Strategy Change and Innovation: Business Model Analysis Report

This report provides an in-depth analysis of strategy change and innovation, focusing on the evolution of business models over the past two decades. It begins by defining strategy and its role in relating organizational goals to the means of achieving them, contrasting proactive and reactive approaches. The report then critiques the traditional approach to strategy formulation, highlighting its limitations in today's dynamic environment, particularly its inflexibility and reliance on static assumptions. The discussion transitions to the concept of business models, explaining how they depict value creation, delivery, and capture. Demand-side strategies and business analysis models, such as SWOT, PESTLE, and Porter's Five Forces, are explored to illustrate how businesses understand customer needs and market dynamics. The report concludes by examining recent approaches to strategy formulation, emphasizing the importance of adapting to market changes and the limitations of traditional methods. The document provides a comprehensive overview of the subject, including its evolution and future implications.

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STRATEGY CHANGE AND INNOVATION
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Strategy......................................................................................................................................2
Traditional approach to strategy formulation:............................................................................3
Business model...........................................................................................................................5
Demand-Side Strategy and Business Model..............................................................................7
Recent Approaches to Strategy formulation using Business Model........................................10
Conclusion................................................................................................................................11
Reference..................................................................................................................................12

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Introduction
The field of Strategy has developed considerably in the previous two decades. Firms
have learned to investigate the environment, that is characterised by competition, position,
gaining advantage, and comprehending threats in the competitive environment to sustain and
analyse opportunities to gain an advantage. Various methodologies including mechanical
association, dynamic abilities, and game hypothesis have helped academicians and
professionals to understand the elements of competition and create suggestions on how a firm
must to portray their serious and corporate methodologies. Nevertheless, drivers, for instance,
globalization, deregulation, or innovative change, just to specify a few, are drastically
changing the serious game. Hence this report will focus on an in-depth investigation,
examining in detail the growth and importance of business model that has taken in the past
two decades due to traditional strategic approach.
Discussion
Strategy
A contingency plan as to which the business model is required to be used is known as
strategy. The word ‘contingency’ is a vital term, since it refers to the provisions contained in
the strategy regarding the action to be taken even if the contingency planned might end up not
taking place. Strategy seeks to relate the goals of the organisation to the means of attaining
them. It is a game plan management use to take market position, conduct its operations,
appeal and satisfy its customer and strive successfully. The term strategy is a long-term
blueprint of the organisation’s anticipated image, focus and destination of what it wants to be.
It is considered to be consciously and is designed flexibly so as to achieve effectiveness,
mobilise resources, handle events and problems and meet the challenges and threats
(Hickman and Michael 2018). The strategy formulation process is concerned with developing

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a corporate’s mission, vision, objectives and policies. The strategy of the management is
partly pro-active and partly reactive (Gregory 2015).
 Strategy is pro-active since it requires pro-active actions to be taken on the part of the
managers to enhance the company’s market and financial position
 Strategy is re-active since a reaction is almost certain to the strategy due to
unanticipated development and fresh market conditions.
Strategic management, on the other hand, is defined as a method of evaluating, planning
and implementing designs which will help in maintaining and improving competitive lead.
Strategic management provides an overall strategic management needs to be extended to all
the departments in the business
Traditional approach to strategy formulation:
The management strategy and practice generally acknowledge today that
organizations works in an increasingly unpredictable, dynamic, and surprising condition. This
circumstance expects administrators to develop better approach for thinking and acting. In
any case, numerous managers despite everything, follows the old methodology of strategic
positioning and planning.
The customary methodology process as portrayed right now advanced during the
twentieth century. Ideas like positioning, investigation, vital choices, portfolio, and more
were created as a reaction to the growing multi-layered nature of the developing post-war
economy. Rivalry expanded and worldwide interdependencies heightened. Right now,
required more refined strategy apparatuses than their antecedents, which were a lot littler and
all the more privately arranged.
The assumption of the traditional approach were as follows:

