Three ways to successfully innovate your business model

Abstract

PurposeThe purpose of this paper is to find out what exactly the term business model innovation encompasses and what type yields the best results.Design/methodology/approachIBM Consulting researchers first identified the main types of business model innovation, which can be used alone or in combination. They then compared these three types of business model innovation across 35 best practice cases.FindingsThe study found that all new business models can be classified into three types: innovations in industry models; in revenue models and in enterprise models. A key finding was that each type of business model innovation, with the right strategy and strong execution can generate success.Practical implicationsResearchers found that while network plays are being used by diverse companies in different industries and regions and of varying age, size and other characteristics, this tactic has been a particularly useful strategy for older companies.Originality/valueThe study found that best business model innovation strategies provide a strong fit between the competitive landscape for a particular industry and the organization's strengths, shortcomings and characteristics such as age and size.