These things do not usually happen suddenly, but if there is a day we receive a “reality blow” that we cannot let go. You realize that your profits have been reduced by an important percentage, the number of customers goes down, your market share goes down and you notice how you have to introduce patches that do not lead anywhere. Basically, business survival is at stake and you do not know where the blows come from.
When this happens, leaving aside the startups, we can find three levels to qualify and quantify the problem in terms of business malfunction:
1- Bad management: At this point there is not much to explain, you are still in the right business model but said flatly you are not playing well your cards.
2- Not having been able to adapt to the new superficial tendencies of the sector: Perhaps the non-introduction of new products, not to digitize some part of the business…. In the end, you have substantial changes to make but that do not require “total surgery”.
3- You have stopped connecting with a real market: Here it is necessary to re-develop a new business model since your value proposition has stopped working.
In general, the following scheme should be reviewed:
ADVICE TO REACTIVATE YOUR BUSINESS MODEL
You have to be aware that coming to this point, in a way, is like starting over. Yes it is true that there are years of experience behind that serve as a basis but you need to re-break with what is established and understand what the new rules governing the market . If you do not connect with your old customers or you have not seen a new for some time, your product is no longer attractive and you have to find the origin and the relevant solutions.
To do this you can opt for these actions:
1- Incorporate or sign specific knowledge: Nothing happens to recognize that new knowledge is needed; maybe some years in the sector have caused us to lose perspective and give us disorientation. For this, there are different formulas:
- Fichar to an internal profile, expert in business models and creation of new business
- Hire the services of a consultancy that inspires confidence
- Hire a freelance expert consultant
2- Benchmarking action focused on competition: Are there any competitors in the sector that have managed to reinvent themselves? Can we seize something? Observing and studying the competition’s reaction may give some clues and clues to define the new value proposition.
3 – Detect the elements of innovation that we have within reach: At this point, you need innovation. It can be developed in many ways so you can start by knowing what possibilities you have:
- Product Innovation
- Innovation in distribution channels
- Innovation in marketing strategies
4- Carry out a new market study with “your new customers”: You may have lost contact with the market over time. It would be important to make a good sample by asking potential customers what their new priorities are and what is the most valued in the procurement of the product or service in question.
5- Study more mature markets: Certain markets may have gone through this process, and there you will have the keys to how companies have adapted to these paradigm shifts.
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Like it or not, we are in times of change. Markets change, customer needs as well and new technologies can create, modify or revolutionize the sector in which your company operates. We must continue with the high guard so we do not have to react too late, since when we have spent many resources trying to continue with the same business model.