AS businesses resume operations, companies should review their business models to ensure that they remain relevant and profitable even as the market has changed.
UCSI Consulting Group chief executive officer Dr Raj Kumar likens a robust business model to building a solid house.
“When we talk about a solid business model, it is important to have an alignment of our value, profit and people propositions.
“Value is what we create for our customers, profit is what we create for our shareholders and for the people side, it is what we look at in terms of our own people and also the people we are creating value for externally.
“It’s not a zero-sum game where one is more important than the other. It’s about alignment, ” he says.
He explains that many companies tend to focus on value proposition. Companies like Grab and Uber, for example, whom a lot of young companies try to emulate, offer good value proposition for consumers.
“However, Grab is still looking at ways to monetise their business. So for businesses, it is important to have a business model that works. You don’t just want a return on coolness, you also want to be profitable. It’s important to get back to basics and relook at your model, ” he says.
During an online seminar on the ‘ABCs to Navigating Rough Seas’, Raj recommends that SMEs use the Business Model Canvas (BMC), which covers nine components, to design a good business model.
These components are value proposition, buyer segments, customer relationships, channels for engagement, key partners, business activities, core capabilities and resources, cost structure and revenue streams.
“Look at what value you are creating for your customers. That is the main purpose of a business, to solve customers’ problems.
“Then look into who you are creating this value for, how are you initiating and maintaining your relationship with customers and what channels are you using to reach and engage them.
“During this time, it is also important to build strategic partnerships. So identify who are your existing partners. Also look into your main business activities.
“It is important that your business activities are aligned to your value proposition so that you are more effective and are not busy with things that don’t add to your topline.
“What product and service bundling can you do either on your own or through partnerships? And how can you build new revenue streams?” he shares.
Raj notes that SMEs can benefit from the BMC tool to rebuild their business models as many of them do not have the right fundamentals and this period presents them with an opportunity to get back on track.
He advises companies to reflect on the strengths and weaknesses in their business models and to be agile enough to build a better model.
As consumer trends change and the market continues evolving, Raj expects to see more creative new business models across various segments moving forward.
The seminar was organised by The Star Media Group Bhd in partnership with UCSI Consulting Group.
UCSI Consulting Group also introduced a micro-mobile learning platform to provide companies with an opportunity to upskill and reskill with a range of training programmes.
UCSI Consulting Group will be providing two samplers for users to experience the mobile-friendly microlearning. The two free samplers are on the topics of ‘How to Be Agile in a Disruptive World’ and ‘Leading Change in an Uncertain World’.
If you would like to find out more or to obtain the free samplers, email firstname.lastname@example.org.
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