Business model handbook for enterprise leaders

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Business model handbook for enterprise leaders

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Think your enterprise can be a leader without a well-thought business? A business model is necessary for you, as an enterprise leader, to scale your ideas, products, and services and sustain them. Here's your roadmap.

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What’s inside

  1. Which are the business models of the future?
  2. What is significance of business models?
  3. What are types of business models that can be referred to?
  4.  How to develop a business model?
  5. What are successful business models of last decade?

Which are the business models of the future?

Innovative technologies and novel approaches to conventional business practices are expected to drive business models in the future. Platform-based business models powered by AI, cloud computing, and blockchain are predicted to improve efficiency, streamline operations, and create new revenue streams. Immersive technologies and eco-friendly practices in the experience and creator economy enhance user engagement and provide new monetization opportunities. The machine and API economy leverage AI and automation to reduce operational costs and ensure ethical and responsible use. Platform ecosystems are also expected to support innovation and be built around data platforms used by organizations, customers, vendors, and other stakeholders. Download Complete Research

What is significance of business models?

To stay ahead in today’s market, enterprises must navigate market dynamics, consumer behavior, and technological advancements. A comprehensive business model is critical to their performance, optimizing operations and generating additional revenue sources. It should identify the target audience, market segment, and describe products or services while developing strategies for marketing and sales, assessing costs, risks, and profitability. Platform-based models powered by AI, cloud computing, and blockchain will streamline operations and create new revenue streams. Innovative technologies and eco-friendly practices will enhance user engagement, providing new monetization opportunities while leveraging AI and automation to reduce costs.

In today’s fierce competition, your business model is the compass that guides you to success – set it right, and you’ll sail towards your goals.

What are types of business models that can be referred to?

Several business models have emerged based on specific business needs, including e-commerce, subscription, freemium, marketplace, franchise, and direct sales. Each model has unique features and advantages and may overlap with other business model features. Choosing a suitable model can help an enterprise to succeed in a competitive market. Based on research by Wipro Lab45, business models can be categorized based on various parameters such as distribution, licensing, target audience, and technology. We have classified them into six broad categories, as listed below. Most enterprises today follow one or a combination of these models based on their strategic priorities, customer preferences, market demand, and profitability. The categories mentioned are not exclusive but are the most popular. Download Complete Research

How to develop a business model?

Business model strategy refers to the design and development of the business model to create, deliver, and capture value for its customers, while achieving its overall enterprise goals and objectives. Enterprise can create a business model plan that considers all its main business model components, aligns with its aims and objectives, and changes with the market over time by following the eight phases stated below, with interactive and incremental models.

What are successful business models of last decade?

Enterprises that have thrived in the last decade have embraced novel methods to create value and gain a competitive edge. One such method is the ecosystem business model built on a digital platform. Successful ecosystem business models are founded on mutual benefit, co-creation, and collaboration. By focusing on these elements, companies can build a healthy ecosystem that delivers unique value propositions and promotes sustainable growth. Amazon and Airbnb are good examples of prosperous business ecosystems that have used these success criteria. By leveraging technology and data, successful firms have improved efficiency, created new revenue sources, and maintained a competitive edge… Download Complete Research

Credits
Author@lab45: Hussain S Nayak, Poonam Pawar

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The platform ecosystem business model: A blueprint for enterprises. Part 1

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The platform ecosystem business model: A blueprint for enterprises. Part 1

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Platform ecosystems are defined as open or closed networks where an orchestrator mediates relationships between a diverse set of complementary stakeholders. Orchestrators receive benefit from both accrued value in the platform ecosystem and in barriers to entry that ecosystems create for potential competitors. Platform ecosystems are also defined by a collaborative strategy that aims to create value for all stakeholders, including customers, partners, suppliers, and competitors.

