Business model innovation
The business model is the heart of any business as it depicts how the firm operates both internally and with its main stakeholders. Altering a firm’s existing business model is the main method for translating strategies into operational work. No new product idea will generate cash flow unless it is accompanied with a suitable business model. Unfortunately, all business models first become contested, then commoditised and finally obsolete – sooner or later. Therefore all firms must continuously innovate their business models in order to remain competitive.
Vectia helps our clients in business model innovation particularly in the following situations:
- Translating a new strategy into action
- Creating a business model for an emerging product or service idea
- Differentiating business models for different business lines and making multiple parallel business models manageable under the same management
- Improving unsatisfactory performance in terms of organisational effectiveness and efficiency
- Finding synergy sources
Sustainable competitive edge through business model innovation
We believe that in the 21st century, the most sustainable competitive advantage does not come from cost leadership or superior products but from the ability to design effective and efficient business models. The “in vogue” products and sources of cost advantage come and go, but some firms maintain consistently high performance through continuous innovation of their business models. Additionally, business model innovation is usually more difficult to copy than service or product features. Hence, business model innovators achieve a more sustainable competitive edge.
When innovating business models the following topics are usually covered:
- Visualising the current business model to enable intelligent managerial discussion
- Innovating potential ways to develop the business model
- Selecting and describing the main business model development areas
- Assessing the potential obstacles hindering business model development
- Creating a roadmap for implementing the new business model or business model changes