Business Model Innovation: What It Is And Why It’s Important

 

By Graduate Programs Staff 

Amazon launched in 1995 as the “Earth’s biggest bookstore.” Fast-forward 22 years, and that “bookstore” is now a leader in cloud computing, can deliver groceries to your doorstep, and produces Emmy Award-winning television series. 

The trillion-dollar organization has achieved this growth by being continuously willing to innovate upon its business model in order to address new challenges and pursue new opportunities. 

“Amazon is amazing at new business model development,” says Greg Collier, an academic specialist in Northeastern’s D’Amore-McKim School of Business and the director of international programs for the Center for Entrepreneurship Education. “They look at themselves from a customer-defined perspective.”

That approach has helped Amazon scale because rather than rely on one revenue stream or customer segment, the company continuously asks “What’s next?” This has allowed leadership to iterate on its business model accordingly, repeatedly experimenting with a process known as business model innovation.

As Amazon’s success demonstrates, this process can be incredibly exciting and impactful when you’re in control. However, when the need to innovate your business model is thrust upon you by outside forces, it can also feel quite disruptive. 

For instance, today, the novel coronavirus is causing tremendous shifts in both the national and global economy. Many companies are being forced to innovate and adapt their business models in order to meet these challenges, or else risk falling victim to these drastic changes.

Read on to explore what business model innovation is and why it is so important for businesses to be capable of change.

What Is Business Model Innovation?

A business model is a document or strategy which outlines how a business or organization delivers value to its customers. In its simplest form, a business model provides information about an organization’s target market, that market’s need, and the role that the business’s products or services will play in meeting those needs. 

Business model innovation, then, describes the process in which an organization adjusts its business model. Often, this innovation reflects a fundamental change in how a company delivers value to its customers, whether that’s through the development of new revenue streams or distribution channels.

Business Model Innovation Example: The Video Game Industry

Amazon is not the only company known for continuously innovating its business model.

The video game industry, for example, has gone through a number of periods of business model innovation in recent years, Collier says, by envisioning new ways in which to make money from customers.

When video games were first created, the consoles that housed them were expensive and bulky, which put them out of reach of most consumers. This gave rise to arcades, which would charge customers to essentially purchase credits needed to play the games. 

As manufacturing processes and technological advancements made it easier to create smaller, more economical units, however, companies like Atari took advantage of the demand by selling units directly to the customer—a massive departure from what had been the accepted practice.

More recently, game developers have had to undergo rapid business model innovation in order to meet the evolving demands of customers—many of whom want to be able to play their games right on their smartphones. 

Originally, many companies adjusted their practices in order to put their games in this format, charging consumers a subscription fee or making them pay to unlock new levels. Some of those businesses, however, were able to innovate their business models to make gameplay free to the end-user by incorporating in-app advertising or selling merchandise such as T-shirts and plush toys. This practice, they found, was able to dramatically increase their reach, while also bringing in substantial funds from consumers.

As Collier notes, “Competitors can easily change how they price.” That’s why it’s crucial for companies to consider how their products are being delivered.

The Importance of Business Model Innovation 

Business model innovation allows a business to take advantage of changing customer demands and expectations. Were organizations like Amazon and Atari unable to innovate and shift their business models, it is very possible that they could have been displaced by newcomers who were better able to meet the customer need.

Business Model Innovation Example: Blockbuster vs. Netflix

Take Blockbuster, for example. The video rental chain faced a series of challenges, particularly when DVDs started out selling VHS tapes. DVDs took up less shelf space, had higher quality video and audio, and were also durable and thin enough to ship in the mail—which is where Netflix founders Reed Hastings and Marc Randolph spotted an opportunity.

The pair launched Netflix in 1997 as a DVD-by-mail business, enabling customers to rent movies without needing to leave their house. The added bonus was that Netflix could stock its product in distribution centers; it didn’t need to maintain inventory for more than 9,000 stores and pay the same operating costs Blockbuster did.

It took seven years for Blockbuster to start its own DVD-by-mail service. By that point, Netflix had a competitive advantage and its sights set on launching a streaming service, forcing Blockbuster to play a game of constant catch-up. In early 2014, all remaining Blockbuster stores shut down.

“Blockbuster’s problem was really distribution,” Collier says. “DVDs inspired Netflix, and the technology change then drove a change in the business model. And those changes are a lot harder to copy. You’re eliminating key pieces in the way a business operates.”