What's inside

  1. Platform ecosystem overview
  2. Structure of Platform ecosystem
  3. Platform ecosystem typologies
  4. The rise of ecosystem orchestrator

Platform ecosystem overview

Platform ecosystem business models (platform ecosystem) have evolved in response to expanding business interconnection and complexity. They depart from traditional business models that emphasize internal control and efficiency. They establish and utilize connections with ecosystem stakeholders, who are independent actors, to produce value. They aim to establish a network effect that produces more value than any single entity could provide. Download Complete Research

They, ideally, conduct the following:

  1. Recruit multiple participants. At least one member acts as the orchestrator of the participants.
  2. Provide enterprises a structure for working together.
  3. Leverage the advantages and skills of related enterprises, groups, and participants in the ecosystem.
  4. Remove obstacles from the user journey and create additional value through ease of use.
  5. Enable every participant to use state-of-the-art technologies and systems to fulfil their individual needs.
  6. The orchestrator leverages the total value created by the platform ecosystem to benefit their business model.
  7. All stakeholders in the ecosystem also benefit from the value created by the ecosystem.

Structure of platform ecosystem

The essential elements of ecosystem business models are:

Suppliers(n): Businesses or institutions that provide the materials, components, or logistical support.

Orchestrator(Only one): Coordinates and controls the interactions between various ecosystem participants, such as suppliers and complementors, to add value for customers and foster the ecosystem's overall growth.

Complementors(n): Offer additional goods or services to the orchestrator's offers.

Customers(n): End-users or beneficiaries.

Ecosystem platforms rely on network effects to grow and prosper since they boost the platform's value as more users join and interact with the ecosystem. Network effects create a positive feedback loop that improves the overall value proposition is created as the user base expands and draws in new developers and enterprises to offer their services. Download Complete Research

Platform ecosystem typologies

Today, organizations across industries are exploring the potential of ecosystems to create additional value and minimize capital-intensive internal processes.

The business landscape is now characterized as the "age of business ecosystems," where enterprises that adopt ecosystems are better positioned to drive innovation and capital efficiency, and thus create more value for customers.

Partnership ecosystem: Partners within an organization work together to realize common objectives, capitalize on one another’s advantages, and co-create value.
Examples: Disney-Marvel, Amazon-Whole Foods Market

Aggregator marketplace ecosystem: A platform-based environment that brings together a variety of suppliers and buyers, facilitating transactions and generating value for all parties.
Examples: Amazon, Airbnb

Growth/expansion ecosystem: This ecosystem gives firms the resources to grow their operations and penetrate new markets. Resources include capital, knowledge, collaborations, and infrastructure.
Example: Uber expanding to Uber eats

Orchestrator ecosystem: A platform or network that facilitates transactions between ecosystem partners. In addition to setting up the infrastructure and tools needed for participants to work together and add value, the orchestrator also defines rules, standards, and protocols.
Example: AWS marketplace

Supply chain ecosystem: Enterprises leverage their existing capabilities (value chain ecosystem) to create an ecosystem of suppliers and partners to support their operations and growth.
Example: Apple’s supply chain ecosystem, Dell’s Direct Model

Community-based ecosystem: Businesses that are create social and environmental impact alongside financial goals.
Examples: Amul, Patagonia

Crowdsourcing ecosystem: Ecosystems that enable individuals to collectively contribute their knowledge, skills, and resources towards solving problems, generating ideas, or completing tasks.
Example: OpenStreetMap, Kickstarter

Technology/Innovator platform-based ecosystem: Ecosystem of interconnected IT resources that can function as a unit. Comprised of suppliers, customers, applications, and third-party service providers.
Example: SAP platform, Apple iOS ecosystem

The Rise of the ecosystem orchestrator

Ecosystem orchestrators create strategic partnerships and alliances to connect companies in a value chain.

They offer products and services that are mostly limited to their original product range and they share customers and data with their partners.

Orchestrators connects various stakeholders and create shared value for an ecosystem community.

They take on the risk, complexity, and challenges of supporting stakeholders. They enable others to create and sell goods and services through their ecosystem platform. They maintain a high level of quality within their ecosystem. Download Complete Research

Their roles are as follows:

  • They create platforms that drive exceptional customer experiences.
  • They define the reference architecture, creating the “true north” for ecosystem participants.
  • They collaborate with their partners to co-create and integrate services that address business issues and deliver valuable outcomes.
  • They ensure they are delivering differentiated customer experiences.

Platform ecosystem business models have proven to be a powerful modality, both for creating value and fostering collaboration among stakeholders.

