There are many types of business innovation frameworks, which are derived from the three main areas that businesses should focus on and invest in. And these are offering, business model, and revenue model.
Since the topic of business innovation appeared many years have gone by. But the power of it remains untapped for the majority of business owners, especially business model innovation.
We admit the business model innovation is the hardest to reconfigure… but the most valuable to focus on. The business model innovation yields the highest return – in contrast to product innovation, which is so popular but has the lowest return.
Why does business model innovation gives bigger returns? Mostly because business models are harder to replicate than product features. Product innovation is a weaker competitive advantage metric. Everyone can copy it and leverage it in their business. We are sorry to tell you this. We know that many businesses are built around this fresh, new, innovative product. But this really doesn’t guarantee any positive business impact. Did we just break your dreams?
Innovating for a better tomorrow becomes a huge movement all around the world. Crafting innovation that can actually help people, instead of making them more lost, and addicted to today’s world treasures, has become a goal for many.
This involves looking for innovative business models, created to achieve the balance between improving financial performance and positively impacting the world. Many raising brands are boosting sustainable consumption and encouraging community-based initiatives. Especially now, after (during) the pandemics. But the business model innovation can envisage a multitude of revenue stream channels, improving the company’s overall financial performance. Which is the ultimate advantage for businesses of all sizes, right?
Organizations who are seeking to drive breakout growth, reinvigorate a lagging core, or defend against industry disruption or decline should think about business innovation. It is particularly important in disruptive times.
Business model innovation is enhancing advantage and value creation by making simultaneous—and mutually supportive—changes to the organization’s value proposition (choice of target segment, product or service offering) and to its operating model (on how to drive profitability, competitive advantage, and value creation through processes, network).
With that being said let’s talk about common concerns. While working with numerous businesses we found a few questions that almost always appears. These are:
– What type of business model innovation will help us achieve higher performance?
– How do we avoid jeopardizing the core business?
– How do we build the capability to develop, validate, and scale new models?
Remember this, not all business model innovation efforts are alike. You can approach it differently.
The reinventing approach
It is implemented at fundamental industry and market challenges, such as commoditization or new regulation, in which a business model is deteriorating slowly and growth is uncertain.
In this situation, you must reinvent the company’s customer value proposition and realign its operations to profitably deliver on the new superior offering.
The adapting approach
This approach is used when the current core business, even if reinvented, is unlikely to combat fundamental disruption.
In this approach, you explore adjacent businesses or markets, and in some cases, you exit their core business entirely.
You must build an innovation engine to persistently drive experimentation to find a successful “new core” space with the right business model.
The maverick approach
It deploys business model innovation to scale up a potentially more successful core business.
You employ their core advantage to revolutionize their industry and set new standards. This requires an ability to continually evolve the competitive edge or advantage of the business to drive growth.
The adventurer approach
This approach aggressively expands the footprint of a business by exploring or venturing into new or adjacent territories.
This requires an understanding of the company’s competitive advantage and placing careful bets on novel applications of that advantage in order to succeed in new markets.
Innovation doesn’t always come easy
While the arguments above demonstrate that innovation is an important and beneficial part of running a business, particularly in disruptive times, it’s also clear that it doesn’t always come easy.
Eager to explore ways to make your business model more disruptive and impactful?
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