has said that Small and Medium Enterprises (SMEs) in Africa must adopt a new business model in order to continue to succeed and ultimately guaranteeing their businesses.
Head, Strategic Partnerships, Microsoft 4Afrika, Soromfe Uzomah, in a paper he wrote, titled: Should post-COVID-19 reimagining prompt African SME’s to revisit their business models?, a copy of which was made available to the Tribune Online pointed out that even minor changes to a business model can have great benefit to customers and businesses and the goal of business model innovation is to better satisfy the needs of the customer than the existing one allows for.
He stated further that innovation becomes important only when it solves a customer’s problem and has a business model that creates or captures value.
“We must strengthen the innovation ecosystems in Africa. For SMEs and start-ups to thrive in the competitive world of business, they need to progressively innovate to ensure that goods and services reach untapped customer needs, and for this, business models must allow innovation to flourish.
“Here, accelerators and innovation hubs have an important role to play in nurturing talent and identifying and supporting future unicorns.
“While the COVID-19 pandemic has presented significant challenges to SMEs, it also represents an opportunity to adapt in order to make the most of their resources.
“Business model innovation is one of the most effective ways for companies to stand out from the competition and secure their future, particularly in turbulent times.”
Soromfe also noted that in times of significant changes, such as those stemming from the current global pandemic that it is pertinent for companies to think about what business model changes might help them adapt to the shifting landscape.
He also stated that a McKinsey’s report revealed that Africa has large unserved markets, hence that companies need to create means to meet the demands of this unserved section of the market, as well as see their unsolved problems as opportunities.
“This is why smaller and medium-sized enterprises (SMEs) have a critical role to play in accelerating economic development, serving the unmet needs of African markets, and especially creating jobs.
“Startups and SMEs are at an advantage over big business, as they can adapt and iterate their business models as they are in the process of business design, either as a startup at the outset of their development process or with the agility that comes from a small, lean organisation.
“This is not to suggest that big businesses are incapable of doing the same, as we know that several large, well-established organisations have leaned into their advantage of greater resources to challenge their existing business model and disrupt themselves.
“Take for example of Microsoft itself, which has moved from being primarily a hardware company to become more cloud-focused, embracing enterprise and services.”