SHS Web of Conferences 100, 01013 (2021) https://doi.org/10.

1051/shsconf/202110001013
ISCSAI 2021

Importance of the Innovative Business Models for the Future

Success of the Company
Leyla Djuraeva1*
1
Tashkent Branch of Moscow State University, named after M.V. Lomonosov, Tashkent 100000, Uzbekistan

Abstract. During the last decade, the market environment for the businesses has been influenced by
digital developments and as a result, the focus on business model innovations has rapidly grown.
Businesses started moving away from the classic method of creating competitive advantage like a new
product development. Thus, this influenced business activities as well as companies’ business models into
innovations of new products and services, a new ways of company relationships with customers and
employees. Customers started expecting to receive services at a level comparable to digital solutions.
Simultaneously, it put pressure on organizations to reflect on their current strategy and discover new
business opportunities at the early stages. Digitalization is a one of the significant reasons for innovation
on the business model of companies. Currently, business model as a tool is becoming a very popular topic
due to its benefits received by companies and this topic studied by various researchers. This paper is
based on theoretical perspective and the study was done by analysing previous researches, articles and
papers in the present context. The study emphasizes that business model innovation can be a basis of
sustainable competition for companies and innovators may increase their returns 4 times than product and
service developers.

1 Introduction innovation in business models, and same as the threats

posed by innovations in competitors’ business models.
Current business world is influenced by tremendous A business model innovation is a new approach to
factors, and it is very challenging to survive for create value for customers taking into consideration
companies in this rapidly changing environment. In 21 digital changes, and how this value is carried or how
century, well-known Companies like Uber, Airbnb and the business gains profits from the service/product
Xiaomi became one of the leading companies in their offered to the customer.
respective industries because of their unique business Business models for a company also known as a
models [1]. Nowadays, companies and organizations plan or a strategy that describes value chain delivery to
are keen for profitable growth, for being competitive final customers [2]. In the practice, startups are keen to
and stay sustainable in the market. In major industries, use business models as modeling tools to plan, des
innovations considered to be in the form of new ign and build their new projects. However, established
products and services [2]. Of course, service and well-known companies also use them to develop
innovations are vital for the business growth and and succeed to support their innovation process.
considered as an important factor for competitive Professor Haim Mendelson from Standford University
pressure, but innovations in a business model became discusses the progress of business models and the
on priority level. As of today, the effective business impact of the developments in information technology.
model for the companies are key to future success [3]. In his research, he illustrates, that by implementing it
There is no future growth for a company, which cannot and digitalization the companies advances their
transform itself and develop a practical and effective business processes and becomes progressed in the
business model, as it will lose its strength and die. market [3]. He also states that changes that are
For every company, business model is considered incorporated into the new business model of the
as a logical key to perform, a system approach to create company, will gain more benefits. As per professor
a value for its stakeholders. Thus, business models Ricarts research paper, technology is main force to
always existed and always will. Companies always had drive the change today, particularly information and
opportunities to create new business models that may communication technologies [3].
change the standard rules of an industry, such as Kodak In the same research, author underlines, as it was
and Zara. However, taking into considerations of rapid mentioned above, business model concept emphases on
speed of technological progress in current days, the way the business creates value and adds revenues
businesses also dictated by technological changes to do and profits. Based on this theory. He defines model
things in radically different ways [2]. Therefore, there into three core elements: a value-creation model, a
is a tremendous increase in opportunities for profit model, and the logic of the business.

