Business model buzz
Author Kimmo Koivisto
Published on March 22nd in categories Blog.
There is a lot, maybe more than ever, buzz about firms striving to innovate their business models. Competing on superior products alone does not suffice anymore as everything can be copied so quick. So changing the business model for new growth is seen as a way to have more sustainable edge as it is much more difficult to copy. But, if copying a business model is difficult, so is inventing it as well as implementing a new business model.
Luckily there are brave and ambitious leaders in eight companies with whom we have put our heads together to invent new ways on how to innovate new business models. The themes of the project are around distributing activities in a new way in the co-creation network and creating new earnings models how the value is shared as the boundaries between different actors become blurred. And this is probably the easy part, as a majority of the companies are telling that the real challenge comes in when implementing a new model with all the complexities involved.
Despite the challenges related to changing business models, there are quite a few really exiting cases we can identify and explain afterwards. One of my favorite new business models is the concept of Chemical leasing (http://www.chemicalleasing.com/). The idea of chemical leasing is to turn around the traditional model, where the chemical suppliers’ interest is to maximize the consumption of their chemicals to a new model where the chemical suppliers interest is to maximize the benefits obtained from their chemicals while minimizing the consumption of the chemical itself. All this can be achieved through a small change in the business model, where the customer pays for the benefits from the chemical and not the substance itself. The chemical consumption becomes a cost rather than a revenue factor for the chemical supplier. A fantastic new model that brings advantages for all partners involved – and even those indirectly involved as our nature is preserved.
As seen, it is relatively easy to explain new business models that have taken place. But the “how to” questions remain: How to identify new business model innovation patterns? How to implement new or refined business models? Around these questions I hope I can share more insight with you later this year. Stay tuned.