Business Model Innovation

Business model innovation is the art of creating advantage and value creation by making mutually supportive changes both to an organization’s value proposition and to its underlying operating model. A modified value proposition can address the choice of target customer segment, product or service offering, and revenue model. The new operating model can focus is on driving profitability, competitive differentiation, or topline growth.

Not all business model innovation efforts are alike. There are three distinct approaches to business model innovation that can help organizations make define their growth path. Each approach has strengths and weaknesses and the right approach depends upon the organization's goals and environment.

The pioneer approach seeks to expand the scope of the business by exploring new or adjacent geographies or market segments. This approach relies on the company’s existing competitive advantage and places careful bets on their relevance to new markets.

The disrupter approach uses business model innovation to challenge the traditional value proposition in the core business. Disrupters develop new core advantages, which could be rooted in business or technology, to set new standards in their industry. This requires an ability to radically rethink how value is generated and delivered to customers.

The adapter approach is deployed to address a fundamental challenge, such as technology disruption or new regulation, that causes the existing business model to slowly deteriorate. The company must adapt to external forces to reinvent its value proposition and operational model to sustain profitably and growth.

DURATION

Engagements can be short (within one month) or long (several months) depending on the object and scope.

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