Fashion Mode

Three Imperatives for Business Growth

What underpins the success of those companies committed to business growth is that they do not try to play the game better than their competitors but rather they play a different game. These companies compete with a different strategy (or business model) and aim to compete with different rules in their markets so as to avoid head on competition.

Opportunity

Business model innovation is to offer the same products (or services) as their mainstream competitors but emphasises different attributes from those emphasized by the traditional business models of established competitors - in other words they sell them on the basis of a different value proposition. Thus whereas Seiko and Timex sold their watches on the basis of accuracy and functionality, Swatch took the market by storm by emphasizing benefits of design and fashion! Swatch did not discover the watch - it redefined what the product is and why the customer should buy it and uncovered a great opportunity for business growth.

Vision

The behaviour of every individual is conditioned by their individual mental model of the world. The most dominant mental model that any company has is its perception of what business it is in - and consequently its vision. The vision (or definition) that a company gives to its business conditions how that company and its stakeholders see its business. An appreciation of how vision can be used to motivate and draw support for a business cannot be underestimated. Note what Robert Polel, CEO of the Gucci Group said to explain Gucci's moves into such things as playing cards and chocolate: "We are not in the business of selling handbags; we are in the business of selling dreams!" Simply stated, as a picture of the new and better world that the business wishes to create, vision becomes a powerful leadership strategy underpinning business growth.

Scalability

Scaling up a business model with a distinctive offer of value allows a company to achieve rapid growth. But it also serves another useful purpose; it protects it from competitive confrontation. Information Communications Technology can let a company quickly scale up a new business model and so ensure sustainability. CEMEX, the Mexican cement company, redefined the way customers purchased cement using ICT to deliver just-in-time cement to enable their customers to reduce their prices to end users. Today CEMEX is the best performing large company in the cement industry!