Business Model Innovation : Ever since IBM's Global CEO Study 2006, Business Model Innovation is a sexy topic. The study revealed that most CEOs felt Business Model Innovation is becoming the new strategic differentiator. In the financial analysis for the study, companies that have grown their operating margins faster than their competitors were putting twice as much emphasis on business model innovation as underperformers. Ever since this study innovation in a company's core processes and functions are not fashionable!
But there is nothing new here – Biz model keep changing in various industries. Famous legend is how Dell shocked the market with its Direct selling model. Another great example is Bharti - they discarded the sacred ARPU telco model and focussed on minutes and network utilisation, and outsourced almost everything and focussed on the customer.
Many say Business Model Innovation is going to be the future as ‘Technical Innovations’ are dying ( Remember the quote of - Charles H Duell,Commisioner,US Office of Patents 1899 “Everything that can be invented has been invented”) Not sure though :) But if you combine ‘Business Model Innovation’ and ‘Technical Innovation’ you have a blockbuster! Google is the best example.
VCs love Business Model Innovation ! I am told that in US a dating company is offering a ‘rent a dog’ service for single souls to impress others! If you cant afford (real ones!) a Prada or Louis Vuitton bag it is okay, you can rent from http://www.bagborroworsteal.com/ for a small fee. Endless possibilities in Business Model Innovation, but obviously ‘god is in execution’.
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