The Impact of Digital Transformation on Business Models

Digital transformation in business involves using new technologies like artificial intelligence and cloud computing to drive growth, streamline operations and increase competitive edge. Its impact can be seen across every industry, driven by the growth in online business and the ongoing digitisation of business and society.

It has also fundamentally affected many traditional business models. These have evolved rapidly thanks to the emergence of online giants like Amazon and Google, digitally native niche players like Airbnb, Expedia and Netflix, and heavy investment by established industry leaders such as Walmart and Tesco.

Companies like these and thousands of others have taken established business models and integrated technology in ways that drive innovation and create new types of customer experience focused on convenience, value and efficiency. At the same time, new digitally native business models have emerged, such as freemium and software-as-a-service. This article focuses on the ways that “traditional” business models have evolved, and new models have emerged, creating new opportunities but giving rise to new challenges.

What Is A Business Model?

A simple explanation is that a business model is the strategic framework implemented by a company in order to generate value through the delivery of its products and services. Businesses thrive by creating new and unique business models or refining existing ones to create revenue streams, develop efficient operations and build relationships with their customers.

For example, manufacturing businesses create products from raw materials, distribute them to retailers and customers and generate revenue from sales. The model includes steps taken to drive efficiency throughout the manufacturing and distribution operations and create demand for its products through marketing.

By leveraging emerging technologies, businesses can refine elements of the model to increase the amount of value generated, reduce costs incurred by operations and processes and even create new products and services more aligned with the changing needs of their customers. Read the full article at Forbes.