Exploring new business models is essential for staying competitive, but it’s often met with significant obstacles. From the lack of strategic alignment to the complexities of integrating innovative models, this article delves into the 12 key challenges businesses face and offers insights on how to navigate them successfully.A major obstacle to defining new business models is the lack of clear strategic alignment between these initiatives and the overall vision of the company. When new business model initiatives are perceived as isolated projects, they risk not receiving the necessary support in terms of resources or priority. This lack of strategic alignment can also lead to internal conflicts, where different stakeholders pursue divergent objectives, weakening the effectiveness of overall efforts.
For instance, consider a large retail company that decides to introduce a subscription model for some of its products. If this initiative is not clearly integrated into the company’s overall strategy, it may be seen as merely a test or a side project, without a real connection to the company’s long-term goals, such as increasing customer loyalty or reducing reliance on promotions. As a result, the project may not receive the necessary support from key departments like marketing, operations, or finance, leading to its potential failure.
Exploratory Avenues: To ensure strategic alignment, it’s crucial that new business models are coherently integrated into the company’s overall vision. According to McKinsey, effective strategic alignment begins with a thorough evaluation of the company’s current strategy and the identification of convergence points between this strategy and the new business models being considered. This evaluation should include a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to ensure that the new initiatives reinforce, rather than compromise, the company’s strategic objectives.
Another effective method is to establish steering committees composed of representatives from various departments, such as finance, marketing, operations, and R&D. These committees play a key role in aligning new business models with the overall strategy, ensuring that all stakeholders are involved and that their perspectives are taken into account. Deloitte also recommends using governance tools like strategic dashboards, which allow real-time tracking of the progress of new business model initiatives, ensuring they remain aligned with the company’s strategic priorities.
A concrete example of successful strategic alignment can be seen in a large telecommunications company that launched a new video streaming service. Instead of treating this initiative as an independent project, the company integrated the service into its overall customer loyalty strategy. The steering committee aligned the goals of the streaming service with those of the marketing and operations departments, ensuring coherence between the efforts and the company’s long-term objectives.
Finally, it is crucial to clearly communicate how new business models support the company’s long-term vision. This communication must be consistent and involved at all levels of the organization to ensure that everyone understands the importance of these initiatives and works in the same direction. Clear communication and active leadership engagement are essential to maintaining strategic alignment over the long term.
In conclusion, the lack of strategic alignment can seriously hinder the success of new business models. However, by integrating these initiatives into the company’s overall strategy, establishing appropriate governance structures, and ensuring effective communication, companies can maximize the chances of success for their new economic models.
Wraping up
Developing new business models is a complex process that requires strategic thinking, clear governance, and the ability to adapt to market changes. By proactively addressing each challenge and exploring the recommended avenues, companies can increase their chances of success. Don’t hesitate to reach out to our team to discuss how we can help you in your journey
