Developing New Business Models in the eALT Sector: Research Findings from the COMODAL Project

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    Abstract

    Executive Summary
    Four new business models for the e-ALT market have been proposed, based on extensive research into the structure and limitations of the existing market.
    All four models have been validated to various degrees by a series of industry experts, each with its own strengths and weaknesses, and each being appropriate to different contexts. But importantly the business models do not exist in isolation. They are part of the wider context, and any proposed change needs to consider that context, and aim to influence external factors to increase the chances of success for any firms adopting one, or a combination of these new models. The most prominent example of this is the need for both external and internal methods of generating both education and information.
    By far the issue that elicited the most comment across all the models was the value proposition. This is understandable in many ways as it is the reason that customers, or a particular customer segment will patronise one particular firm over another. It is the combination of products and services that a company delivers to a customer group that they will perceive as valuable. And in the value proposition is the essence of the success of the new business models. Here the emphasis must be on good design, and consumer choice, also on delivering the required trust, through either recognisable quality standards (for goods or services), or through a brand that can stand in proxy and deliver trust in a different way. Additional levels of confidence can be developed through demonstrators, and opportunities to assess reviews from previous or existing users. Add in a convincing post purchase support offering and five of the eight customer identified barriers to the development of the e-ALT market have been addressed.
    Another important factor if we are to encourage a ‘step change’ in the market, is the catalyst of key partners working together to provide complementary products and services which satisfy consumer needs. Existing strong brands are an important part of developing the trust that consumers demand, but larger companies can benefit through working with smaller, more agile firms that have lower fixed costs and greater flexibility to move into new areas. They can often also provide the additional level of (after sales) service that gives reassurance to consumers.
    Although Model 3 ‘the Broker (Independent Advisor) is well supported by both the consumers and the industry experts it deals with only one, albeit important aspect of the future high level business model. It is a highly focused trusted information provider, leading to the purchase of appropriate products and services. Although this may be necessary, it is not sufficient, without the development of Model 1 Complementors, and Model 2 Diversifiers, and Model 3 Insurance.
    One of the experts argued that demand isn’t necessarily waiting to be exploited, sometimes you have to create demand, or, it might be argued you need to ‘help it along a bit’. Mason in her research into business models commented, “Markets aren't just “out there” - they need to be made (Mason, 2012). Both of these comments again emphasise the advantage of large scale business with a trusted brand easing significant parts of their existing customer base into related (to some extent) products and services incorporating e-ALT, but importantly providing solutions, not selling “products”.
    If change is to operate at scale one of the most likely models to succeed is model 2, Diversifier, through the ‘bundling’ of products and services, but through one or more companies that already have a large scale customer base.
    Original languageEnglish
    PublisherHealth Design and Technology Institute
    Commissioning bodyThe Technology Strategy Board through the Assisted Living Innovation Platform (ALIP)
    Number of pages60
    Publication statusPublished - 2014

    Keywords

    • Business models
    • Assisted Living Technologies

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