Customer Centric Business Models - Two Steps Beyond Customer Relation Management

Master's Thesis from the year 2003 in the subject Business economics - Offline Marketing and Online Marketing, University of Applied Sciences Ludwigshafen (MBA International Management Consulting - University of Ludwigshafen, University of Lincoln), course: MBA, language: English, abstract: The submitted dissertation critically discusses business models in the context of customer dimensions under uncertain market conditions. The following questions summarise the fields of investigation: • How do business models adapt to rapidly changing and buyer driven markets? • What are the next two steps after Customer Relationship Management? • Can the gap in the process chain between 'Customer Relation Management' and 'Sup- ply Chain Management' be bridged and how? • How can a method be developed in order to measure the current customer orientation of a company and to compare companies among each other? • Are customer oriented companies more profitable? As a deductive research approach is used, beneath a small number of inductive elements, an investigation in both secondary and primary data is imperative. Subsequently a critical review of related literature along with a supporting inquiry is part of the dissertation. The scope of the work includes background information, the discussion of future business models as well as an empiric impression of 'customer orientation' in German small and me- dium sized enterprises. The most significant conclusions can be recapitulated as follows: • Simple customer orientation can lead to less innovation, furthermore to unprofitable business and in the worst case to the elimination of a company. • Customer oriented strategy is about building processes that are able to react to any en- vironmental or economical modification as fast as possible • The evolution of Customer Relation Management will lead to new customer driven and pulled business models, including innovative measurement methods like 'Return on Customer' • The gap between Customer Relation Management and Supply Chain Management will in all probability be bridged, new concepts (e.g. Customer Chain Management) will represent this task • A 'balanced' Customer Centric Index, developed as a benchmark instrument as part of the dissertation, shows that only a third of the examined companies can be interpreted as 'customer oriented', on the other hand 'Sales & Marketing' is regarded as the initial and most influencing process. • A statistical connection between 'being customer oriented' and 'profit' could not be proved • As a surprising and unintentional result the survey revealed that focusing on a small market (niche) is, at least for SME, a more profitable business. [...]