* Corresponding author: [email protected]

© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative Commons Attribution
License 4.0 (http://creativecommons.org/licenses/by/4.0/).
SHS Web of Conferences 100, 01013 (2021) https://doi.org/10.1051/shsconf/202110001013
ISCSAI 2021

Well known researchers, Raphael Amit and Christoph business model of the company occurs. Based on this
Zott stated that the focus area of business model has research gap, proper research purpose is identified. The
one of the significant positions for managers and purpose of this thesis is to identify the effectiveness of
academic researchers mainly for 3 reasons. Firstly, in innovative business models in the context of the
the current world, Innovative business model indicates company, benefits gaining from its implementation. In
as an underutilized source of future value. Secondly, it doing so, the researcher seeks to explore how
gives competitor advantage, as other market players successful can be companies which totally innovates
will face difficulties to imitate a complete innovative their business model rather than invests on other
activity system than a single new product or process. projects. Consequently, the research question in this
Thirdly, management of the company should never work will be: Will the Companies succeed by
challenge the effort of their competitor’s in business implementing innovative business model ?
model area as innovations considered a powerful
competitive tool [4]. Actually, the business model in
the digital economy grows into the success formula and 3 Methodology
it is gaining the power to establish a competitive The purpose of this research is to examine how the
advantage [5]. There are a huge number of examples in innovations in the business models may influence the
current business world to support these arguments, successfulness of the company in the market. To
including such as examples of Dell Computers, IKEA answer the research question, the researcher will
and Southwest Airlines. Though there is an increasing examine the existing literature review and also
number of research studies on this topic for last decade, qualitative research method is chosen to generate more
researches usually consider Business models and tools accurate data. The Researcher will observe and create
from the technical aspects –elements of the business semi-structured interviewes with 2 largest companies
model, how can be innovated within the business in the developing country, which are successfully
model and how this innovation process can be innovated existing business models.
implemented [5]. There are very few research studies
about the consequences of innovations in business
model in the business and its problems. Previous 4 Theoretical Background
researchs on business model innovation has
concentrated on how innovative changes in the In this section, we will review existing scholars and
company affect the business model [6]. Thus, there is a articles on this topic, empirical studies and summarize
still distinct gap in research on interrelation of success key ideas, statements which illustrate the importance of
and competitive advantage with innovative business this topic nowadays.
model.
We have reviewed list of articles and empirical 4.1 Theoretical Background
studies on this topic, analysed the opinions and
statements of scholars which are presented in this paper The main purpose of the Theoretical Background
below. This paper is constructed on the following way. section is to provide a reader with the literature
Firstly, the theoretical background on this research overview in the respective areas of the business.
topic will be stated, where the concept of the Aligned with the research question and research goal,
innovative business model and its importance, its conceptual background offers a literature review in the
influence on the business of the companies will be field of innovation management and types of
analyzed. After that, different views and results of the innovations, business model, , competitive advantage
previous researchers will be compared and stated. and at the end, the connection between competitive
Finally, the paper will provide summary on the results. advantage and business model innovations. Also,
different studies will be analyzed and compared on the
effectiveness on the innovative business model of the
2 Research Purpose and Research current technologically progressed world.
Question Nowadays, change can be seen everywhere, the
world is changing very fast, thus society has been
under greater impact of them and trying to adopt to
these changes. One of the global issues is significant
The issue of innovations in business model and its
changes in the technological sphere and transformation
effectiveness were already identified almost decades
of major processes, activities and the business through
ago in one of the oldest research papers of Zoe,
digitalization. Digitalization is a new concept of last
Osterwelder [18 and 19]. Nowadays, reaction of
few decades and it plays major role in success of
management on changes happening from environment,
organization. Digitalization has spread been widely
technology or other factors and reflection of these
extended to every organization and has become an
alterations on the company’s business model is vital
integral component of the modern world, as a result, it
[4]. Recently, a few scholars started to research the
is hard to imagine an organization without
interrelation of changes in the market and business
implementation of innovative tools in current world [4,
model innovation [13]. However, this topic on business
7]
model innovations still lacks of practical and clear
In the digital business world, information has been
analysis on how implementation of these changes in
vital resource and newly established companies,

