Kay Plantes, partner at the Agile Strategy Institute wrote the article “Open markets and their implications for business model design” where she describes five market trends based on an example in education.
The five trends and the business implications she describes can be found below. I’ve added how an Open Business organisation -with Social Media as its door- can thrive on these trends:
Melting barriers to entry.
Business Implications: Are the barriers to entry built into your business strategy in danger of collapsing?
How being an Open Business helps: organisations have to survive and thrive in an transparent global world, melting barriers can be found both on the geographical level as Porter’s five forces. Social technologies and behaviour are both the cause and effect to this. This means that business agility has to be incorporated in order to adapt as cost-efficiently as possible.
Think of what Darwin said: “It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change“.
Business Implications: What micromarkets are under served by your effort to gain scale and therefore open to disruption?
How being an Open Business helps: Social media technologies, data and its insights are the new -realtime- wealth for organisations. It doesn’t help organisations only with identifying the micromarkets in a market development kind of way, but reversing it also so it gains product development insights. Social media are rich data flows that through Netnography or Market Research Online Communities (MROC’s) can uncover new and unmet needs in existing (micro)markets but also discover new micromarkets.
Best value wins.
Business Implications: If you cannot offer unique, hard-to-copy benefits, you will be forced to compete on price. When that happens, only the lowest cost solution earns acceptable profits.
How being an Open Business helps: This is where co-creation and open innovation kick in. By incorporating external stakeholders in the different processes and supply chains. When consumers prosume their products and services it will add their unique perception to the organisation’s core competences.
Higher-value roles emerging.
Business Implications: Are you defining your role and your company’s role correctly? What role delivers the most value?
How being an Open Business helps: Henry Chesbrough’s book “Open Services Innovation” offers a new approach that demonstrates how open innovation combined with a services approach to business is an effective and powerful way to grow and compete in our increasingly services-driven economy. Chesbrough shows how companies in any industry can make the critical shift from product- to service-centric thinking, from closed to open innovation where co-creating with customers enables sustainable business models that drive continuous value creation for customers.
Social Media is the enabler to do this on a scalable, agile and cost-efficient manner.
Business Implications: Today, the success of your organisation depends upon whether you have outside champions and partners helping to advance your solutions or linking you to another successful ecosystem. How supportive is your ecosystem?
How being an Open Business helps: This is the core of an Open Business, opening the organisation and processes directly and indirectly to external stakeholders, (co-)creating a value network where the shared Purpose is key and ignition for the cooperation.
Are there other ways how an Open Business or Social Media technologies can help thriving on these market trends?
To learn about and contribute to the understanding of Open Business, follow #openbusiness on Twitter.