For this reason, it’s often harder for legacy brands to innovate. Those companies are already delivering a product or service that their customers expect, making it more difficult for teams to strategize around what’s next or think through how the industry could be disrupted.

“Disruption is usually then done by new entrants,” Collier says. “Established organizations are already making money.”

Business Model Innovation Example: Kodak

By focusing solely on existing revenue streams, however, organizations could face a fate similar to Kodak. The company once accounted for 90 percent of film and 85 percent of camera sales. Although impressive, that was just the problem: Kodak viewed itself as a film and chemical business, so when the company’s own engineer, Steven Sasson, created the first digital camera, Kodak ignored the business opportunity. Executives were nervous the shift toward digital would make Kodak’s existing products irrelevant, and impact its main revenue stream. The company lost its first-mover advantage and, in turn, was later forced to file for bankruptcy.

Business Model Innovation Example: Mars

Mars started as a candy business, bringing popular brands like Milky Way, M&M’s, and Snickers to market. Over time, however, Mars started expanding into pet food and, eventually, began acquiring pet hospitals. In early 2017, Mars purchased VCA—a company that owns roughly 800 animal hospitals—for $7.7 billion. further solidifying its hold on the pet market.

“Mars looked at its core capabilities, which is what corporate entrepreneurship is all about,” Collier says. “It’s about looking at your products and services in new ways. Leverage something you’re really good at and apply it in new ways to new products.”

The Role of Lean Innovation

Implementing lean innovation is advantageous. Lean innovation enables teams to develop, prototype, and validate new business models faster and with fewer resources by capturing customer feedback early and often.

Collier recommends companies start with a hypothesis: “I have this new customer and here’s the problem I’m solving for him or her,” for example. From there, employees can start to test those key assumptions using different ideation and marketing techniques to gather customer insights, such as surveying. That customer feedback can then be leveraged to develop a pilot or prototype that can be used to measure the team’s assumptions. If the first idea doesn’t work, companies can more easily pivot and test a new hypothesis.

“This is a big part people forget to do,” Collier says. “Lean design allows us to rapidly test and experiment perpetually until we come to a model that works.”

Pursuing Innovation in Business

In addition to business model innovation, companies could also pursue other types of innovation, including:

• Product Innovation: This describes the development of a new product, as well as an improvement in the performance or features of an existing product. Apple’s continued iteration of its iPhone is an example of this.
• Process Innovation: Process innovation is the implementation of new or improved production and delivery methods in an effort to increase a company’s production levels and reduce costs. One of the most notable examples of this is when Ford Motor Company introduced the first moving assembly line, which brought the assembly time for a single vehicle down from 12 hours to roughly 90 minutes.

The choice to pursue product, process, or business model innovation will largely depend on the company’s customer and industry. Executives running a product firm, for example, need to constantly think about how they plan to innovate their product.

“When the innovation starts to slow down, that’s when firms should be thinking of and looking at next-generation capabilities,” Collier suggests.

If a company is trying to choose where to focus its efforts, however, the business model is a recommended place to start.

“Business model innovation is often more impactful on a business than product innovations,” Collier says. “It’s Amazon’s business model that’s disrupting the market.”

Innovation Doesn’t Always Come Easy

While the examples above demonstrate that innovation is an important part of running a business, it’s also clear that it doesn’t always come easy. Corporate history is littered with examples of companies that were unable to innovate when they needed to the most.

Luckily, there are steps that business owners, entrepreneurs, and professionals can take to become better suited to pursuing innovation when an opportunity appears. 

Learning the fundamentals of how businesses and industries change will prove to be instrumental in enabling you to carry out your own initiatives. Assess and dissect the successes and failures of businesses in the past, and learn how to apply these valuable lessons to your own challenges. 

https://graduate.northeastern.edu/

10 Tips on Business Model Innovation

How can we start innovating on our business model?

Business Model Innovations have redesigned entire industries and there are many stories on how companies by providing something different, in a different way or to a different customer segment completely change the rules of the game.

There are many ways to explore and analyze markets and the different components of the business model to identify opportunities for innovation. Here are 10 tips on how you can approach business model innovation:

1. Create a common understanding of the existing business model

This might seem obvious but in many organizations the knowledge about how the company operates is widely distributed in the organization. A good idea is to bring together key people from different parts of the organization who understands different parts of the existing business model and the underlying reasons for why things are the way they are. Is it because it always has been in that way? Is it because it was the easiest way to do it at the time the decision was made? A great way to create a common understanding is to visualize the business model by drawing boxes on a whiteboard, using the business model canvas, or as I sometimes do; list business model components in Excel using a projector to facilitate collaboration.