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startups in different industries, take advantage of this digitalization can be applied not only in the sphere of
culture and economic change to perfection [18]. As a IT, but also can yield more benefits in other industries.
result, these new small companies are devastating the As per research paper of Lee and Vonortas [9], a
business of big organizations and increasing market business model comprises of multiple components or
from traditional brands. elements. Though referred to previous studies such as
In order to face successfully to market changes Rayport and Jaworski [8] where business model is
such as the case of the progressive rise of the digital based on 4 choices, such as
business environment, existing organizations must be  a “value proposition” or a value chain for niche
able to quickly shift and adopt changes. They have to customers;
maintain a variety of innovation efforts to operate more  coverage of different type of products services or
efficiently and deliver greater value to their customers information (or combination of all of them) for
[6]. covering market needs;
As earlier described, digital technology can  An exclusive and secure resource system for
considerably contribute to a company’s business benefit creation, such as , the “associated resource
model, which supports the companies’ purpose; profit system”;
and growth [6].  Appropriate model for financial system of the
One of the earlier researchers, Raphael Amit and company, which covers, income and return models,
Christoph Zott, provided in depth analysis on the topic shareholder value models, and future growth
of business model innovation and its importance for models.
managers and academic researchers. Strategic In the same study, another researcher [3] proposed
discussions on the Business model and influence of 4 components for digitalized business model
digitalization and IT were enormous, and there is no framework:
still one defined compromise on this topic. product innovation or value proposition, customer
relationship, infrastructure management, and financial
aspects that can be found throughout the three former
components, such as cost and revenue structures. To
summarize their investigations, business model in new
digital world may vary with different components, thus
there is no clear definition of ideal business models for
generation of income [4]. Another well known
researchers Johnson and Christensen also supports idea
of 4 components which interrelates and in sum delivers
value to the customer [23]. The model is developed
Fig. 1. Zott and Amit business model design parameters almost decade ago, but it is still considered as a basis
for planning the business model innovations topic.
These researchers conceptualize business model as
a general system of activities correlated with each other
and consequently, during the process of innovating
business process 2 parameters: design elements and
design themes for activity system should be done (for
details refer to Fig 1.) [23]. The researchers explains
that by interrelating each of these components shown
in Fig 1, business model can be properly constructed in
order to achieve greater efficiency [23]. They also
presented 10 year-long research programs on business
models and draw a parallel between digitalization and
business model innovation [4]. Thus, business model
innovation has been acknowledged as a new method of
gaining competitive advantage for mature companies
[3].
There are variety of business models that adopts
innovations to stay digitalize. The study of
digitalization and the effect of information technology
on companies and their success have been critical to Fig. 2. Business model components from the
various researchers [13]. The Power of business Johnson&Christensen
models and their success has been analysed firstly
Referring to the study of Johnson, Christensen and
through it related and mobile communication related
Kagermann [12], which has illustrated the four
industry [2]. In his research, the two cases Apple and
elements that in total create, deliver and capture value.
HTC were investigated and results identified illustrates
These are considered as “customer value proposition”
that implementation of new business model with
(CVP), formula for profit model, basic resources and
innovations and digitalization assisted to derive
vital processesThis model also illustrates that the
revenue and boost income of the company.
companies oriented on value creation recognize that
Innovations and business models with consideration of

