Digital business models: Which of these 3 models suits your company?

Nowadays, technology is developing at an enormous pace. This opens up new opportunities for companies to design and optimize their business processes. The technical term for this digital change is digital transformation.

With a forward-looking digital strategy, a company positions itself on the market and sets the right course for a successful future. Digital business models support the process and make the company's vision tangible in 10, 20 or even 30 years' time.

Definition of digital business models

Experts differ in their definitions of digital business models. Christian Hofmeister, Managing Director of the DCI Institute, focuses much more on the systems and the repetitive transaction as a component of the business model.

Prof. Dr. Gassmann from the University of St. Gallen sees the main feature of a digital business model as an internet-based value proposition based on intelligent value chains.

We see the following in this term:

Digital business models are future-oriented business models that are based on technology, digitally optimize processes and enable new types of monetization through innovation.

3 business models for growth in your company

In the following, we will give you an overview of 3 strategies that can be used as a future direction for growth, depending on the industry and company orientation.

Scale model

The focus of this business model is on reducing production costs. It is assumed that the market leader can produce at the lowest cost due to its volumes. This is achieved through digital process optimization in the area of production.

Robots with artificial intelligence will be able to carry out standardized work more accurately and quickly in the future. In the long term, this will result in a reduction in costs, which will have an impact on the unit price.

Examples of this include:

Amazon AWS
Dropbox

Platform model

A digital platform simplifies the interaction between the players involved in a business process. The mediation between interested parties and offers is revolutionized with technology. This also enables the management of large user groups and reduces both the transaction costs of those searching and the marketing costs of providers.

There are already many examples. The best known are

Airbnb
Uber
Facebook
Google

But platforms are also becoming increasingly important in the B2B segment.

Who delivers what?
Construction practice
Machine market

Innovation model

This business model focuses on the invention or development of a new digital product. This can be individual software or an outstanding app, the use of which creates a clear competitive advantage. This sets you apart from the market or creates a USP that makes your company the market leader.

Examples include various software as a service companies that have positioned themselves on the market with their product.

FastBill
PayPal

Conclusion: Which digital business model is right for you?

You have now learned about three ways in which you can implement digital transformation in your company. All three - the scale model, platform model and innovation model - can be adapted to your company. However, it is important to check whether the digital business models can also be individually adapted to your industry, product or service, company size and current situation.

At new direction GmbH, we implement these and similar solutions quickly and reliably. If you have any questions or specific concerns, please feel free to contact us directly.