2. Create a common understanding of what is core in the business model

Focusing on what a business does best is often argued the easiest and most efficient way for companies to grow and be profitable. Understanding customers' perspectives and their perception of value is fundamental to identify what is core. Perhaps it’s not what you deliver but how you deliver it, that makes people buy? - Perhaps you should deliver something else as well given your good way of delivering things? - Perhaps it’s not the gadget you sell as such, but the software interface that people like? - Could other gadget manufacturers need your better software interfaces? - Perhaps the reason someone wants to collaborate with you is because your customer relationship and contracts with a certain organization? - Could other companies be interested to get access to the same organization? Read more about identifying the core in a business model here.

3. Identify interrelationship between the different business model components

Discovering real and perceived relationships and interdependencies between different components is important to understand underlying reasons for why things are the way they are. Identifying perceived relationships is also a good way to find underlying assumptions that might be wrong. What are the underlying assets enabling key activities? For what parts of the value proposition are partners and external actors necessary? How do the customer segments affect the choice of customer relationships and delivery methods?

4. Identify drivers of change and trends affecting existing business model

Why do you need to reinvent your business model? Is it because of low cost competition? Niche actors? New actors? New technology? Changing customer behavior? Changing partner behavior? Identifying the drivers of change and trends affecting the existing business model will turn your focus to the most crucial components of your business model.

5. Analyze strengths, weaknesses, opportunities and threats

The SWOT analysis is simple yet a powerful tool to create a common understanding of the current situation and to summarize the findings from the steps above. It is often illuminating to point out what needs to be done and to put weaknesses and threats into perspective. Use precise and verifiable statements rather than lose assumptions or opinions, and prioritize to spend your time on the most significant factors. The SWOT analysis can also be used on the business models of competitors or other external actors to find new ways to compete or collaborate.

6. Analyze theoretical ideal situation and contradictions for each business model component

By exploring what would be the theoretical ideal situation for each business model component you can create out-of-the-box-ideas without being locked into existing solutions. In doing so you can also find the constraints of a business model: why can't we provide this for free? Why not instantly? Why not exactly the way the customer wants it? With the ideal situation identified, the next step is to work backwards to something that is achievable by decreasing benefits and/or increasing costs and harms.

7. Analyze external alternatives that could take each business model component closer to the ideal situation

With a rigorous SWOT analysis and Ideality analysis you are well equipped to analyze how external actors could fill in the gaps you have identified. What if X delivered this instead? What if we replaced some of our existing assets or activities with external ones at lower cost or better performance? What if we created a low cost version? A digital version?

8. Analyze what would happen if applying principles for innovation

You can use the 40 principles for innovation, based on TRIZ adjusted for business problems, to explore "what if" questions for each business component (see example in the business model innovation matrix). What if we took away something? (principle 2), turned something the other way around? (13), did something slightly less or slightly more? (16) etc. Exploring 40 principles on several different business model components is an extensive work and I find two approaches helpful; either have a session on one business model component and apply the different principles, or take a few principles and apply them on all business model components.

9. Decide on ways to explore alternative business models with limited risk

The development of a successful business model is often the result of lots of learning from lots of failures, so it is important to find ways to fail fast and cheap without destroying existing business models. To avoid failing in front of your existing customers and partners, common methods are to set up separate working groups within or outside the company and use closed focus groups, advisory boards, release limited beta versions or try out new business models in limited geographic areas.

10. Track progress and unexpected customer or partner behavior

When tracking the progress of a new business model it is important to not focus blindly on parameters such as costs and revenues, but to identify existing, expected or unexpected customer or partner behavior and iterate the business model.

http://tbmdb.blogspot.com/

Business Model Innovation: 7 Steps To Master Business Model Innovation

 

Business model innovation is the key to developing a competitive advantage.

In this guide, you will learn how to innovate your business model and I’ll uncover the common mistakes and misunderstandings that hinder most companies.

Business model innovation is about doing things differently, about changing the rules of the game.

