In those cases where a new business model has been successfully developed, companies gain on average, a 6% increase in return on investment, compared to other forms of innovation, such in product or process innovation (BCG 2008). Therefore, the innovation of the business model plays a key role in the current and future success of companies.<\/p>\n
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That is why many managers think that to achieve competitive advantages, business model innovation is more important than other types of innovation. More than 90% of the CEOs surveyed in a study conducted by IBM (2012) stated that they planned to innovate the business model over the next three years. However, good intentions are not enough.<\/p>\n
When it comes to moving to action, problems surface. Few managers can explain their company\u2019s business model off the top of their head and, even less so, define what a business model really is. It is still very rare to find companies with teams dedicated to innovating the business model, or to have established processes for that purpose. Given the relevance of this issue, the lack of institutionalization is surprising, although if you consider the complexity and confusion surrounding the issue, it is understandable.<\/p>\n
Business model<\/strong><\/p>\n Essentially, we can say that a business model is the way in which companies create, deliver and capture value. Hence, this is the business logic, and it is always the result of a series of strategic reflections and decisions.<\/p>\n To describe a business model, we can use conceptualization based on five components: customer segments, value proposition, value configuration, value network and value capture.<\/p>\n Transforming the business model <\/strong><\/p>\n In recent times, especially over the last decade, changes in the environment have accelerated dramatically. Some of the drivers of these changes are factors, such as digitization, changes in customer preferences, regulatory changes, the entry of new competitors, or globalization.<\/p>\n All this has generated a transformation in the way many companies or their business models compete. Therefore, the transformation, or innovation, of established business models is becoming a fundamental aspect to guarantee the competitiveness of companies.<\/p>\n However, companies portray different attitudes towards this phenomenon. There are various approaches on how an established company initiates an innovation process of its current business model:<\/p>\n It is important to highlight that when we talk about creating new business models, we must differentiate between two different situations: 1) designing a business model from scratch, 2) transforming an existing business model.<\/p>\n These two situations entail considerable differences. For example, for transformation, it is assumed that previous business model exists, so the challenges that arise are for existing organizations, such as organizational inertia, resistance to change, internal vision, fear of cannibalization, or aversion to risk; whereas such challenges are not relevant for start-ups. This means that many transformation attempts do not achieve the expected objectives.<\/p>\n These challenges arise throughout the innovation process of the business model, either in the design stage or in the implementation stage. Taking them into account and responding to them is vital for a successful initiative.<\/p>\n When it comes to moving to action, problems surface. Few managers can explain their company\u2019s business model off the top of their head and, even less so, define what a business model really is.<\/p>\n","protected":false},"author":2,"featured_media":1921,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[350],"tags":[82,229,250,113],"class_list":["post-5372","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-hr","tag-cegid","tag-future-of-work","tag-global-hr","tag-hr-blog"],"yoast_head":"\n\n
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