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Business Model Innovation Management
Business Model Innovation Management
Business Model Innovation Management
• Business Model Innovation Management is about shaping and adjusting the basic structure
of a business to create new and valuable offerings. The goal is to tap into fresh market
opportunities, gain a competitive edge, and find innovative ways to make money, deliver
products or services, and provide value to customers.
EXAMPLES
1. Netflix: They used to mail DVDs to people. Then they started letting people watch movies and
shows online instantly instead. This change helped them reach more customers and become a big
name in streaming.
2. Apple: They used to just sell computers. But then they made iPods, iPhones, iPads, and online
stores like iTunes. Now, they have a whole system where all their products work together. This
change made people stick with Apple products and brought in more money.
3. Airbnb: Instead of staying in hotels, Airbnb lets regular people rent out their homes or rooms
to travelers. It's like renting a place from a friend instead of a hotel. This idea made travel cheaper
and more personal for people, and it made Airbnb a big deal in the travel industry.
• Service Innovation Management is all about enhancing products and services to better meet
customer needs. The focus is on identifying opportunities to improve how services are
delivered, enhancing the overall customer experience, and expanding service offerings to
provide extra value. In essence, service innovation aims to transform how customers are
served, creating value for them, and generating revenue for the company. By introducing
new service innovations, a company can boost revenue through increased spending from
existing customers, building a positive company image, and gaining referrals.
• Service Innovation Management is like making your services better to make customers
happier. It means finding ways to improve how you provide services, making customers
like it more. When you do this, customers might spend more money, tell others about your
good service, and give your company a better image. It's all about making things better for
customers and the company.
EXAMPLES
1. Online Customer Support Chat: Instead of just having a phone number, companies started
using online chat to help customers. This made it easier and faster for people to get assistance.
2. Fast Food Drive-Thru: The introduction of drive-thru service in fast-food restaurants is a
service innovation. It allows customers to get their food quickly without leaving their cars, making
it more convenient.
3. E-books and Audiobooks: Instead of only selling physical books, companies like Amazon
innovated by offering electronic books and audiobooks. This made it more convenient for readers
who could instantly access their favorite titles.
4. Subscription Services (e.g., Netflix, Spotify): Companies moved from selling individual
products to offering subscription services. For a regular fee, customers get access to a variety of
movies, shows, or music, providing ongoing value.
5. Contactless Payments: The introduction of contactless payment methods, like using your
phone or a card without swiping, is a service innovation. It makes transactions quicker and more
efficient.
• An interesting thing about service innovations is that they are often combined with other
types of innovations. For example, if you are a customer of Tim Hortons then you may
have used their loyalty program. When you place a product order you gain points and when
you get enough points you can use those points to purchase a product. The app is a service
innovation for customers as it improves the customer experience and adds value to their
transactions. The app is also a technological innovation as well as a process innovation for
the company. When customers use the points program it changes the payment process for
staff and the technology integrates with the payment system which allows the company to
gather data about consumer purchases and preferences.
EXAMPLES
• By fostering a culture of innovation, the company continuously seeks ways to enhance its
operations. This may involve experimenting with new technologies, optimizing supply
chain processes, and empowering employees to contribute their creative insights. As a
result, the company not only achieves cost savings but also experiences ongoing growth
and success in a competitive market.