The first place to start is to explain what is a business model. A business model is a framework for how you create value and capture value. Creating value is all about how you produce, market and deliver a product and/or service. Value capture is how you make money (revenue and profits).

business model canvas – a useful tool to help you innovate your business model

Although there is no agreed-upon definition of business model innovation, I like the explanation given by Gisen who describes it as making choices about your value proposition, revenue model, and operating model 1.

business model innovation four sections that can transform a business model

• Operating Model: Value chain, cost model and organization.
• Value Proposition: customer segments, product or service offer.
• Market Model: marketing and sales capabilities.
• Revenue Model: Financial structure including investments, cash flow and margins.

What is Business Model Innovation?

Business model innovation is the process of reinventing how you transform your organisation to more effectively compete. At the centre of business model innovation is the need to create new products, services or organisational models that improve your value proposition.

What is business model design?

Business model design is the process of creating competitive business models that deliver a strategic advantage to a company. An innovative business model has the power to disrupt a market, create a defensible moat and make above-market profits.

Business Model Innovation

Business model innovation differs from other forms of innovation due to the fact it cuts across multiple layers of a company. People, processes and the overall construction and delivery of the value proposition.

Business Model Innovation for Existing Companies (Incumbents)

Companies entrenched in their current routines, processes, culture and practices have to re-align the organisation to achieve change.

Think of a large cargo tanker at sea trying to change course. Even after the captain gives the order the time taken to change is large. The tanker is large and has significant momentum that hinders it from turning quickly.

An existing company has to change though and renew a value proposition naturally to align the company to changes in the market.

An existing company has to reconfigure the business’s underlying value creation and capture architectures and adapt, renew, acquire, or develop new resources and capabilities.

Business Model Innovation Startups

Business Model Innovation for startups begins with a clean sheet – minimal resources and the ability to turn and quickly adapt and pivot from feedback from customers.

Startups are like agile racing yachts. A small crew which can rapidly make decisions, adapt and turn outmanoeuvring larger tankers.

Disruptive startups create new markets, not just new products or services.

The Ultimate Guide To Business Model Innovation

Before I show you how you can innovate your business model I thought I’d clear up some misunderstandings:

1. revenue vs profits: revenue is generated from the sale of a product. Profits are the net amount of money earned after you pay for sales and marketing and operating costs e.g. salaries, offices, heating, operations…
2. resources vs assets: a resource is something that you use to achieve an objective whereas an asset is something of value – an asset is an accounting term for something of value e.g. land.
3. creating value vs capturing value: creating value is how you produce something that customers want to buy. Capturing value involves the pricing, method of charging and how you then earn money – the profit you make when customers buy.
4. distribution channels vs communication channels: distribution channels can be different to communication channels both are equally important. Distribution channels are how you get your product or service to the point where customers can buy e.g. on a shelve in retail or on a website store. Communication channels are how you reach your customers to inform them about your product and influence them to buy.

In 2014, I created a model of how open and social technologies could transform a business. You can see it below and also on my post social media strategy. Those early sketches have evolved over time and as a result of working with hundreds of organisations.

Early sketch of open business model innovation

As you can see, one of the main drivers of business model innovation is digital technologies which in themselves drive digital business models and new ways of producing value (or co-creating value).

In this guide, I’ll explore some of the ways you can use digital to create powerful new business models.

A Guide To Business Model Innovation

1. Why business model innovation?
2. Why some business models create a competitive advantage
3. Develop a strategy
4. Harness the Power of Business Model Patterns
5. Map your existing business model
6. Identify competitors business models
7. Use a Lean Startup Approach
8. Think Differently Using Analogy and Recombination
9. Business model innovation examples

Why The Need for Business Model Innovation?

Image from BCG report on the business model innovation performance

Repeated studies have shown that business model innovation delivers longer performance than simply creating new products or services.

• Product life cycles and design cycles are getting shorter.
• Competition is coming from unexpected places.
• Disruptions from business models that offer better customer experiences, not just simple products.
• New and emerging technologies that break industry and market norms – large efficiency gains, new data models and improved customer experiences.
• New competitors enter markets, often from surprising sources such as from emerging economies.

Digital and social trends driving the need for business model innovation

Change is the new normal. Disruptive technologies, globalization and a constantly shifting set of competitors makes it harder to compete and sustain profits.

Business model innovation is tightly related to how you design a business. Although that sounds obvious, many CEO’s and other executives treat it as though it was about products design or service design, when in fact it requires an organisational design approach.

