Changing business model - BMI innovation

New ideas create better quality of life and wealth

Rizal Philippines
December 18, 2017

Last Saturday, I was discussing with an Engineer, a mechanical engineer, who heads the sales group in Northern and central Luzon (they are engaged in sales of systems concerning refrigeration).  He said that it is no longer a question of doing things right but thinking outside the box.  Of being creative and disruptive.   Of going beyond the process.

They had a problem with the customer who disliked  what they were doing.  And this stemmed from lack of understanding what the customer wanted (QFD tool would have solved this; prevented)

A company can not grow using the methods and strategy of what they were doing successfully before;   Customer wants and needs change.  Business dynamics change.

Some examples

1.  A food company would like to grow using only the manufactured here only mindset.  But a leading food company grows by outsourcing, ie pooling together food producers, marketing their products with theirs using their brand;

    You have to innovate the competitors perception but instead make them your partners

2.  A condo maker, confronted with growing inventories of unsold units, rents out unsold units with option to buy, to those who cant afford the hefty d/p, monthly but who can pay market rates for lodging purposes;




3.  Car dealers do not make much money on car sold.  But make money on:
      1.  Insurance (up to 40% margin)
      2.  Repairs
      3.  Parts

      They need to sell you the car to have the more lucrative business from you.

4.  You do not sell discrete products anymore but a system, a solution

5.  The transportation industry innovated by not making better vehicles but making access (link easier) using apps, and saving waiting time on the part of the partners by having them near those who need the service. Or having alternative mode as angkas, or even habal habal

6.  The classified ads died the natural death when free on line display ads:  OLK came out. 

7.  The closure of many warehouse of what used to be a great soft drinks company indicate the change in drinks preference of people.   Water, fruit juice and other healthy drinks.   We cant stick what we used to love and our great heritage

8.  In our business it is no longer the real estate side that will carry us to the next decade but services, and prepaid.  The methodology of selling prepaid has been used by us with great success.

9.  CAS used to be a leading problem solving tool for accounting of many firms, or integrated system.  We bought one.  But when bugs start infecting the software, you need a team of IT experts to up the system.  So many get quick books or proforma template, and use Axxess and xls to manage their files and data base.  And discard their CAS

10.  We have seen the strategy of MA of many companies.  We used to think this to be unsportsmanlike and denotes lack of creativity and innovation.  But purchase of on line store like Zalora by a large mall operator speak well of strategic direction being pursued by company to be in the retail business.