Yalumba's Success Through Business Model Innovation: A Case Study

This case study examines Yalumba, an Australian winery, and its successful implementation of business model innovation. It identifies the manufacturer business model as a key component of Yalumba's strategy, highlighting aspects such as targeted customer identification, strong value proposition development, and the creation of demand generation strategies. The analysis delves into critical decisions, including the adoption of a high solid cross-flow filter system and embracing change, which enabled Yalumba to thrive in the competitive wine industry. Furthermore, the study discusses the innovative aspects of the chosen business model, such as technology integration and enhanced marketing processes, and references sources that reflect the importance of business model innovation to Yalumba's sustained success, emphasizing its role in business differentiation, answering critical market questions, improving technology, and shaping the firm's culture.

Business Model Innovation
Business Model Innovation
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Business Model Innovation
Introduction.
Generally, business model innovation describes the change of existing models in a
company or formation of new models that target to satisfy the needs of customers in market.
These models tend to be unique and different from the existing models in business (Zott &
Amit, 2010).This discussion analyses the case study in Yalumba Company. It is a winery
company that is found near Angaston in South of Australia. The founder of Yalumba was a
British brewer called Samuel Smith. The company has been successful by using the business
innovation model in different ways. It is through its determination in targeting different
segments in market.Yalumba works closely with all relevant business model such as
manufactures, retailers and distributors. Also, when new strategies are needed the company
tries -design prototype test which includes trial and error method in market when launching
its products (Zott & Amit, 2010).Therefore, the write up will analyze those business model
innovation concepts used by Yalumba, analyzing critical procedures used by the company to
persue in market and lastly analyzing the importance of business innovation model to
Yalumba.
1. Business model that was adopted by Yalumba Company.
Yalumba opts to adopt for the sale of its products to its customers so as to ensure
maximum satisfaction of their needs (Wei, Yang, Sun, GU, 2014).Some of the most common
business models used by Yalumba company are; manufacturer, distributor, retail and the
franchise model.
Yalumba majorly uses manufacturer business model.Yalumba is a wine making industry, it
specializes in the conversion of grapes into a final product that is wine. It is well known that a

Business Model Innovation
manufacturer uses raw materials and converts them into final products. In the same way this
business model applies to organizations that specializes in conversion of raw materials into
end products (Bocken, Short, Rana, Evans, 2014).
2. Aspects of design process to success of Yalumba firm.
There are some certain aspects of design process that can be considered to be the key
to success of Yalumba.Yalumba uses manufacturer business model, and from this fact alone
then there are a number of reasons and also tangible evidence that can be seen that has
resulted to the success of Yalumba over time (Cavalcante, Kesting, Ulhøi, 2011).There are
specific aspects about this manufacturing model that Yaumba is using that can be tagged to
its success, these aspects are explained below;
Manufacturing model has the unique ability of identifying specific target, for our case
specific customers. It is always advisable that before one decides to choose a business model
then they should consider the specificity of that model in regard to the customers it targets. A
model that is not specific will tend to have problems in identifying the customers who
genuinely need the product (DaSilva & Trkman, 2014).A specific model on the other hand
narrows down to specific audience, it tends to get to know the customers and their needs in
particular thus creating a chance to tailor and improve the products/services according to the
customers preferences. Yalumba has been successful over time because the manufacturer
model it adopted puts into consideration the very crucial aspects regarding its customers as
mentioned above (Sosna, Trevinyo-Rodríguez, Velamuri, 2010).
Developing a strong value proposition is also another means of enabling/facilitating a firm’s
success in regard to the business model adopted (Schneider & Spieth, 2013).Competition is

Business Model Innovation
inevitable. It should therefore be the effort of all companies in a particular industry to
struggle for the top stop be in a position to be significantly distinguished from the rest of its
kind. Well, the business model adopted plays a very great role in this, there is a very vital
question that one should ask themselves, does this business model provide/accommodate any
means of innovation? A model that takes care of future innovative capabilities is very flexible
and should be considered. Yalumba company uses manufacturer business model which
carries with it a very great range of innovation capabilities, with this Yalumba has been in a
position to standout despite the very intense competition and this has made it so successful
over time (Storbacka, 2011).
Finally, the business model adopted should at some point be in a position to determine they
key business partners in the industry and also create a demand generation strategy. Literally,
no business can survive leave alone becoming successful on its own. There is need to have
some partners or maybe allies that will be working together with the company to facilitate its
success. The business model to be adopted should also consider this very significant aspect.
Creating a demand generation strategy is also another extremely important aspect for the
success of a company (Lehoux, Daudelin, Williams-Jones, Denis, Longo, 2014).The model to
be adopted should therefore be in a position to create a demand generation strategy in that it
even before the company is launched, means of how the customers are to find you should be
well elaborated and what the customers should do and the specific steps they should take
once they have become aware of your brand. Yalumba uses manufacturer business model, it
is a model that incorporates all these two very important aspects and this is one of the reason
why it has been successful over time.

