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D ATA S H E E T
BUSINESS MODEL INNOVATION
Why Business Model Innovation does matter ?
Tension in Capital Funding
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.
Therefore, it might be a good time and a good idea to start looking back at these potential treasures and deploy 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.
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Summary
• Tension in Capital Funding
• New Market Dynamics
• Market Capitalization
"50% of innovations come from Business Model."
Source : OCDE 2008
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.
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
BUSINESS MODEL INNOVATION
‣ Last but not least, the increasing focus on providing individual Value Proposition with the raise of customer data analytics and censored-based technologies.
Innovation can be inside every components of a business model. Moreover, the way we assemble these elements is in itself an innovation.
We can see the potential of this approach and why it is so critical today for organizations to develop new competencies in this field.
Market Capitalization
Financial analysts today favor companies that are innovating in Business Model and sanction the ones that haven't proved the scalability and sustainability of their value proposition.
Apple reached in october 2012 a record market capitalization of $ 588 B. Conversely, Facebook was criticized on the viability of its business model and market cap. plunged to a level of $ 42,2 B(oct 2012).
It becomes clear that financial markets, are considering business models innovation as a key enabler of future performance of firms. They are today, praising leaders who demonstrate important maturity in this strategic area.
We are leaving incredible times, that pushed humanity to reinvent itself on more constant basis.
With Business Model Innovation, industry leaders and entrepreneurs have the capacity to create exceptional value for the good of all.
"Business Model Innovation is the new balanced-act of modern Corporations in the 21st century."
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New Market Dynamics
During the past century, innovation rate has grown exponentially creating important turbulences in market dynamics. Conversely, this pace of technological innovations has created an unprecedented level of opportunities to develop new business models.
We can observed today, growing torrents of structural market's changes. This level of uncertainty reinforce the necessity to approach innovation in a much broader way (rather than the sole technological lens.)
‣ Developing nations, becoming an attractive source of new revenues for organizations and a new Customer Segment.
‣ New consumers behavior requiring a rapid adaptation of the Customer Relationship,
‣ Availability of mixed Channels entailing a perfect coordination of the go to market strategies,
‣ Regulations (or lack of) with the power to affect the ROI of entire industries,
‣ Volatility of resources redefining the Cost structure of companies,
‣ A collaborative economy shuffling the concept of Partnership,
‣ The duality of physical and virtual assets in the consolidation of strategic Resources,
‣ The commoditization of yesterday core Activities challenging workforce organization ,