Niche players in emerging industries may find it challenging to participate in global transactions or initiatives independently, but when positioning themselves within the ecosystem they can leverage the broader ecosystem’s resources or network effect to engage in larger endeavours and expand their customer reach.

Larger enterprises that struggle with agility in producing niche goods can benefit from partnerships with more nimble businesses within ecosystems. They can gain access to specialized knowledge and capabilities that enable them to deploy innovative products to market at speed.

As technology continues to reshape businesses and economies, the importance of platform ecosystem business models are expected to grow. Competent management of platform ecosystems will be a defining characteristic of successful leadership teams. Platform ecosystem owners can enhance their operations and user experience by establishing effective feedback channels. Download Complete Research

Credits
Author@lab45: Poonam Pawar
Contributing Author: Hussain S Nayak

Top trending insights

The platform ecosystem business model: A blueprint for enterprises. Part 2

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Special reports: POV’s are in depth business reports that help leaders make key decisions.

The platform ecosystem business model: A blueprint for enterprises. Part 2

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ignite inspiration within

Download Special Report

Platform ecosystems are defined as open or closed networks where an orchestrator mediates relationships between a diverse set of complementary stakeholders. Orchestrators receive benefit from both accrued value in the platform ecosystem and in barriers to entry that ecosystems create for potential competitors. Platform ecosystems are also defined by a collaborative strategy that aims to create value for all stakeholders, including customers, partners, suppliers, and competitors.

What's inside

  1. How are ecosystem business models helping enterprises?
  2. How do enterprises mastering ecosystems drive transformational growth?
  3. How to build ecosystem in eight steps
  4. Transformative trends redefined

How are ecosystem business models helping enterprises

Ecosystem business models offer diverse benefits, as described in part one. A brief summary can be found below:

  • Agility and adaptability: Ecosystems can adapt swiftly to shifting market circumstances due to effective collaboration across a broad set of partners.
  • Access to innovation and technology: Diverse set of collaborators enables access to new ideas, technology, and innovation.
  • Improved customer experience: Seamless integration of services and goods provides ease in creating value and results in better customer experience and satisfaction.
  • Cost reduction and operational efficiency: Shared resources, distribution networks, and economies of scale reduce redundancies, create cost savings and optimize operations.
  • Market expansion: Leveraging the reach of a given ecosystem, businesses can increase their total market reach and gain access to new clients.
  • Additional income streams: Ecosystems offer the potential for additional income streams through cross-selling and value-added services. Download Complete Research

How do enterprises mastering ecosystems drive transformational growth?

For enterprises seeking to adopt an ecosystem model, the key factors of success are listed below:

How to build an ecosystem in eight steps

The following are the identified eight steps to develop an ecosystem business model:

Transformative trends redefined

The key trends in ecosystems business models being adopted by enterprises at present are as follows:

  1. Collaboration among competitors: More businesses are collaborating with their rivals to expand their ecosystems.
    Example: Apple and IBM collaborate to create business apps, and General Motors and Lyft collaborate to create autonomous ride-sharing services.
  2. The emergence of consortium-based platform-based ecosystems: Many firms are shifting towards platform-based ecosystems to interact and collaborate with their partners and clients.
    Example: AWS offers a platform for enterprises to host their apps and data.
  3. Increased focus on customer experience: A smooth, intuitive, and appealing customer experience across all touchpoints is a growing area of enterprise focus.
    Example: Apple has created an ecosystem that integrates its devices, software, and services seamlessly.
  4. Adoption of AI and autonomous systems: Automation and AI are used more frequently in business ecosystems to boost efficiency and streamline procedures.
    Example: Siemens leverages AI to instantly improve the operation of its gas turbines within its broader ecosystem.
  5. Rise of open innovation: More enterprises are embracing open innovation to collaborate with external customers, suppliers, and startups.
    Example: GE's Ecomagination program, which collaborates with entrepreneurs to hasten clean energy technology development.
  6. Emphasis on sustainability and social impact: Businesses are incorporating sustainability and social impact into their ecosystem strategy as ESG becomes more prevalent across enterprises.
    Example: Unilever has a Sustainable Living Plan that aims to improve stakeholder health and well-being and minimize the company’s carbon footprint. Download Complete Research

Credits
Author@lab45: Poonam Pawar
Contributing Author: Hussain S Nayak

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