The ultimate competitive advantage of continuing

business model innovation

• Continuing business model innovation provides a parallel way to outperform the competition.

• Improving a company’s business model by redirecting its focus will mean that competitors will be left out of position and unable to respond effectively.

• When business models are continuously and rapidly shifting, these conditions will cause the competitors to stumble and will more likely make the competitors positions more
tenuous and will lead them to further waste their resources.

• The article describes A strategic competitive advantage one’s offerings can be provided in ways that deliver more sales, higher profitability and greater cash flow than for competitors
supplying the same customer.

• Strategic competitive advantages and business model innovations, replacements and improvements.

Most companies use one of four strategies to outperform the competition:

1. Lower prices based on cost advantages (Wal-Mart).

2. More desirable products and services (Tiffany).
3. More choices and information (Amazon.com).
4. Close personal relationships (Avon).

• A business model comprises of the combined elements of “who”, “what”, “when”, “why”, “where”, “how” and “how much” and business model replacement means improving at
least 4 of these business model elements versus the competition and whenever company makes these replacements in the products and services that weren’t previously available,
these replacements as well as the process to makes these novel replacements are referred to as business model innovations.

• Key lessons for making business model innovations:

1. The CEO must establish an unchanging core vision for serving customers and other stakeholders that includes an expectation of regular business model changes
2. To become an effective competitor is to shift from being a novice tied to inertia to being more specialized and expert.
3. Companies need to adopt business models that relate to irresistible forces in a flexible way
4. Companies need to create processes for making innovations and improvements.