Today's ever-changing business climate is requiring the vast majority of companies to alter how they operate in order to survive, new research shows.
More than 90 percent of U.S companies are changing business models to meet customer demands, embrace and leverage disruptive technologies and remain competitive in the global business landscape, a study by audit, tax and advisory firm KPMG revealed.
Stephen G. Hasty Jr., a KPMG partner and U.S. innovation leader for Advisory, said business model reviews and changes have become a permanent component on the corporate agenda.
"Companies today face unprecedented challenges to develop operating models that can help them respond to and translate current marketplace pressures into competitive advantages," Hasty said. "With a carefully considered transformation process, companies can also make themselves agile enough to manage the new, unforeseen challenges that lie over the horizon."
The research found that changing customer focus and buying patterns are the top reasons for business model changes. Among the other triggers are new technologies, domestic competition, a changing global environment and balancing growth with shrinking budgets, while raising efficiency.
Despite the continual changes for many businesses, just half say their organization's transformation approach aligns their business model with their strategy. In addition, 45 percent of those surveyed acknowledge that their organization has no formal process for prioritizing business transformation initiatives.
"Alignment of business strategy with an organization's operating model can help institutionalize the transformational process, embedding enough agility to help the organization evolve more quickly and easily as new marketplace challenges come along," Hasty said. "Companies can leverage and capitalize on disruptive forces in order to thrive amid emerging challenges and threats to their business."
KPMG said there are a number of questions business leaders should be asking when deciding how to alter their business models, including:
- To stay competitive, what will be the most effective operating model in the future?
- How do I manage increasing risk, optimize my global tax position and address regulatory changes?
- Faced with the emergence of innovative and disruptive technologies, what will my business and industry look like in the next five years?
- With the evolving demand for goods and services, how will my customer needs and wants change in the future?
- Who are my competitors today, and who will my competitors be in the years ahead?
- Compared to my competitors, what are my company's greatest strengths and vulnerabilities?
The study was based on surveys of more than 900 U.S.-based multinational companies.
Originally published on BusinessNewsDaily.