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 This model accepts a justifiable, genuinely steady, and unsurprising condition. Albeit
outside investigation incorporates some pondering conceivable future advancements,
these are principally founded on an extrapolation of the present.
 The conventional approach to the strategic management provides an orderly and
precise way to deal with dynamic in the vital making process, however the approach
is less flexible.
The traditional approach to strategy formulation is an ineffective approach for the
organisation in the present scenario, as there as several limitation in this approach of strategy
formulation (Karadag, 2015):
 The procedure and the related apparatuses remain unaware of the pace of progress
in the business condition. They will prompt slacking results.
 Strategists are enticed to shrink their focus, because of the expanding increasing
uncertainty. The focus remains in the internal analysis and the near-term future.
 Strategies coming about because of this procedure are constantly founded on the
present circumstance and restricted to thinkable fates.
 The developing number of viable future situations makes it a lottery to choose for
a methodology that fits one specific future.
 The vital plans might be unreasonably rigid for the present pace of change.
 Strategies are based on restricted and on pre-decided corporate vision, mission and
objectives.
 This approach does not consider the concept of time value of money while
determining strategies.
The present most evident downside of the conventional procedure process is that it
was intended for a steady and unsurprising condition – which most organizations don't have

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any more. It is sick prepared for industry interruptions, the deconstruction of significant
worth chains, the ascent of totally new plans of action, and different changes in the business
condition. This new circumstance has become known as VUCA – Volatility, Uncertainty,
Complexity, and Ambiguity.
Strategic management is defined as a method of evaluating, planning and
implementing designs which will help in maintaining and improving competitive lead (Noe et
al. 2015). Strategic management provides an overall strategic management needs to be
extended to all the departments in the business
Business model
The articulation "strategic business model" basically means a company emphasizing
strategic planning in starting and developing operations. It is huge for entrepreneurs or
business visionaries to create business strategies that plot how they mean to accomplish goals
(Aagaard 2016). In general, the method of doing business by a company top generate revenue
is known as business model. A business model depicts the method of reasoning of how an
association makes, delivers, and captures value, in financial, social, economic or different
settings.
In principle and practice, the term business model is utilized for a broad range of
formal and informal description representing core aspects of the business, including reason,
business process, target clients, offerings, strategy, infrastructures, sourcing, exchanging
practices, and operational procedures and policies including society and cultures.

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To choose an appropriate business-level strategy, a firm must first portray its business
model. A serious factor of a business model is the company’s explanation of customer needs,
which defines “what” is being fulfilled. Customer needs are requirements that can be satisfied
by qualities of a product. The company develops a business models considering the market
condition customers requirement and the motive of the company, which is to maximize profit
in most of the cases (Kortmann, Sebastian, and Frank 2016). Strategy is thereafter developed
considering the mission, vision and value statement of the company.
There are numerous potential possibilities of contingencies whereupon strategies might be
based. One such source is the acknowledgment of an occasion outside the control of the firm.
For instance, one possibility that numerous organizations are right now considering is the

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chance of a recovery from the downturn. Firms have designs with respect to how their plans
of action must be changed in case of a strong economic recovery (changes in approaches,
resources, as well as administration). Such plans are a piece of the organizations' procedures.
Note that by watching the present plan of action of a firm we don't have the foggiest idea how
that plan of action will be changed (as endorsed by the company's procedure) if the economy
recoups. All that is observed is the present plan of action, which is the thing that the firm’s
strategy endorses for the present condition of the economy. Accordingly, the business plan
and strategies does not coincide in this case.
Demand-Side Strategy and Business Model
The business model performs two vital functions i.e. it creates value and captures value. It
creates value by defining a series of activities from raw material to finished goods, which is
sold to consumer and the value is created continuously till this operation continuous (Clinton