Business Model Innovation
3. Key issues and decisions/actions enabled Yalumba to become a successful enterprise.
There are key decisions and actions that Yalumba company took to become a
successful enterprise in the industry, the most important action, however, was the adoption of
a high solid cross flow filter system that was installed at Angaston and Oxford landing
wineries. Yalumba Company had spent decades trying to find better and appropriate options
for its wine making processes, the adoption of cross flow filter system came as a
breakthrough after many years of labour and struggle. It initially used Rotary Drum Vacuum
filters like most wine companies around (Gambardella & McGahan, 2010).
Other alternative solid mesh filters were available but had not yet been properly looked at and
put into test and it was uncertain if indeed they can be used and deliver successful results in
the wine industry. Yalumba Company took the initiative of carrying out various uncountable
tests and trials and with the quality of its human resource, a breakthrough was found. This
method was adopted and this has been known to be one of the reasons why Yalumba
Company has been so successful. This was a decision that was made and the appropriate
action taken to make it happen.
Yalumba’s head of winemaking, Louisa Rose says that something is always changing and for
any business to be successful then it must by all means try to embrace the change and be part
of the change. Yalumba is a 165 year old business and since it was started then it is evident
that various changes have been taking place, an attempt of Yalumba Company to embrace
this change has been the key to its continued success (Gambardella & McGahan, 2010).

Business Model Innovation
For instance, the finding and knowing about of rootstock was a major change that took place
in Yalumba Company and it came with it numerous advantages. It was a technique that
played a very crucial role in the ripening. Other issues such as climate change came into
place, but with this technique it was certain that the vineyards could not be affected. It is
known to be one of the major reasons that put Yalumba Company in the map for decades and
made it the leading producer of wine in the industry (Walravens, 2012).
4. What is innovative about the chosen business model?
The chosen business model by Yalumba Company is manufacturer business model,
this model is considered to be very flexible and elastic. A number of innovations can be
incorporated in it and make it even much better. Some of the innovative aspects about
manufacturer business model are explained below;
The first innovative aspect about manufacture business model is technology. Well,
technology is a broad term, but in this context it has been used to imply to all the necessary
changes and advancements that take place in the manufacturing sector. Each and every day,
new pieces of technology are being designed and created (Johnson, 2010).Basically,
manufacturing sector is characterized by continuous advancements in technology and so on.
The customer model assisted Yalumba through marketing process .There is increased online
marketing which correspond to the digital marketing. This has been enhanced through
business innovation. The company advertises in new platforms such as online websites.Ths
innovation helps the business to reach large number of customers in the market and thus
enhancing the production output.
5. Sources reflecting importance of business model to Yalumba firm.

Business Model Innovation
Different articles and other resources in business describes the key steps incurred
when Yalumba is conforming to manufacturing business model. As discussed above on how
Yalumba can use manufacturing model ,there are other strategies which can only be
achieved through the business innovation model (Björkdahl & Holmén, 2013).The following
sources have relevant concepts of business innovation model .These sources in business
includes;
 Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT
Sloan Management Review, 53(3), 41-49.
 DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is
not. Long range planning, 47(6), 379-389.
 Jeston, J. (2014). Business process management. Routledge.
 Sorescu, A., Frambach, R. T., Singh, J., Rangaswamy, A., & Bridges, C. (2011).
Innovations in retail business models. Journal of retailing, 87, S3-S16.
Importance of business model innovation to Yalumba.
Business differentiation helps to protect the margins of different companies in market.
Therefore, innovation model is the key factor that will enable Yalumba to curb competition in
market, help the company to enjoy profits as well as enabling it to emerge as dominant in
market (Björkdahl & Holmén, 2013).This is to mean that the model reduces the level of
competition since each company utilizes its own technique when designing products.
Also, the manufacturing model innovation helps to answer critical questions in Yalumba
firm. Helps to answer questions such who is the target market in business. How will the
business satisfy the needs of the customers in the market? These are some of the important

