2. Where Can We Innovate?
• Companies dont tend to push • Broadens the scope of innovation
the boundary of innovation.
Products, Services,
Technology
Business Model
Innovation(BMI)
• BMI is about creating new business
or bringing more strategic variety
into existing business. 2
3. What Is Business Model?
Create Deliver Extract
Value Value Value
3
4. Unpacking The Business Model
Customers, Market Segments,
Who do we serve?
Geographies.
What do we
Products, Services, solutions
provide?
How do we provide Distribution Channel, Value chain,
it? Partners, Process and activities
How do we make
Cost , Price
money?
How do we
Competitors, Customer experience
differentiate?
4
6. An Example: University of Phoenix
Focused explicitly on several components of Business Model.
Who are our customers?: 18-22 years students.
Which geographies we serve?: Single campus in Phoenix.
How do we deliver?: Class room teaching.
Then the big question:
Can things be done radically differently?
They ended up with entirely new business model.
Who are our customers?: Midcareer adults.
Which geographies we serve?: Campuses in business parks across USA.
How do we deliver?: Web based learning. 6
7. Think Holistically
• Each component of Business Model is an opportunity of innovation.
• Challenge orthodoxies.
• Avoid innovation “blind spots”. E.g. Nokia
– Too much focused on technology innovation that they forgot about outside
appearance.
7
8. How To Stretch Business Model?
• Orthodoxy insight
– Think about deeply held dogmas related to each component of Business Model.
• Discontinuity insight
– Can we leverage from fundamental changes already at work in external
environment?
• Core competencies and Strategic Assets
– Can we combine other companies competencies to improve our Business Model?
• Customer insights
– How can we fulfill customers needs that are currently unaddressed? 8
9. Conclusion
• Business Model innovation can bring “better” innovation than
products and services.
• Broaden your scope of innovation by including all aspects of
Business Model.
• Keep challenging your existing Business Model.
• Focus on creating new Business Model as well as evolving existing
Business Model.
• Employees need to have a clear understanding of their company’s
9
Business Model.
