Could Business Model Innovation be your lifeline in rapidly changing market?3 min readReading Time: 3 minutesReading Time: 3 minutes
In a rapid change era, the concept of business model innovation has emerged as a key strategy for maintaining a competitive edge and driving business growth. This form of innovation is crucial due to the drastically shortened lifespan of business models over the past 50 years, down from 15 years to less than five. Thus, it has become an essential capability for organizations seeking growth, revitalization, or defense against industry disruption. Our experts say that a single innovation can have 30 different models.
Business model innovation is the process of reconfiguring existing technologies, products, or markets to deliver enhanced value. This strategy involves subtle shifts that are often unnoticed by competitors, making them difficult to replicate. This transformative practice is not just about developing new products, but involves a systemic approach to enhancing profitability and productivity by modifying a business’s core decision-making processes. By reevaluating factors such as product offerings, decision-making procedures, and risk management, companies can effectively recalibrate their business models for improved revenue, cost-efficiency, and risk mitigation.
Determining the optimal mix of products or services is a critical aspect of business model innovation. Companies can adopt different strategies to address this challenge. They can choose to focus narrowly on a specific product or service, exploiting predictable demands and stable revenues. Another strategy involves identifying commonalities across products or services and utilizing shared components or capabilities to reduce demand variability and increase flexibility. In essence, business model innovation can be a game-changer, enabling businesses to thrive amidst uncertain demand and increasing competition.
Business model innovation empowers companies to emerge as significant and influential players, even if they are not creating something entirely new themselves. Instead, they can leverage innovations made by others to create and capture value. It’s about reshaping how business is done, introducing novel ways of delivering existing products or services that can drastically improve profitability and productivity. However, the question remains – how to create and capture value through business model innovation? The answer lies in understanding the current market trends, customer needs, and how the innovation aligns with these. It’s about creating a unique value proposition and effectively delivering it to the right audience.
Meet experts who can guide you on this journey and help your business succeed through strategic and impactful business model innovation:
Rita McGrath, Strategy Professor at Columbia Business School
Rita is renowned for her focus on strategy and innovation in uncertain and volatile environments. Her unique, sometimes provocative insights are sought by leading organizations worldwide. Recognized by Thinkers50 with the #1 Strategy award, Rita has authored several best-selling books including “The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business,” and is one of the most widely published authors in Harvard Business Review. Prior to joining Columbia Business School in 1993, Rita held various roles including IT director and founder of two startups. She is also an active social media influencer, recognized by Fast Company as one of the 25 smartest women to follow on Twitter.
Serguei Netessine, Professor of Operations, Information and Decisions; Vice Dean, Global Initiatives at The Wharton School
Serguei has an impressive global footprint with his experiences spanning Russia, USA, France, and Singapore. Various government bodies and Fortune 500 corporations such as Lockheed Martin, Procter & Gamble, McDonald’s, and the U.S. Air Force actively pursue his cutting-edge insights, attributed to expertise in business model transformation and operational excellence. In addition to his influential roles in academia, Netessine is an active angel investor and serves on advisory boards of several start-ups, showcasing his dedication to fostering innovative business practices and entrepreneurship.
Shahzad Ansari, Professor of Strategy & Innovation at Cambridge Judge Business School Executive Education
Shahzad focuses in his research on institutional processes, diffusion of practices, technological and management innovations, and value creation. He has a reputation for strategic management and social innovation, demonstrated through his contributions to organizations like McKinsey, Airbus, Shell, and British Telecom among others. With numerous publications in leading academic journals, Ansari also serves on their editorial boards and is a distinguished member of the Erasmus Research Institute of Management.