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each business component has significant role for business model canvas as concept, which is applicable
success in the model [23]. Change of any of them will to the whole canvas model.
lead to the loss or profit of the company as the value In order to be a successful business, organizations
proposition may be affected. should be able to challenge themselves on a number of
The differences of Business model innovations issues and also review the dynamics of the respective
related in digitalization has been studied and analyzed mechanisms which are:
in depth already few decades ago. In the summary - offered value to customers [strategic goals and value
report of Lee and Vonortas, several examples were proposition];
presented were value creation of companies differs in -scope of offerings;
digital and physical economy. According to the study -pricing strategy;
of Meredith and Schaffer [7], in the industrial economy -appropriate revenue model;
the main purpose of the management is to develop the - calculated and estimated list of required resources and
physical transformation process by implementing all expected costs to provide the value to final
management techniques, while in the digital economy, customer [6]. In case of Business Model Innovations,
digital data and it is vital and main input into a Organizations should be able to understand and
business transformation process. capitalize on the distressing issues of the electronic
The digitalization allowed growing to a number of world and e-commerce to renovate their business
new business models and these models can be used in models for future success. Actually, the major
birth traditional business and in more innovative researchers agreed on the statement, that Business
businesses. Innovation in the digital world concept as a model innovation nowadays is mainly based on proper
quick development of new business models, it can also use of new knowledge [technological and market
rapidly cause existing businesses to become outdated based] that to design and implement an innovative way
[10,11]. of product offerings and services for segmented
According to the general data gathered through customers [6]. One of the well-know cases of
different studies and researches, business models of successful business model innovations that were able
Amazon, Walmart and Target accounted for 76% of to capitalize on some of the troublemaking features of
market capitalization in retail industries by 2007, the Internet include channel innovation [e.g., Dell’s
earning more than $300 billion of value [14]. build-to-order virtual integration model], process
Furthermore, Comparable results have been proven in innovation such as Boeing virtual design and e-
the airline industry, rental industry, digital procurement, customer-relationship (e.g., Yahoo!), and
communications and others, which illustrates the affiliate network (e.g., Amazon) [6].
importance of proper developed Innovative Business Rachinger and other authors in their study
model in business environment in current world. emphasised that, one of the methods and tools to
Another interesting statement was found in the renovate business model and make it more related to
research of Eksell and Harenstam [6], were evaluation the digital world is implementation of E-commerce
of new business models discussed. It has been stated tool. It is useful to implement as a supporting
that start-up methodology is an optimal way to innovation to boost existing business of the company.
approach market, based on specific requirements. 3 In that case, companies might be unsuccessful to
main success factors for it were prescribed in research recognize and profit from on many of the Internet’s
as follows: opportunities. Thus, in order to benefit from all
1. to do things differently from the status quo, advantages, the “disruptive attributes” or types of e-
2. to bolster the competencies required for the new commerce innovation must be recognized and applied
business model, and in a practical business model [6].
3. to continuously and endlessly strive for the change Furthermore, in theories, one of the successful and
to happen [6]. useful tools for development of business model and
The authors also inputted that the results of proper identification of key activities is known as the
research on value drivers, which comprise the business model canvas structure [6]. The model can
successful model. They are classified as Innovations, separate processes and key activities from total value
lock-in, protection from competition, and efficiency proposition and representation of reasons for
[19,6]. The emphasis is on the key activities and key considering as key and non-key activities.
resources that outline a business area, estimating the One of the main advantages of the business model
output in market attractiveness as well as canvas is the fact that it represents business plan in one
competitiveness. This evaluation gives the obligatory page [14].
path to rearrange assets and gives ability to provide a During the process of development of the business
unique product or service. model, several ideas have be taken into consideration
Another interesting approach, which is tested by and one thing emphasized by Osterwalder and Pigneur
Kim and Mauborgne [6] on how to innovate a business [2] is the concept should be consumer oriented or as
model called Creating Blue Oceans. The basis of the known customer centric. It means that all choices made
model is to take the industry standard and use it as a regarding the value proposition, distribution channel,
reference point when creating a customer-centric customer relationship and revenue stream all should tie
business model. The focus is to create an advantage back to your intended customers. These segments are
against the market’s standard value proposition. The directly linked to the customer segment and together
Blue Oceans model is suitable and works well with the they form the core of the business itself, remaining

