The challenge today has seen such erosion of capital, wealth and consumer value, that today companies are being acquired or dying faster than ever imaginable. Business models of most companies are not circular. That is the challenge? This is the disruptive opportunity!
So what if;
1. Every mining or oil & gas company in the world developed local communities that leveraged a agri-crop model that cleans the mining & oil & gas sites, created entrepreneurial opportunities, created an investment model that the companies needed for their core business with a futures contract and where the local communities where the Prosumers?
2. time you drove your car you paid for mileage and insurance premiums on the same
3. Your shoe “mileage” and your calories burnt got you an insurance policy and discount on food from Nike
4. Every time you used your light you paid for the lumens consumed and the utility got you a discount on your energy bill
But before we address the “Circular business model and economic” opportunity, lets look at company mortality today which is shocking.
A must read is Business Model Warfare
By Langdon Morris, Senior Practice Scholar, Ackoff Center for the Advancement of Systems Approaches (A-CASA), The University of Pennsylvania
An InnovationLabs White Paper, prepared &, published jointly with A-CASA.
http://innovationlabs.com/BusModelWarfare.pdf
These three slices of history convey a clear pattern. Projecting the pattern forward as we noted above, it’s likely that about a third of today’s major corporations will survive as significant businesses for the next twenty-five years. “Most will die or be bought out and absorbed because they are too slow to keep pace with change in the market. By 2020, more than three quarters of the S&P 500 will consist of companies that
we don’t know today.”
Fortune 500
• A study by planners at Shell found that by 1983, one-third of the companies listed among the 500 in 1970 had not only fallen from the list, but had gone out of business altogether.3 That’s an average mortality rate of 12 companies per year, or one per month. They also found that a multi-national corporation comparable in size to a Fortune 500 company could only be expected to survive for between 40 and 50 years.
Forbes 100
• In 1917, Forbes magazine created its own list of the largest 100 US companies. By 1987, 61 of those companies no longer existed. Over the seventy year span, in other words, an average of about one company per year disappeared. Of the remaining 39 original companies, 18 were still large enough to remain on the list in 1987.
S&P:
• The S&P 500 list provides a third reference point. In 1957, the S&P listing of 90 top companies was expanded to 500. By 1997, only 74 of the original 500 companies remained, an average mortality rate of more than 10 per year.4 But a more detailed analysis shows that the rate of mortality has been steadily increasing, with far more companies failing as the end of the century approached. The average life span of an S&P 500 company has steadily decreased from more than 50 years to fewer than 25 today.
The numbers are shocking and it’s gotten even worse today. Why? The discontinuity of the Upstream, Midstream and Downstream cycles of business that is disrupting business ecosystems faster than ever before.
An example?
WHAT IF EVERY CARGO SHIP, TRUCK AND AIRCRAFT CONNECTED TO A COMMODITY EXCHANGE & GREEN?http://gerardjrego.com/2013/09/30/what-if-every-cargo-ship-truck-and-aircraft-connected-to-a-commodity-exchange-green/
or local communities were tied into creating energy supplychains for their lifetime?
CARBON CAPTURE AND STORAGE (CCS) – AN ELITE INDIAN TREE CREATING A GLOBAL SUSTAINABLE SOLUTION!
http://gerardjrego.com/2013/09/24/carbon-capture-and-storage-ccs-an-elite-indian-tree-creating-a-global-sustainable-solution/
or green bonds financed the opportunity for connecting companies to communities in energy supplychains?
GREEN BONDS, GREEN MINING ZONES, ELITE PONGAMIA AND BUSINESS MODELS
http://gerardjrego.com/2014/02/20/green-bonds-green-mining-zones-elite-pongamia-and-business-models/
The list goes on.
This is what we are seeing example of where the network ecosystem of connecting the circular is creating opportunities for marketplaces from iTunes and App stores to Google and Amazon.
WHY MARKETPLACES ARE EATING INDUSTRIES!
http://gerardjrego.com/2013/12/29/why-marketplaces-are-eating-industries/comment-page-1/#comment-404
MORGAN STANLEY THINKS SO? WILL AUTO OEMS BECOME POWER UTILITIES
http://gerardjrego.com/2014/02/25/morgan-stanley-thinks-so-will-auto-oems-become-power-utilities/
WHY “SMALL” IS THE NEXT BIG?
http://gerardjrego.com/2014/02/21/why-small-is-the-next-big/
Look at the the following;
1. Cash Conversion Cycle
2. Inventory Stock Turns
3. GMROI
Conclusion?
Business models that enables the circular creation of inventory, capital and wealth that connects upstream, midstream and downstream are disruptive and the greatest opportunity to do that is now? Mobility around technologies such as mobile phones and connectivity commoditize the opportunity of network discovery, collaboration and commerce, which is the key cycle for the circular economy.
Is your company and job next? You have the framework to look at now.
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