What to expect after Coronavirus: Adapting your strategies with the Business Model Canvas
The COVID-19 pandemic has shifted everyone’s lifestyles completely. Reaching its fourth month, our quarantined lives have lasted longer than anyone would’ve imagined at the beginning of the year. For the first few weeks, everyone took it as an opportunity to get some ‘time off’ from their regular routines and began exploring what to do in isolation, but as it began to get longer people began to stress out and get desperate.
Without being able to see their friends and family, or go out to get dinner, or work at their office or even go to the gym, it’s clear that everyone has had their routines flipped entirely. Simple tasks and habits that people were used to were not safe all of a sudden.
Businesses began to struggle as individuals kept themselves at home, and more and more as quarantine extended. They’ve had to come up with innovative and original ideas in order to keep themselves afloat. It was difficult because every trend was based on a way of life that wasn’t there anymore, and the sudden change affected the pace at which consumers obtained their goods.
How have businesses evolved?
Service providers are one of the industries that are struggling the most during this time due to the fact that they provide non-tangible products to the user, covering specific needs that are not a priority at the moment. We can put it in perspective if we think about how a normal day looked in our lives before all this happened: What was your daily routine? How many stores did you visit during a day? Where did you go to meet your friends and clients? Is there any service you’ve stopped consuming since this happened?
Beauty salons, dentists, tourism companies, restaurants, aviation, education, infrastructure, entertainment, and luxury goods industries and all other businesses that are classified as non-essential activities had to reinvent and adapt their way of operating to survive the pandemic. Product-tangible businesses also had to suspend activities, but they had an advantage as they were able to continue selling their products online through a safe process.
With this huge change, we have seen how these industries have adapted: On-site classes became 100% online, most of them running their sessions via Zoom; The restaurant industry stopped offering its on-site service and was dominated by home delivery to the point where even gourmet restaurants came up with a sub-brand of their business to be able to enter the category of home delivery; Many businesses within the fitness industry revolutionized their platforms to offer prepaid virtual class packages. Instagram is one of the platforms that has helped many businesses as well. Users have more leisure time, so they tend to spend more of it on the platform, and with its IG Live feature, many influencers, brands, and businesses have turned to Instagram to be in constant contact and maintain engagement with their customers.
Because of this, the worldwide landscape has converted towards a low-contact economy, which led to a boom in eCommerce practices. Google Shopping, Instagram Shopping, Amazon and other digital platforms are the tools that have helped businesses stay connected with their clients.
Adapting your business model
A business model is the description of a business’s strategy that offers an in-depth analysis of the production, design, and creation processes of a business’s products or services. The most important factor that guides business owners through this process is the value proposition that they offer to their customers.
All businesses from the industries mentioned above already had a business model that was working for them, but with the COVID-19 pandemic, most of them have probably changed it to survive. This results in disruptive innovation. It’s challenging to restructure a company’s business model, but it’s necessary after a market disruption. These situations are opportunities for businesses to wake up and reinvent themselves, as well as fix issues along the way that they hadn’t identified before.
According to transnational company managers, there are three steps to be followed by all companies during tough situations:
- Adapt to the new normal
Businesses have already reacted to the situation, and some have recovered slightly, but now it’s time for them to adapt to the new normal. What is a tool that can help them have a virtually seamless transition to these needs?
Applying the Business Model Canvas
Alexander Osterwalder is the creator of the Business Model Canvas, which is a tool that classifies the components of a business model into nine fundamental parts. Used by many entrepreneurs, the BMC is a great way business owners can analyze the interior and exterior company pillars that ensure business success and ultimate customer satisfaction.
The following are some guiding questions that can help you analyze each area:
- Value proposition – What value does your business offer to its customers?
- Relationship with customers – How does your business take care of customers? Are you in constant communication with them? Do their opinions are listened to?
- Customer Segments – For whom are you creating value? Which are the characteristics of those groups?
- Channels – What are the channels you are using to reach your customers? Which of them works the best? Can you optimize these channels?
- Key Partners – Who are your key partners? What key activities do they perform? How have their activities and purposes changed?
- Key Activities – Consider the core of your value proposition. What is needed for you to fulfill this objective? What are the everyday activities your company goes through to function?
- Key Resources – Consider all the key resources required to deliver your value proposition, be that monetary or otherwise.
- Cost Structure – Which costs are the most expensive and the most important for your business to deliver value? What are the necessary costs you have to consider to ensure your business is working optimally?
- Revenue Streams – What are your customers paying for and for what are they willing to pay? How can you ensure that you’re financially staying afloat? Are there other strategies you can implement to ensure more capital?
Analyzing your business using this model is a great way to ensure all the necessary factors that keep your company afloat are being met. By identifying potential areas of opportunity in any of these points, businesses can swiftly reinvent and adapt new solutions to meet these challenges. Without a proper foundation, it’s impossible to provide the value proposition businesses offer in the first place. The Business Model Canvas is a quick and effective way to thoroughly go through this foundation and ensure optimal processes are being met and the proper resources are being provided so businesses stay afloat in times of need.
Taking the leap
It’s clear that businesses have had to adapt their traditional model during the pandemic, but we should look into what they’ll be doing after all of this is over. Will they go back to the old one, will they totally reinvent themselves or will they be keeping a mix between how they functioned before and what they have restructured?
Something to take into account to answer this question is something that no business has in common: their target audiences. New customer segments will probably appear and your company should spot them to offer something valuable and keep them, and it’s important to keep an eye out to identify their habits and properly forecast their needs after the quarantine ends.
It’s often said that from everything bad something good comes out. In this case, we can observe new cultural experiences, new ways of living, new ways of coexisting, new innovative balances, as well as new ways of consumption. The forecasts point towards businesses adapting their models and combining the traditional one with the disruptive one, in each of its components, to offer specific responses to other challenges that can appear in the future.
If your business is in this situation, don’t forget the 3 steps to follow: React, recover, and adapt. React to sudden changes, recover from any hit you’ve taken and adapt your business with the Business Model Canvas to ensure fast recovery and quick action! The most important part is to always listen to your customers’ needs and wants, and give them something valuable that they really appreciate. That’s the key to keep customers going back to your business. Change is something good and sometimes needed. It might be disruptive at first, but as time passes by, that change will become the new normal, and a new disruption will probably take place again and your company will need to re-adapt once more.
If you need assistance to adapt your business model to a digital landscape through this pandemic, MRKT360 is here to help! Offering the best SEO solutions and digital marketing services, we ensure our experts are the best guides that can seamlessly create the best strategies so you meet your business objectives through digital practices. Contact us today!