what fixed non-liquid assets should be held, and how much liquidity should be held as readily available too. Then at the end of Part 9, and after arguing the case that:

• Essentially every business has to be at least partly hybrid now with both fixed physical assets (even if just at small levels) and an online presence,
• I stated that I would follow that discussion here with one on change and on how businesses and business models need to adept over time and both in the face of sudden disruptive change, and in response to the accumulating pressures of more slowly advancing evolutionary change.

Every business faces change and the significant potential of change, and all of the time. This is obviously true for businesses that operate in fast-paced, rapidly changing marketplaces, where their competitors are always looking to produce and offer their next generation newer and better and they have to run in this change and innovation race too. And this is also inevitable for any business that seeks to remain relevant when the consumers of their marketplace are always demanding newer and better from them. But this is also increasingly true for businesses that find themselves in what might be considered to be more mature and stable industries with steady customer bases that are heavily loaded towards late adaptor consumer demographics – where their customers by and large seem to simply want the tried and true mature product lines that these businesses have seemingly always been offering.

I have already been discussing in this series, one of the consequences of ubiquitous real-time online and telephonic connectivity, with the growing requirement that businesses essentially all take on a mixed bricked and mortar plus online, or hybrid business model approach. This obviously has more overt, consumer-facing consequences for businesses that would seek to realize a more overtly bricks and mortar approach as online businesses do not of necessity need to have showrooms or other directly customer-facing physical assets to succeed and thrive – just business-supportive non-liquid physical assets and space to maintain and use them in (which can be minimal but which is unlikely to be zero as a proportion of overall assets held.)

A second consequence of ubiquitous connectedness has been a breaking down of the traditional boundaries between markets on the consumer side, and between business verticals and even entire industries on the producer and provider side, where best practices and successful product ideas and options can leak into new contexts more easily – and much more rapidly, and where new innovation per se can catch hold and spread virally that much faster too, and both for consumer awareness and for rising consumer demand. When anyone anywhere can reach out to shop and purchase online from businesses that can be located anywhere, and when businesses can sell for all intent and purpose to a globally reaching marketplace this creates scales of opportunity that can support new business innovation – including innovation that crosses what have been considered traditional marketplace boundaries.

Customers see their computers and tablets and smartphones – and the web sites and other channels they shop through – and it is as easy to click into one such site as it is to click into any other – and without significant perception barriers as to what type of business they might be entering.

And all of this, of course, completely redefines what it means for a business to cater to a niche market, or for it to be a highly specialized enterprise.

• Now at least in principle even the most specialized niche business can make itself accessible to and can reach out to a much larger geographically diffused market of interested consumers and even to a truly global market,
• Where a strictly bricks and mortar traditional business would be limited at best to just a geographically small local market.

This posting is about addressing change, and both slow evolutionary change and rapid disruptive change. And with this discussion up to here I in fact address both – even if they represent change that businesses and consumers often take for granted.

• Sometimes the most important challenge in addressing significant change can be found in just seeing and understanding it, and for what is happening and for its impact and implications.

And this change, taking place globally and across all markets and industries, simply serves as a backdrop to the steady drumbeat of more business and industry-specific change that is also proceeding at a rapid ongoing pace. The subtitle of this specific installment is “business models as long-term processes.”

• Long-term, businesses need the resiliency and resources that would be required to both succeed and to thrive in the midst of all of this
• Where that, and certainly on a longer-term perspective, often means transitioning from a fully bricks and mortar to an overtly hybrid business model and business plan,
• As just one thread of a more complex ongoing process of adaptation and change – and a thread of change that is already well underway for many if not most businesses.
• Even small mom and pop stores like local convenience stores are increasingly coming to need and use sites such as Facebook and Twitter now, and even if they do not market or sell online through their own business websites.

I am going to turn in my next series installment to consider exit strategies next, and in anticipation of that cite Part 18: exit strategies and long term planning of Online Store, Online Market Space, for background reference material. You can find that series at Startups and Early Stage Businesses as postings 20 and loosely following for its Parts 1-32. And in anticipation of that, I note that exit strategies per se do not necessarily just involve leaving or closing a business – they can mean transitioning a business and in any of a wide variety of ways. And this complex of issues and processes is not just an option that would be faced by a business leaving its startup and/or early stage business phases either. And as transitions involve both endings and beginnings, or at least re-beginnings I will discuss entrance strategies too.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 3 and also at Page 1 and Page 2 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too.

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