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segments form a foundation for them to work but Proper business model with consideration of
without a solid core structure, the model will not work innovative tools and digitalization will improve
[4]. business processes of the organization, improve
efficiency, quality and consistency, also it helps to
reduce manual processes [7]. Digitalization helps in
improving the business process efficiency, quality and
consistency, which results in effective internal
efficiency of organization; this can be achieve by
eliminating the existing manual process and maintain
better accuracy [8]. Taking into consideration the
increasing importance of digital business models for
modern enterprises and the fundamental changes they
cause, the proposed theories will also affect future
corporate management tools. In general, based on the
pace of changes and innovations appearing in the
market, total business management concepts, the
requirement for in depth analysis for business model
development and its implications should be
reconsidered and updated.
Fig 3. Osterwalder and Pigneur Business model innovations The speed of these technological changes and use
However, in the studies of Osterwalder and Pigneur of these great challenges as an opportunity, made
[19], it was also argued that Business model should be variety of business stronger and successful [9]. As it
viewed as a holistic concept that embraces all was stated in the article, the era of digitalization and
organisations part: being able to react on these changes, made start-up
1. Complex system companies like Airbnb and Uber to multi-billion dollar
2. Holistic concept with many organisational parts companies, within a short period of time [6]. As it was
3. Functioning in dynamic business environment mentioned above in Introduction section, the leading
The business model approach presented by companies (Google, Uber, Amazon) have totally broke
Osterwalder and Pigneur is widely used by stereotypes and business rules in their respective
organisations and it also gives opportunity to be industries by changing the basic building blocks of
successful [23]. their business models [1]. After researching more
One of the famous and well used models is closely on these cases, authors identified that the
proposed by Boston Consulting group which consist of source of competitive advantage has change. Now,
2 elements value proposition and operating model [23]. unique model is more applicable and valuable, rather
In general 6 sub elements which are illustrated below that innovative products and services. Innovations on
in figure 4 helps companies to identify structural way Business model facilitated these companies to gain
to identify key areas to change and practical to develop higher sales, better profit margins and more cash flows
relevant model. than other players in the market. Actually, these
companies are lack of clear value chain and without
any fixed charges (in machinery, equipment’s) [1].
As per findings of Economist Intelligence Unit
(2012) which had survey with more than 4,000
executive managers around the world on the topic
innovativeness in business [1]. According to findings,
these senior managers highlighted that, they gave
preferences to business models as a competitive
advantage rather than developing new products and
services. Additionally, one of the previous and first
studies by IBM (2006) emphasized that due to rigorous
global pressures, high level management shift the focus
and interest towards to business model innovations. It
was also mentioned there, that companies with best
results in the market and who beaten the competitors
Fig 4 Boston Consulting group Business model and who grew on rapid speed, were mainly focused on
representation
successful business model creation.
According to the research on digital transformation In the same research done by IBM (2006), which is
and its success factors [8], company should have a discussed in the paper of Bashir and Verma [1], it was
valuable and effective business model, with strong stated that in 2006 major CEOs spent about 30% of
digital capabilities, and it is achieved by the their time in the endeavor to find best solution for
implementation of these digital tools. However, they business by innovating their business models.
have respectively, severe impact on the operation The study also underlined that companies gained
processes, resources management, internal and external higher profits with the use of new innovative business.
consumers of the organization [8]. 40% of senior managers surveyed stated firms put