Business Model Innovation
questions which the model analyses. Yalumba then tries to come up with apt solutions that
describes the questions appropriately. The company analyses the market by designing and
innovating new methods that will facilitate production of new products with new features
appealing to customers in the market.
It helps in identifying the business scope in market (Wirtz, Pistoia, Ullrich, Göttel, 2016).This
shows that the model will describe Yalumba area of operation. This includes considering the
business environment. The concept will analyse the external and internal environment
comprised by Yalumba firm. The model checks on the effects these environmental factors
have to the company and then innovate new strategies that will target to give corrective
measures of every factor evaluated in the company.
Business model helps in improving technology. Yalumba firm needs to solve huge problems
that may be incurred during the operations (Wirtz, Pistoia, Ullrich, Göttel, 2016).Through
handling the challenges Yalumba firm will be innovating new strategies that conforms to the
challenges and therefore increasing the level of technology.
Also business model execution assists in designing the culture of the firm. These comprises
those strategies Yalumba will use to achieve the core values .The whole process of
developing a new culture imparts on increasing the design of work in the company. Through
the business culture the model will embrace new changes which will be transformative.
Therefore, the models are unique, relevant to the goals of the organization and they are
always aligned to the trends that are anticipated in the market. They establish new growth
strategies that helps in accessing huge profits from the sale of products in Yalumba
Company.

Business Model Innovation
Conclusion.
In conclusion, manufacturing business innovation model is important for Yalumba
survival in the market. The model need to be complete and consistent (Jansen, 2017).
Yalumba should ensure that all aspect of model are keenly addressed to enhance
completeness. The model enhances clarity in business .This means that all workers in
Yalumba Company should work to familiarize with key strategies of business model.
Business innovation model focuses to discuss the misunderstandings and disagreements that
may be incurred within the business. It communicates about the importance of different
entities such as advisers, new recruits and investors in Yalumba firm (Jansen,
2017).Therefore, through the business model innovation Yalumba Company will be in
position to emulate those critical strategies and measures which will lead to success in the
market.

Business Model Innovation
References.
Björkdahl, J., & Holmén, M. (2013). Business model innovation–the challenges
ahead. International Journal of Product Development, 18(3/4), 213-225.
Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to
develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.
Cavalcante, S., Kesting, P., & Ulhøi, J. (2011). Business model dynamics and innovation:(re)
establishing the missing linkages. Management decision, 49(8), 1327-1342.
DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long
range planning, 47(6), 379-389.
Gambardella, A., & McGahan, A. M. (2010). Business-model innovation: General purpose
technologies and their implications for industry structure. Long range planning, 43(2-3),
262-271.
Jansen, W. (2017). New business models for the knowledge economy. Routledge.
Johnson, M. W. (2010). Seizing the white space: Business model innovation for growth and
renewal. Harvard Business Press.

Business Model Innovation
Lehoux, P., Daudelin, G., Williams-Jones, B., Denis, J. L., & Longo, C. (2014). How do
business model and health technology design influence each other? Insights from a
longitudinal case study of three academic spin-offs. Research Policy, 43(6), 1025-1038.
Schneider, S., & Spieth, P. (2013). Business model innovation: Towards an integrated future
research agenda. International Journal of Innovation Management, 17(01), 1340001.
Sosna, M., Trevinyo-Rodríguez, R. N., & Velamuri, S. R. (2010). Business model innovation
through trial-and-error learning: The Naturhouse case. Long range planning, 43(2-3), 383-
407.
Storbacka, K. (2011). A solution business model: Capabilities and management practices for
integrated solutions. Industrial Marketing Management, 40(5), 699-711.
Walravens, N. (2012). Mobile business and the smart city: Developing a business model
framework to include public design parameters for mobile city services. Journal of
theoretical and applied electronic commerce research, 7(3), 121-135.
Wei, Z., Yang, D., Sun, B., & Gu, M. (2014). The fit between technological innovation and
business model design for firm growth: evidence from C hina. R&D Management, 44(3),
288-305.
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin,
development and future research perspectives. Long range planning, 49(1), 36-54.
Zott, C., & Amit, R. (2010). Business model design: an activity system perspective. Long
range planning, 43(2-3), 216-226.

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Zott, C., Amit, R., & Massa, L. (2011). The business model: recent developments and future
research. Journal of management, 37(4), 1019-1042.