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A business model is the actual representation of the business which presents the different configurations of a business- financial, architectural and co-operational. The key dimensions of the business model include the ownership, value proposition and value network (Amit & Zott, 2012). In this disruptive age, the established business models are constantly attacked. The major causes of the business model disruption are rapid globalization and the advancement of the technology. This allows the introduction of the new business models at an increasing rate and also with less cost than before. The economic, technological, political, cultural and social environment of an organization forces the disruption process to take place at a rapid rate. It is often attributed to the change process in an organization.
The practical implication of the business model disruption is presented by Google by the adoption of the free model (Sako, 2012). This model acted as a disruption for the current pay-for-service model. The free model aims to give free services coupled with other goods. The users can access the services of the company without spending (Sako, 2012). This is done by the company so that it attracts the attention of the users and can gather crucial customer data. The offering of the free services also provides competitive advantage to the company. The “no-fee” model acts as a disruptive tool to the competitors such as Microsoft and Apple. It is also a profitable option and helps the company to increase its revenues. The existing business performance of the company was significantly enhanced by the “cost free model” which gave it better visibility and profitability.
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41.
Sako, M. (2012). Business models for strategy and innovation.Communications of the ACM, 55(7), 22-24.
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