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efforts, energy and resources to be the first to drive the companies adapt incrementally changes by that got
change and be a leading competitor in the market, higher opportunities to grow [16].
rather than being the one who will follow others. The table below summarizes key points identified
Furthermore, list of benefits from integration of from the literature review. It illustrates the theoretical
innovations in business model were also presented in framework for the innovations on business model and
this report, where more than 50%(surveyed) of the its success factors.
directors mentioned that it may reduce costs and allow Table 1. Summary of key points from Literature Review
a strategic flexibility. Also, more than 40% of
executive respondents encouraged that innovative
Element Key points
business model gives new market opportunities, helps
to renew focus [1]. Business Business model is considered as a logical key
Another Researcher Eksell and Harenstam [6], in model to perform, a system approach to create a value
their report illustrated that in general, innovations in for its stakeholders.
the business model leads to number of positive changes Business models for a company also known as
a plan or a strategy that describes value chain
in the company. In their case study analysis, they delivery to final customers
identified that companies who innovated business A business model innovation is a new approach
model successfully, reduced costs, boost better to create value for customers taking into
performance. However, they also faced to major consideration digital changes, and how this
limitations and obstacles [6]. The Researcher value is carried or how the business gains
mentioned that this process takes strong team and takes profits from the service/product offered to the
time. It is improper to follow market trends and try to customer
quickly and temporary fix existing business model to Classicific 1.Zott and Amit analyzed and presented that in
be competitive in the market [6]. ation of a effective and successful business model is
business general system of activities correlated with each
Furthermore, different academic researchers
models other and consequently, during the process of
identifies the variety level of innovations in the according innovating business process 2 parameters:
business model [19]. While one definitions stating that to design elements and design themes for activity
its moving from old business model to new one, other researche system should be done
scholars debating that it’s the process of adding rs 2. Lee and Vonortas in their research,
innovations into existing model. There is no right mentioned that a business model comprises of
answer as the methods and approaches for each multiple components or elements which is
business model will vary during implementation [23]. about behavioural and structural correlation
Breiby and Wanberg, in their report on successfulness between them
3. Rayport and Jaworski researchers illustrated
of the innovation of business models illustrated the
that business model is based on 4 choices, such
challenges in the implementation of both methods. In as a “value proposition, coverage of different
order to make successful the process of innovation of type of products services or information (or
business model, all proper stages (which is presented in combination of all of them) for covering market
their paper [23]) should be managed. Also, the needs; secure resource system and model for
importance of analysis of existing (current} model financial system
helps more to identify week point as it is challenging to 4. Johnson, Christensen and Kagermann
forecast how far business model should be innovated illustrated the four elements for innovating
and how will work [23]. business model that in total create, deliver and
capture value.
The researchers in their scholarly written reports
5. Osterwalder and Pigneur, - argued that
conclude that in current aggressive competitive world, Business model should be viewed as a holistic
business model innovation are more applicable and concept that embraces all organisations part:
relevant to implement, as new products and others can 1. Complex system
easily copy products or services. Innovative Business 2. Holistic concept with many organisational
model is an alternative solution for future growth, parts
allows gaining sustainable revenues and helping to 3. Functioning in dynamic business
earn four times more returns than product innovators environment
[1]. The business model approach presented by
Osterwalder and Pigneur is widely used by
organisations and it also gives opportunity to be
4.2 Results identified based on literature successful
review 6. One of the famous and well used models is
proposed by Boston Consulting group which
The scholars, which were stated on these papers, did a consist of 2 elements value proposition and
significant research on the issues related to innovations operating model [23]. In general 6 sub elements
of business model and its influence to the core which are illustrated below in figure 4 helps
companies to identify structural way to identify
business. In the findings of the research conducted by
key areas to change and practical to develop
Tesarova, the b2b large market companies benefited relevant model.
significantly by applying the innovations through Features Business model innovation consist of different
digitalization to the core business model, they gained types of innovation, based on it the scope in the
higher customer value and in major cases, the model are changed
New business models can fully integrate with

