What is Business Model Innovation video

People have been talking about business modelS more and more in recent years. But what is a business model? A business model is a way to conceptualize and understand organizations as systems that have common components. To understand an organization’s business model, think about these eight things:

1. What value it creates
2. Who it serves
3. What sets it apart
4. What resources it depends upon
5. Its important relationships
6. The channels through which it delivers value
7. How it generates revenue
8. What its major costs are

In summary, an organization’s business model is:

• What value it creates
• Who it serves
• What sets it apart
• What resources it depends upon
• It’s important relationships
• How it delivers value
• How it generates revenue
• What its major costs are

But what is business model innovation? Business model innovation is not just about changing what you sell. Business model innovation is about re-evaluating an organization’s entire business model, thinking about:

• Who you are
• How you work
• With whom you collaborate
• What value you create
• How you capture that value
• How sustainable you are

And because today’s competitive business environment requires constant innovation, managers must continually re-evaluate their organization’s business model. Modern managers must become adept at ‘ambidextrous thinking’; exploiting their current business model whilst also exploring alternative business models. Explore and exploit. Remember: in an era of rapid change, organizations must adapt or die. So keep exploiting and exploring!