B U S I N E S S M O D E L I N N O VAT I O N
D ATA S H E E T
Why Business Model Innovation does matter ?
Business Model Innovation is the new Balanced-Act of modern Corporations in the 21st century. It can be articulated around three core transformations: Tension in capital Funding, new market dynamics, and market capitalization.
Tension in Capital Funding
Summary • Tension in Capital Funding • New Market Dynamics • Market Capitalization
In turbulent times, like the current economic recession, companies tend to focus on drastic cost cutting initiatives to put them on a more solid economic footing. While it can be perceived as making good business sense, it reduces significantly the capacity of those firms to innovate (R&D spending being under a lot of scrutiny). The question becomes simple: how to innovate without spending a large amount of money in R&D? A company likes Apple has largely contributes to empower business model innovation over product or process innovation. The interesting point is that Apple's R&D spent (as a percentage of sales) is half of its competitors, and yet providing incredible value for its customers, with an impressive level of operating margin. Alternatively companies have generated an important volume of innovations over the years that are currently sleeping in engineering folders. Marketing, at that time, could not figured out serious market opportunities. Well, it might be a good time and a good idea to start looking back at these potential treasures and deployed them within an innovative business model. It might yield unexpected benefits and a source of new and rapid revenue streams. Of course engaging in business model innovation is not costless, however compared with the level of capital resources required to fund substantial R&D, it might look like an interesting alternative.
"50,98% of innovations come from Business Model." Source : OCDE 2008
BUSINESS MODEL INNOVATION
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