Most businesses concentrate on refining their business model to enhance results. We see examples everyday of market leaders such as United Airlines, McDonald’s and Blockbuster who have built their reputation on a sound, predictable and consistent success formula. Today each is in serious trouble because of it. This article offers a method of recognizing when such success formulas are losing their effectiveness as well as an approach to reinvent them. The article presents examples of leading companies which have stayed with their success formula for too long, as well as examples of firms which have successfully reinvented their business model. It is possible to successfully anticipate the need for change and enhance a firm’s business model to maintain and strengthen a market leadership position. A strong focus on the changing requirements of a firm’s customers can be achieved through active listening programs in conjunction with a proactive commitment to deliver improved value to them everyday. Understanding that success formulas can fail is important for all business managers to recognize. This represents a significant change from a more traditional approach where businesses concentrate on refining their current business model to improve results. Change in how customers perceive value is the key driver. Anticipating and actively responding to this changing value driver requires a willingness and dedication to reinvent the firm’s success formula as appropriate.
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1 December 2005
This article was originally published in
Handbook of Business Strategy
