Changing horse and track mid-race: Unavoidable business models innovation
In battling the impact of the prolonged outbreak, businesses across countries and industries are adjusting to the new normal.
From the roadside hawkers to the C-suite executives, everyone is doing everything they could to stay afloat within the pandemic ruthless wave.
Figuratively, companies are changing their horses mid-race or changing their tracks to adapt, because failing to respond fast enough could result in great losses.
Put succinctly, in the face of a global pandemic, business model innovation is unavoidable. At its simplest, business model is the way a person or a company creates, delivers and captures value.
Business model innovation has gone blindingly obvious when many companies are flocking into the healthcare industry to respond to the swell in demand that far exceeded supply.
In several instances, LVMH in Paris repurposed its factory from producing perfume to making hand sanitizer.
New Balance, a giant footwear brand, is now manufacturing protective masks.
Collaborating with 3M and GE, Ford Automaker is supplying respirators and ventilators.
Well-known retailers like Prada, Zara (Inditex) and H&M are joining the bandwagon to produce personal protective equipment.
Arguably, the reasons behind these shifts could be multifaceted: changing the product line to keep operations going, turning threats into opportunities, diversifying customer segments, scoring competitive advantage, boosting reputation, cutting cost, to name a few.
In Malaysia, since the Movement Control Order (MCO) came into effect, businesses had vigorously turned to digital technology and venture into the online marketplace, e-commerce store and drop-shipping.
Off-the-shelf-products are now digitized, with face masks and sanitizer as the new promotional bait.
The pandemic is reshaping the way businesses are operating, forcibly pushing the conventional ones beyond their comfort zones.
As proof, traditional kuih stalls are now take teaming with delivery riders; Pasar Pagi are now taking order over the phone; the neighbourhood grocery stores are now doing promotions online.
With the start of Ramadan month just around the corner, Malaysians could already envisage a whole new experience for the most awaited annual bazaar with e-bazaars or drive-through bazaars as a possibility.
The uncommon is now mainstream.
In parallel, a whimsically unique tradition in fish markets known as Pasar Bisik up north in Penang and Kedah are also experiencing a hefty reversal.
Literally translated into ‘the whispering market’, Pasar Bisik allows bidders to offer their price and fishmongers to auction their seafood only by whispering.
However, the peculiar custom is now abolished. What once used to be a quiet market for the past 60 years, is now bustling with bidders’ voices and fishmongers’ chants.
Amid these transfiguration, not all business has the luxury to pivot their business models overnight. Consider this, how could a barber, a beautician, a manicurist or a masseur attend to their customers when social distancing is strictly imposed?
Withal, for the risk-averse businesses especially the small ones, changing its business model may put their livelihood at stake, risking their ability to make ends meet.
Standing at the crossroads, their old business model is failing and at the same time, they are unable to whip into a new shape rapidly.
In this regard, the only option left is to stretch their creativity beyond the normalcy or change the track completely.
This piece is not merely unveiling the virtues of business model but more importantly it is to highlight that an everlasting business model is dynamic, hence, never static.
The grim reality of Covid-19 brings with it one important lesson for business owners which is: the outbreak has changed the rule of the game, therefore, business owners need to play the game better or play a different game.
While it is not wrong to believe ‘if it isn’t broken, don’t fix it’, in the anticipation of worst times ahead, business owners need to be ready to batten down the hatches.
With the possible extension of the MCO, nobody could guarantee when things would bounce back to normal. For that, the time has come for businesses to re-think their business models.
Dr Zurina Moktar is an expert in business model innovation, technology commercialization and biodiversity conservation. She holds a PhD in Engineering from the University of Cambridge, UK.
The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.