Summary
Storbacka (2011) has developed a business model framework which works to assist in the design of business models through the process of categorizing the capabilities and management practices that are needed in order for the business model itself to be a functional one. It consists of four distinct phases, including developing solutions, creating a demand, selling the solution, and delivering the solution, and three different groups of cross-functionality issues, including commercialization, industrialization, and a solution platform (Storbacka, 2011). Storbacka (2011) stresses that in order for a business model to be an effective solution for a business, it requires the coordination of resources and business processes across all different functions of the model itself.
The area of customer solutions is one of the areas that businesses are attempting to use in order to differentiate themselves from their competitors. Tuli, Kholi, & Bharadwaj (2007) have performed a study, gathering information from more than 100 different managers, in order to be able to first determine how customer solutions are seen from a managerial point of view, and gathered information from customers to determine how they see customer solutions. They have presented both sets of views in order for a manager, or a business, to see how each side views both processes, so that a business may determine the most effective method of providing customer solutions that works to meet the needs of all parties (Tuli, Kholi, & Bharadwaj, 2007). They are careful to caution, however, that the effectiveness of customer solutions will be determined by both the business itself, the way that it is setup, the way that it is run, and the type of consumer for the product or service that is being offered by the corporation. The variables between the different customer bases, especially, will play a key role in this concept.
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Reflections
Storbacka (2011) has made leaps and bounds in research in the business sector with the research that has been published, and this particular article was no exception. By providing this comprehensive business model framework that any business may effectively use, Storbacka has made it even easier for others to be able to work to generate a successful business model, and, in turn, a successful business. Through looking at all the different phases and cross functionality issues as a whole Storbacka was able to see where success would lie within the different business models, and he determined that “success in solution business requires a firm-wide initiative” wherein no one department may have sales or support dedicated to their sole discretion (2011). By ensuring this, Storbacka has made it the goal of the whole company, and thus has created a far more stable environment than was provided through other business models.
Tuli, Kohli, and Bharadwaj (2007) have presented the overall take on customer solutions not just from a business standpoint, but also from the customer standpoint, allowing businesses to see where their successes and their failures lie in this regard. Through looking at both perspectives, a business is able to see what works for them, what doesn’t work, and what needs to be changed, or different ways that these changes could be better effected from a business standpoint. The core concept of this is determined by the type of business and the type of clients that a business has, which is another important aspect that the company needs to consider; the solution that may work ideally for a business in one industry may cause a business in another industry to fall flat on its face. This is a nice distinction, as many people fail to realize that industry specific solutions are just that, industry specific, and while one solution may be adapted for a different industry, it may not be applied exactly. Though this should be a common sense application, it is something that many businesses tend to forget.
Managerial Implications
The managerial implications of Storbacka’s findings (2011) indicate that the manager will need to find “a balance between commercialization and industrialization” looking at both what the market segments and customers need as well as seeing how the business must be scaled, and what forms of repeatability will need to be put into place. Managers will be unable to create on the fly solutions to the issues that are presented, nor will they be able to implement solutions that are not fully thought out, as they may have done in the past. Every solution, before it is implemented, will need to be carefully thought out and weighed against both sides of the equation in order to ensure that neither side experiences any adverse effects if a particular solution is implemented.
Tuli, Kholi, & Bharadwaj (2007) have offered up five different managerial implications for the research that they have provided. First, that the attention of the suppliers is drawn towards the customization and integration that the customers need; second, that all four of the different phases, or processes are properly implemented in order to coordinate the different functions of those four phases; third, that each process is executed properly and without delay; fourth, that the perspective on the solutions that are implemented keeps in mind how these solutions affect the other processes; and fifth, that the solution is continued to be viewed in light of the four processes in order to assist in creating a method of dealing with customers that is not only better structured, but also one that is far more effective when dealing with each engagement with a customer (Tuli, Kholi, & Bharadwaj, 2007). Through the understanding and implementing of these solutions, the business will be able to provide more effective and more efficient customer solutions than it has been able to provide ever before.
- Storbacka, K. 2011. A solution business model: Capabilities and management practices for integrated solutions. Industrial Marketing Management, 40 pp.699-711. [Accessed: 10 June 2013].
- Tuli, K., Kohli, A. and Bharadwaj, S. 2007. Rethinking Customer Solutions: From Product Bundles to Relational Processes. Journal of Marketing, 71 pp.1-17. [Accessed: 10 June 2013].