For large organisations, business model transformations are complex change processes that require significant investments in planning and resources. The business logic is geared towards optimising the existing business model – not adapting to new environments. Overcoming the way of working, the emotional ties to existing processes and internal relationships is what holds back many companies – but it needn’t be that way.

For small innovative startups that means you can rapidly test, iterate and outmanoeuvre larger organisations who are sluggish in comparison. Startups become the disruptors leaving larger organisations the choice of either copying the new business model or buying the disruptor.

But a good business design and an innovative business model are not enough. You need to be able to sense change, adapt and be agile by having adaptive and dynamic resources.

Why some business models create a competitive advantage

All good strategies focus on how you create a competitive advantage that is sustainable. In other words, it is hard for others to replicate or imitate.

As a result, you earn more profits for longer periods of time. However, that simple explanation gives the impression that you can set a strategy and forget it. That the business environment doesn’t change much and you don’t need to adapt your strategy or business model.

The problem is that the pace of change, the business environment, is blazingly fast. Companies now operate with higher levels of uncertainty than ever before. So focusing on the wrong things leads to short terms gains but long term problems.

How To Create Your Sustainable Advantage

Warren Buffet is chairman and CEO of Berkshire Hathaway and one the most successful in the world. He advocates investing in businesses that create defensible moat. A moat is a metaphor for an enduring competitive advantage.

Learn more about how to create moats for your business by reading Why Moats Matter: The Morningstar Approach to Stock Investing.

Business Model Innovation: 7 Steps To Master Bm Innovation

Business models are harder to replicate than products or services because they involve the complex configuration of how you do things – people, operations, culture, technologies… To help guide your thoughts here are some ways to consider.

The 5 Moat Sources are:

1. Cost Advantage
2. Recurring Revenue
3. Intangible Assets (brands, patents, license)
4. Switching Costs
5. Network Effect
6. Efficient Scale

1. Cost Advantage: Change Your Cost Structure – Operating Model, Market Model…

Producing a product differently and at lower costs is not easy. However, with so many new materials and technology available there are lots of opportunities to reinvent products and lower costs.

New technologies also hit one of the trends I highlighted earlier that of personalization and immediacy. 3D printing otherwise known as additive manufacturing offers incredible opportunities to reduce carbon footprint and satisfy demand locally. While not there yet, this is a good time to consider how these technologies can shift cost structures.

Operating models can be transformed through automation. In fact, AI is predicted to reshape industries. McKinsey predicts AI-based predictive maintenance has the potential to deliver between $.5T to $.7T value to manufacturers.

Examples: Tesla going direct to market – disintermediation effect – reducing market costs. In a similar way this is the approach taken by Casper who sells beds direct to consumers.

Action for business model innovation: Explore how you can change cost structures in a market.

2. Recurring Revenue

growth in subscription services

Generating recurring revenues is vital to any business. Repeatable revenue from existing customers provides you with a base from which to grow. If you constantly have to find new customers and are a transaction-based business then growth becomes costly and difficult.

Examples: Disruptors like Google, Apple and Netflix all have substantial recurring revenue models. Most of these platform-based businesses rely on subscriptions. Google business model uses subscription business model services for its cloud offering, Google Play and many other services. Apple likewise uses subscriptions for Apple movies as does Netflix for its services.

Action for business model innovation: review your revenue model – can you harness data sources to create new services? Can you move to a subscription service?

3. Intangible Assets

Brands become a powerful way to secure repeat business and gain dominance in a market. Carefully crafted brands that design powerful customer experiences are a winning force in today’s economy. Brands become the go-to product or service. To cultivate a brand though you have to know your customers, harness data and insights to be able to peel away the reasons why they buy and how you solve their problems.

Patents are another moat that can be used. If you consider many of the top technology companies such as IBM they consistently file hundreds of patents each year. Even if you are not an international business you can use licenses to create a revenue stream and protect your business.

4. Switching Costs

Switching costs are the pains a customer or client experiences when they move to another brand or supplier. Those pains are often costly in terms of time, hassle, money, or risk and therefore deter people from making changes.

It used to painful to switch electricity suppliers but thanks to new intermediary businesses this is no longer the case. Swapping banks used to be hard and even though it is easier, the problems associated with it still prevent many from switching. Switching costs can be

Examples: Apple users if they were to switch would have to learn a new operating system and in many cases use new software products. These switching costs prevent many from changing. However, these pains can be offset by a lower price and in some cases that is where Apple has lost market share.

