Hitendra Patel

Business Model Innovation Demystified

All business models are not alike. Unfortunately, many executives look at their own firm’s business model as a given—as the natural, the best, or perhaps even only way to make money in a given industry. But, in reality, there are many, many business models that executives have to choose from. Understanding that there are many instead of one or two models can bring people to a new view of how they do business: that firms can be very creative in the way they can configure their entire business. So, in addition to innovation in products, services and processes, companies need to explore business model innovation — an often untapped resource for creating real value.

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Business Model Innovation

Who would think that the automotive industry is innovative?  The successes of multiple players in the automotive industry players offer a good case in point of the power of business model innovation. Companies like Tata have borrowed from innovation leaders like Ikea to deliver auto assembly kits that can be assembled at much lower costs in local villages to help the Nano break through the $3,000 barrier. Tesla has borrowed business models from the solar lighting industry and experimented with selling their all-electric vehicles with solar carports to take vehicle power totally off the grid and reduce total auto life cycle costs.

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Blended Innovation Strategy: A Powerful Approach to Major Business Successes

Many business people live in a contradiction when it comes to understanding an important aspect of business and technical innovation in Japan and Korea. On one hand, they marvel at the business success stories found in corporations like Honda or Sony. On the other hand, they denigrate or even dismiss those same successes by calling them names. These achievements are often put down as “copycats”—products and services very similar to those originally created by innovation departments in western corporations.

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