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the old business model or may partially replace suddenly less attractive. While the rise of digital has
it been mounting similar pressures for more than a
Researchers explain business model innovation decade, the current crisis has significantly exacerbated
as an cyclical process going over different and accelerated its disruptive force.
stages of designing and implementing business
To summarize, the outcomes indicates that one of
models.
For successful integration of innovations in the reasons why business models are innovated is due
business models, they should be competitive to a fear of being replaced by a competitor. The change
and hard to understand and copy for other is happening on a daily basis. Consequently,
market players. companies who wisely created and developed their
Result In case of successful implementation of existing strategies and innovated existing business
from innovation in the business model, the success of models with proper methods, are becoming successful.
implemen the company is its competitive advantage over The advantage of innovative business model in the
tation of market which help to gain higher customer current work is very high for the successful companies.
innovatio satisfaction and respectively profit for the
ns in company
Business 4.3 Results identified from Interviews
model
The data collection based on the interview is mainly
One of the newly published studies presented by depend on the participants level of strategic insight
famous consulting agency McKinsey, illustrates that about the company, his openness and knowledge.
major innovation in business comes after getting over Researcher was able to conduct interview with deputy
the crisis [22]. In 2020, one of the largest crisis for the directors of the banks, as they are one of the
world is the COVID-19 pandemic, which affected representatives and knowledgeable person. Several
almost everyone from all businesses to each person. management level respondents declined the request for
Their current survey consisted of more than 200 the interview, thus only few was identified.
organizations across industries, where more than 90 One of the Banks (Bank A) in Uzbekistan which is
percent of managers said they expect the significant known in the market as a Mortgage Bank is opersting
consequence from COVID-19, which will change in the market for several decades. Currently. it is in the
business processes and the way the business is done. process of innovating its business model. As per
Furthermore, it will definitely influence the customer discussion with the management, the reason for this
needs and preferences. The survey also identified that decision was based on the governement level. The
the key focus of the executives now is to sustain central Bank of Uzbekistan, requested the bank to be
business continuity; they have to evaluate cutting costs, more technologically efficient and digitalize. The main
motivating productivity, and holding employees beside problem of the Bank was, it was not customer oriented,
innovation to business growth As a result, innovations the services were time consuming and in general the
in business are least priority investment. However, the existing system was outdated. It tried to be competitive
managers from conducted survey strongly believe that by inventing new products, new design of services, by
innovations in business are very important and as soon hiring high skilled personnel. However, without
as the world is stabilized, companies will return to updating and innovating the model itself, the results
these investments. Moreover, McKinsey’s survey and were not achieved. As a result, in 2017 the bank started
interviews conducted with business heads indicates working on changing the structure, innovating its
that, innovations were not prioritized into their business model.
business as they plan to concentrate on following The Deputy Director of the Bank stated that it is
activities: already 4 years and results are not achieved yet.
 Reinforce the core business of the company The obstacles they faced :
by following recognized opportunity spaces, - Expensiveness of innovations on existing model
maintaining cash and minimizing risk, until - Time consuming
clarity of the future actions will be identified - Due to digitalization and It excellence of new
 Adaptation of the core of the business to model, major other areas should be changed
meet changed customer needs On the Other hand, partial implementation of new
 Clarify and rapidly address new opportunity innovative business model, already help bank to reduce
zones costs and create better reputation in the market.
 Reevaluate portfolio of the innovation According to the Banks predictions, by 2023 the bank
initiatives and allocate resources properly will become in top 3 banks in the market as a
 Build the basis for post crisis development technogically shift and highly profitable.
in order to persist competitive in the recovery The second Bank (Bank B) is the largest
government bank and is also in process of
period
The businesses should take into consideration, that implementing innovations in Existing business model.
it will never operate as they used to do it in the past. The researcher had chance to have a interview with the
As the business model starts adapting to new market head of Strategy department, which is in charge of this
changes, the Competitive advantages changes change project. The Bank is planning to innovate
dynamically, because the core competences that whole business model within 3 years.
distinguish the business from others might become The reason for implementing Innovative business
model is to become highly competitive and gain higher

