Compare Cases New Business Models

Compare Cases New Business Models Name Institution of affiliation Date Compare Cases New Business Models The modern business environment is extremely competitive. Competition ensures that the market place remains fair for all players involved. It particularly benefits consumers, where competition will drive quality of commodities up and the price of the commodities down. The World Economic Forum in its Global Competitiveness Report notes that competition was critical in pulling the world market out of the 2008 recession. The report further notes that policies that enhance competition in the market place spur growth in the economy CITATION Wor15 \l 1033 (World Economic Forum, 2015). These policies together with monetary frameworks developed by the Federal Reserve Bank and central banks have provided greater liquidity to the market. The Japanese Central Bank went so far as to adopt negative interest rates in its effort to spur growth in the economy. Growth in the economy, while providing support to macroeconomic growth, provides a greater incentive for coopetition in the market place. Competition provides incentives for employees to work and for buyers to purchase. Competition, however, can lead to businesses failing. Where institutions fail to adopt modern business models built on technology and innovation. They are unable to provide products that can compete effectively in the market place. A key example is the smartphone war that has been waged between different phone companies. Apple Inc. created the IPhone, which consumers judge to be a revolutionary product. Consumers rewarded Apple's business model by continually purchasing a highly priced commodity. Apple's add-on services such as Itunes and the uniqueness of its hardware and customer service tied consumers to the company. Nokia, another phone company, was up to 2007 the world leader in making mobile phones. The company, however, failed to successfully transition into the smartphone market from the feature phone market. Nokia had hoped its brand would be enough to inspire loyalty in consumers. The company failed to provide its consumers with products that were as capable as the competition's CITATION Che13 \l 1033 (Chen, 2013). Businesses must be capable of preparing for competition and adapting to change. If Nokia, had been flexible enough to produce a smartphone capable of competing with the IPhone and androids, it would have survived the onslaught. A company's ability to compete favorably stems from the business model it chooses to utilize. The business model informs how the company creates and delivers value to consumers. The business model should thus be strong enough to capture consumers and innovate enough to generate products that provide utility to consumers. It allows the business to identify its core purpose, its target customers, and the strategy and offering to utilize to satisfy its clientele. Where a business fails to satisfactorily define its business model, the business lacks a coherent mechanism to guide its business practices. The internal practices will very often impact the external practices of the business. This will ultimately affect the productivity and profitability of...