Elements of Sustainable Business Models


03 Oct 2016 26 Sep 2017

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The title of the journal is Elements of Sustainable Business Models which was written by Talonen, Tapani, Hakkarainen and Kari for the research conducted by Kone Corporation and Virike Consulting, Finland. They had conducted a study about the elements contributing a beneficial business model. This research aimed to provide the detailed explanations regarding the complex aspects of business models and the actions or methods required to handle them. The study reveals the failures of some companies such as Kodak and Nokia to plan and implement the effective business models which causes their operations to face big problems and lose in the highly competitive business world. The investigation of the reasons of the failure in planning or implementing business models and the ways to overcome them is very important so that the current and future generation of the corporate leaders or managers can be aware of those issues and raise the possibility for them to implement successful business models.

The technical product supremacy in the business world of nowadays is no longer enough. Customer experience became the most critical differentiator in the highly competitive business world. This incident made the business competition transforming rapidly from competition of various products to competition of business models. Innovation is playing an important role in business competition. It is not necessarily must be derived through an invention. The technological changes in the production of existing goods, the discovering of the new markets and supply sources, work tailorization and new organizational structure are various innovations that contribute technological advancement. Most of the efforts to replace the technologies will fail in innovation. Value is shifting from products to solutions to experiences nowadays. The products nowadays must meet an expectation or need in order to create great customer experiences. There is no any individual idea or factor that can ensure the winning in the competition, it requires various elements such as enabling and supporting elements that combined together to create the winning edge. Business model is important because it decides how a company going to approach customers. Adjusting the approach based on the market conditions is not enough because the competitors can do the same thing too. A company needs a wider mindset to make itself extraordinary. A series of continual discussions need to be held between the business and technological experts to come out with a strategic plan which will then be further involves in the planning at tactical level and operational level. The key factor of tactical level is fast decision making in the forever changing business environment. A flexible business model is always better than those rigid funneling and long-span models.

In order to enable the success of an innovation for the products, the company needs to ensure people to trust that it is not about something temporary only and the company will make a long term commitment to provide services or helps that might needed for those new products. Many companies would like to rely on their current products in the market rather than continue to make more innovations due to reluctance which is caused by mindset, misleading signals and the illusion of progress. Mindset is the biggest barrier among these three factors, it is often caused by the preoccupied thoughts or offensive satisfaction of a company’s leader about the company itself, behavior of avoiding losses and sunk cost dilemma where people tends to do something which is wrong or not worth it after spent so much on it. Besides that, all the company managers or leaders need to know clearly and accept that no matter how brilliant they had done in their plans and implementations of the business models they might still have high possibility to fail at the end. They need to follow all the disciplines required but at the same time still remain agile and flexible to lower the possibility of failure. As long as they had done all the essential early preparations, failure would not become a disaster for their company. Strategic resilience is what a company needs in order to be successful where company will change according to the conditions of business ecosystem and competitions before it is too late. In order to be resilient, the company needs to get ready for cognitive, strategic, political and ideological challenges. The company leaders should also be aware that workers are still the crucial assets since the system do not do thinking.

The title of the journal which is Elements of Sustainable Business Models is not really appropriate since the journal is all about both of the elements and complex barriers for sustainable business models. Our group feels that most of the information given in the journal is believable since the authors had supported it with so many real examples as strong evidences. The authors had made great efforts to help the readers to know and understand about more details regarding business models by inserting many figures and tables into the journal. However, we had found that the figure 2 inside the journal might leads to misunderstanding or confusing of the readers on the first sight because it did not been clearly labelled to show what is the meaning of the size or length of each arrow in the figure. The authors also had been using some words which are not commonly seen such as ‘tailorization’ and ‘tenet’ which might not be understood by many readers.

There is a very interesting point inside the journal where the authors state that losses have much larger psychological effect than the same amount of gains on people. We feel that it is really interesting because many businessmen would not notice about that and lower down their fighting spirit when they won in a highly competitive business war. Inversely, if they had lost in a competition they would feel threatened and force themselves to work harder to boost their performance. Besides that, we are strongly agreed with the point of the sunk cost dilemma mentioned by the author inside the journal where people cannot abandon something that they had put so much effort into it. It revealed the real and commonly seen human nature of businessmen where they will normally make mistake by acting emotionally instead of rationally to terminate some projects that would not benefits the company since it had been long running halfway. However, we are disagreed with the statement where the authors says that those companies already facing problem are better off since they are forced to renew because it does not match with the statement of the authors saying that businessmen should be resilient to morph itself before it is forced by a performance crisis. We feel that the companies that only take action after started to face big problems normally would not be succeed because it would most probably always been too late to take any action at that time. There would be only very few companies that might lucky enough to succeed in reality especially in the highly competitive business world of today.

As a conclusion, a business model that able to create extraordinary customer experiences is the main key element of winning in the cruel business war of today. Unluckily, every business model has a limited life span and also a surprisingly high risk to be failed in implementing it which somehow might still can be succeed with careful planning and correct timing. The journal can be considered as an excellent journal which might able to influence many readers with plenty of powerful explanations and evidences if all the weaknesses that had been pointed out by us can be modified correctly. The authors may change the title of the journal as ‘Elements and Barriers of Sustainable Business Models’ instead of the earlier one because it is more suitable with the major contents in the journal. On the other hand, the authors should also clearly label in the figure that the length of the each arrow in Figure 2 represents the correct timing of action or process that had been written under it so that the readers can easily understand the figure on the first sight. The authors should also replace those words in the journal which are not commonly seen by most of the readers with some simpler words. For an example, the authors can replace the word ‘tenet’ as ‘principle’ or ‘opinion’.


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