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ISCSAI 2021

profits. As per analysis of Business Intelligence Team example, by using digital technologies was discussed.
of the Bank B, the forecasts done on the results of This summarized information signifies a valued,
innovations in Business model shows very good significantly relevant contribution to the sectors that
results. The Bank B will become number one bank in absences on an empirical foundation. According to
the market for its stakeholders. Amit et al. [19] strategies in the management level
As per interview results, The Bank B decided to strategy has to be used business model frameworks in
innovate its business model by creating customer order to identify the correct business model innovation
centric. Currently, due to very high risks and difficulty for the specific situation, and how to apply it, before
level on innovations, bank decided to implement them proceeding with the implementation. The Success of
in step-by-step mode. implementation and success of the business in current
digitalized economic conditions relies on both, getting
the model right and making sure that the compulsory
5 Conclusion business does not offset the new model [6].
The findings on the theoretical research by analysing Furthermore, according to the results of the interviews
the literature review is presented in this paragraph. conducted with the largest banks in the Uzbekistan,
After the review of all research and findings of studies clarifies that Innovations in business models is very
and investigations, it was identified that in this expensive and strategic tool and it should not be used
changing market, the organizations have to be able to only for competition, but for strategic growth of the
make a proper examination of the existing model and company. In case of using wisely this method, the
based on industry requirements, competition in the companies will benefit and succeed in the future, To
market. In general, Innovative Business model is a finalize, a practical innovative business model will be
powerful tool for succeeding in business, for being able to cover the essential economic principles of the
updated in the market and to gain competitive market (various costs and revenue/pricing models) and
advantage. It was also analysed that, old market give company opportunity to minimize extra costs [13].
strategies like Porters on new product development and Also, they have to be able to detect and get the most
optimization of value chain as an competitive has been out of on the disruptive attributes of Internet
effective advantage. In current social and digitalized commerce. Moreover, it should be developed based on
era, the modern companies try to distinguish the general picture, vision and strategy of the company.
themselves in order to be profit oriented. Moreover, the Additionally, the inability to implement the innovative
startups, and companies which are influenced by business models and not being able to catch the pace of
technologies and who were able to implement digital new digitalized economic factors may lead to the
mechanism into the business becoming more popular failure of existing large businesses and organizations.
and showing to the market the win strategy [1]. As it Thus, nowadays, the digital world dictates the rules and
was mentioned above, some of the big entities such as creates great opportunities for the market, only if they
Google, Amazon and newly emerged in the last half are used properly. Therefore, the only mechanism that
decade Airbnb, Uber are changing the ground rules in will have substantial value and effect in the near future
the market by their innovative style of business. These is managing the technological shifts in the company’s
technologically developed companies stress on mainly business, by innovating the business model upon the
on the idea of innovating their business model, rather rivalry. Innovating the Business model is not easy
than concentrating on fixed value chains. They are process, it is more challenging, expensive and time
result of successfully planned business with high consuming than the product and process innovation,
margins and turnover. Accordingly, the studies show but the paybacks derived out of it are also superior. It
that in the era of technology and digital revolution, will not only sharply increase the profit of the
companies are more concentrated on the competent company, but also will help to reduce costs and
development of Innovative business model. The optimize the business itself [1] Moreover, it is very
companies should not spent time and resources, and vital for CEOs to deeply analyse the existing model
put high emphasis on the development of new products and identify the limitations, before taking opportunities
and services with an existing business model. Different and innovate the business model. Finally, the research
studies are showing that it will not gain competitive on implications of business model innovation and its
advantage in the market. The study held by different importance is still at a potential stage. There is a huge
researchers has reasoned that business model research gap in this area. Besides, there is a deficiency
innovation can be functioned as a viable competitive of a practical method for how companies should follow
advantage as imitation of entire the business model is business model innovation in the digitalization
not easy and affordable as imitation of new product in framework. There is still lack of literature and
the competition [13]. researches, same as businesses, which are lack of the
Nevertheless, Innovative Business model tool is knowledge of how to perform business model
still not highly popular among companies. It is still innovation, which method to use and the prediction of
under the process of full implementation and has to be results from these changes. Nevertheless, the existing
vital for existing and new businesses to use for success studies are proving the innovations in business model
and digitalize in the new economic era. All the will help to improve the future progress and
opportunities and challenges organizations may face sustainability of the business in this digitally changing
during the process of business model changes, for world.

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