Action for business model innovation:

1. Decrease the cost your customer must pay to switch to your product.
2. Increase the cost your customer must pay to switch to competitors.

Switching costs doesn’t mean you make it difficult to move away from your services e.g. you don’t offer data migration services. The concept is the opposite of that and involves looking at making the value you offer so strong that customers couldn’t get the same value elsewhere easily. As an example, if you offer a superb financial accounting software and want to lower switching costs then you would make it easy to onboard new customers and offer free training and courses. Of course, if your software is easy to use then this becomes a powerful mechanism to compete.

5. Network Effects

The network effect is when the value of a product or service increases as more customers use that product or service. You can read more about network effects and how they apply to platforms.

Quite often it is easy to understand how network effects work. Take for instance Facebook and other social media platforms. The more people use these platforms the more attractive they become to users and to indirect users such as advertisers.

Example: Tencent is a dominant company in China with a raft of powerful brands such as QQ Music, Kugou and Kuwo. What makes Tencent powerful is that it owns so many different platform businesses.

Action for business model innovation: what can you scale through network effects? are there online communities you can generate that would enhance the business? Can you create an ecosystem of complementary products or services?

5. Scale

economies of scale examples

I’ve mentioned scale a lot through other posts and the benefits that come to scaling a business. Essentially, you lower your fixed costs relative to your revenue and thus can either offer a lower price to the market or earn more profits – the ultimate goal being able to do both.

3. Develop Your Strategy

A business model isn’t a replacement for a strategy. You need to understand the broader business environment trends within a given market. Ignoring a trend or issue and not fully understanding the competitive landscape will mean you are developing your idea and strategic hypothesis in a bubble.

Using a PESTEL analysis and Porter’s five forces are still useful frameworks to understand the underlying drivers in a market.

Some startups say to me that there is nothing like there idea of product, however upon closer inspection and few clicks on Google and you can usually find what people are already using or potentially some other startups occupying and developing a similar solution.

Investors will expect you to have at least understood your potential competition or who could easily replicate your model e..g. a company that has large resources and may do this to defend its position.

4. Harnessing Business Model Patterns

The Business Model Navigator Patterns A Must Read for Business Model Innovation

Business model patterns are a useful way to understand different ways you can harness business models based on proven patterns that are being used by other companies.

An important point here is that some patterns are complementary to each other. As an example, a two-sided market and subscription pattern enhance each other.

You can use patterns to identify trends in your existing market as well as build out ideas for new business models.

5. How to map an existing business model

free business model templates

Business model innovation involves being different, creating something new. If you’re an existing business then the first thing is to understand and map you current business model.

Simply download some business model templates and then use these to consider how your business works and creates value.

6. Identify Competitive Business Models

This stage lays the foundation for you to be creative. It is the groundwork you need to do that then allows you to unleash your creative ideas and come up with something new.

In any given industry, a dominant business model tends to emerge over time.

Usually, this is because it works, delivers profits and satisfies customers needs.

This is not to say it can’t be changed but you need to understand the costs associated with disrupting markets and grabbing customers.

By understanding the main business models in a market you have the ability to creatively think around the value proposition, operating model and revenue model. I’ll talk more about the creative piece in a bit.

7. The Startup Approach – The Lean Business Model

8. Creative Thinking Using Analogy and Recombination

business model innovation design thinking

the Power of Analogy

business model innovation using analogy

A lot of successful companies that we think of as disruptors made use of analogy.

They adapted business models from other industries and applyied them to their own.

The founder of Graze based this business model on his previous company LoveFilm.

Similarly, Nespresso adopted Gillette’s razor blade model.

The value of analogical thinking in the business model design is that they help deal with complex problems and simplify ideas.

Recombination The Driver of Digital Innovation

business model innovation recombination

New and emerging technologies present endless ways to create novel new business models. These disruptive technologies allow you to reinvent and reconfigure the operating model. market model and the revenue model.

In the example above I have created some basic value elements that you could consider, however, there are lots more available. Remember that the value proposition needs to ultimately align with a customer and they need to understand why they should buy – that is often not the technology but what it does for them.

Summary of Business Model Innovation

I haven’t talked about platforms or specific technologies, these are just resources that can help you define new models to organize work, to create products and services that offer new value in a market.

Try to reinvent and rethink your business model. The greatest challenge today starts not with just pure profit model, but with the shared concept of value, that means you offer value through considering the wider impact of your business idea on society, the planet and the people you employ.

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