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Business models<\/strong> age faster than ever before.\u00a0They are challenged by increased marketplace volatility and the rising diversity of attractive customer segments.<\/span><\/p>\n What is the<\/b><\/strong>\u00a0solution<\/b><\/strong>? <\/b><\/strong><\/span><\/p>\n Best addressed is this challenge with business model innovation<\/b><\/strong>\u00a0an important strategy<\/strong> for driving value-creating growth<\/strong>. It can be deployed to both defend and disrupt. It helps to decline competitiveness and to seize new opportunities to disrupt.<\/span><\/p>\n In today\u2019s blog post, I will share more about b<\/b><\/strong>usiness model innovation <\/b><\/strong>which\u00a0is a design thinking-based approach<\/b><\/strong>\u00a0and is focused on business model design.\u00a0<\/span><\/p>\n Overview<\/b><\/strong><\/span><\/p>\n What is business model innovation?<\/b><\/strong><\/span><\/p>\n Business model innovation describes the innovative processes of how an business creates, delivers and captures value<\/b><\/strong> as opposed to how to create a new product or service. It enhances the advantage and value creation by making mutually supportive changes both to an company\u2019s value proposition to customers and to its underlying operating model.<\/span><\/p>\n At the core it’s about fundamentally rethinking your business.<\/b><\/strong><\/span><\/p>\n Why is business model innovation so important?<\/b><\/strong><\/span><\/p>\n The average business model lifespan has fallen dramatically in the past decades. As a result, business model innovation supports companies to reinvigorate and to drive growth or defend against industry disruption or decline.<\/span><\/p>\n Product and service innovation are important, but business model innovation can deliver more lasting competitive advantage, especially in disruptive times.<\/span><\/p>\n What questions support this process?<\/b><\/strong><\/span><\/p>\n There are a several critical questions<\/b><\/strong> companies need to answer before they determine how to drive growth through business model innovation. Good questions to start with are:<\/strong><\/span><\/p>\n To answer those questions it is important to understand that there are four distinct approaches<\/b><\/strong>\u00a0in designing the path to growth<\/strong>.<\/span><\/p>\n What are the four approaches to business model innovation?<\/b><\/strong><\/span><\/p>\n Understanding the four distinct approaches to business model innovation can help to make effective choices in designing the path to growth:<\/span><\/p>\n The reinventor approach <\/b><\/strong>\u00a0<\/span><\/p>\n Application<\/strong>: Fundamental industry change, e.g. new regulations.<\/span><\/p>\n In this situation, the company must reinvent its customer-value proposition and realign its operations to profitably deliver on the new superior offering.<\/span><\/p>\n The adapter approach<\/b><\/strong> <\/span><\/p>\n Application<\/strong>: The<\/span> current core business is unlikely to combat fundamental disruption.<\/span><\/p>\n Adapters explore adjacent businesses or markets and must build an innovation engine to persistently drive experimentation to find a successful \u201cnew core\u201d space with the right business model.<\/span><\/p>\n The maverick approach <\/b><\/strong><\/span><\/p>\n Application<\/strong>: Scale up a potentially more successful core business.<\/span><\/p>\n Mavericks (e.g. startups or innovative established companies) 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.<\/span><\/p>\n The adventurer approach<\/b><\/strong>\u00a0<\/span><\/p>\n Application<\/strong>: Expands the business by exploring or venturing into new or adjacent territories.<\/span><\/p>\n This approach requires an understanding of the company\u2019s competitive advantage and placing careful bets on novel applications of that advantage in order to succeed in new markets.<\/span><\/p>\n Summary<\/b><\/strong><\/span><\/p>\n\n
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