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and Whisnant 2019). It captures value by establishing a unique resource such as asset from
processing the series of activities. To create, capture and deliver the value it is necessary for
the business to analyse, brainstorm, create, deliver and evaluate (Priem et al. 2018).
 Analysing the customer is important, understanding their needs and type of product
required, analysing the cost and the selling price prevailing in the market.
 By brainstorming understanding the needs by doing assessment, taking market
surveys, ask frequent questions, analyse and inter-connect different needs obtained
from the surveys.
 Creating refers to the process of producing goods that was based upon the needs
derived from the survey. Various factors of production play their respective roles
under the creation process. The first product derived is considered as a testing product
and hence the firm should not panic if does not get successful.
 Deliver refers to the process of delivering the goods prepared.
 After the delivery process, evaluation of the value delivered takes place. Based upon
the response of the product deliver, necessary modification and alternatives is
considered.
Business analysis models are valuable tools and techniques that can assist you with
understanding your hierarchical condition and ponder your business. Many generic
techniques are accessible; however, some go to the forefront as often as possible than others
do (Burns 2016). These models include SWOT analysis, PESTLE analysis and Porter’s five
Forces framework (Perera 2017). The SWOT analysis provides better insight into the
company’s internal and external environment of the business. When making strategic plans
and decision, better use of the SWOT framework can be made if consideration is made from
the customer’s perspective. This analysis also helps in analysing threats as well as
opportunities available to the company.

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The Pest analysis refers to a deeper approach into the marketing environment
involving factors related to political, economic, social, and technological environment.
PESTLE examination is a definite perspective on the condition a business is arranged in
(Sammut‐Bonnici and Galea 2015). It very well may be properly called an elevated view
where an organization or an individual attempt to learn explicit patterns of the market from a
macroeconomic point of view.
Porter’s Five Forces
Porter's Five Forces is a business investigation model that assists with clarifying why
diverse ventures can continue several degrees of benefit. The Five Forces model is generally
used to break the structure of the business of an organization just as its corporate system. The
five powers are every now and again operated to measure rivalry force, appeal, and advantage
of an industry or market. The five forces are:
 Prevailing competition in the industry,

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 Potential of new entrants in the industry,
 Power of Customer,
 Power of suppliers, and
 Threats of the substitute products.
The business models thus address the limitation associated with the traditional
approach that does not considers the time value of money, various market strategy analysis,
flexible strategy that can be change with the change in the pace of the market (Weller, Kleer
and Pillar 2015). The traditional approach towards strategy is based on some past results and
research while the business models considers the requirements and demand by putting their
feet in the customer shoes.
Recent Approaches to Strategy formulation using Business Model
The latest audit of demand side research - concentrating on innovation and
technological advancement, business enterprise and strategic management provided by
(Priem et al. 2012). Their survey featured various articles from the demand side that delivered
what earlier would have been viewed as illogical discoveries, for instance, demonstrated that
when the customers of a prevailing occupant are themselves heterogeneous regarding their
end customers' needs, the predominant officeholder need not follow the typical procedure of
reacting to a disruptor's development in kind (Adner, Ron and Snow 2010). Rather, the best
procedure might be to spend significant time in giving and improving the current, less-
advanced technology to a smaller set of customers when purchaser heterogeneity
demonstrates that the advancement's key advantages are pointless or unreasonably exorbitant
for a huge enough buyer portion. Ye et al's. (2012) work centered around request side
cooperative energies accessible through enhancements that serve a similar customer. The key
element of their examination is that economical upper hand can be gotten for focused shopper

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sections through multi-item, request side cooperative energies, in any event, when the assets
utilized are broadly accessible.
Conclusion
The report concludes with some vital information that a firm should incorporate while
making or formulating strategies. The report also highlights the limitations of using
traditional strategies in the present scenario since various analysis has been evolved by
around the last two decades which are not applied in the traditional approach of strategy
formulation. In outline, the conventional ways to deal with strategic management provides an
organized and efficient way to deal with dynamic in the key making process. These
methodologies despite everything establish, constitutes a fundamental key and feasible
framework; be that as it may, it isn't adequate alone for the productivity of a firm (Hitomi
2017). Traditional strategic approaches ought to be fused in the base model to make it
progressively enterprising and adaptable
The associations ought to adopt and align the traditional strategy, for example,
internal and external examination with the real-time technique to ensure continuity and
learning. The administration should look for the most ideal method of combination,
customisation and equalization of components from both the methodologies for survival and
sustainability right now. As opposed to utilizing the methodologies exclusively and in
separation, they should supplement each other so as to deal with the complexities of the
business and still prevail over the evolving conditions.