Innovative Business Model

1262 Words6 Pages
Company`s success largely depends on an business model, not solely on products and/or services. Innovative business models have serious influence on industries, but also may significantly contribute to the company`s value. In the past decade, companies do not tend to be business-model related. Innovation investments at global companies are usually not focused on developing new business models, but a significant number of executives believe that business model innovation is becoming more important over product or service innovation for the success of the company. (Johnson & Christensen, 2008, p. 2) In 2008, IBM conducted the survey which resulted in the need to adopt the business models. (Johnson & Christensen, 2008, p. 3) Some CEOs are working…show more content…
To deliver a value that can be repeated and that can increase in scale, companies have to have good operational and managerial processes. Tasks such as manufacturing, budgeting, developing, trainings, services and sales, as well as company`s metrics, rules and norms, may represent key processes. The building blocks of any company is consisted of customer value proposition, profit formula, key resources, and key processes. The first two define a value for the customer and the company, while the second two describe how to deliver a value to the company and customer. These four elements are interdependent. (Johnson & Christensen, 2008, p. 4) First a clear customer value proposition has to be identified, and then it is possible to invent or reinvent a business model. It also has to be precise, though it is often difficult to deliver a value proposition to get the job done perfectly, because companies focus on many things, instead on a single job, actually a solution to the problem. The authors propose paying attention to four problems when crating a precise customer value: insufficient wealth, access, skill or time. (Johnson & Christensen, 2008, p.…show more content…
It may happen that business models are not understand properly nor the time for the change of the business model. To help it understand, the authors developed the four elements of a business model creating a new value, meeting the customer need, doing a job or offering a solution to the problem. These four elements are customer value proposition, profit formula, key resources and key processes. These elements are interdependent. The first two define a value for the customer and the company, while the second two describe how to deliver a value to the company and customer. (Johnson & Christensen, 2008, p.
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