4 Business Model Innovations Examples of approach
Innovating is the engine driving our global economy so it is always smart to stay up to date on the latest business model innovation examples.
At its best, new developments and inventions continually renew life, create jobs, and improve our quality of life. Most of the iconic business innovations of the past few centuries started with the same thing: a radically novel idea. Whether we are talking about the cloud or personal computer, new ideas are the bedrock of change. We can think of innovations as falling into one of four main categories.
Top Business Model Innovation Examples
1. Changing the customer relationship
Things have changed in customer service and relationship managing, as you have no doubt recognized. Loyalty is the new game in town, with programs aiming to hook customers for the long-term on the ascent. Additionally, the costs for gaining a new customer, though still higher than keeping an old one, appears to be falling due to new digital marketing techniques that make promotion more efficient. Many customers are quite savvy and picking their services and will often switch companies due to low transition costs. This means that keeping loyal customers means listening to them. Some companies, such as Quirky, have formal channels for customers to vote for the products it creates. This a great way to keep consumers appeased and engaged. The philosophical concept here is switching from a loyalty framework to an empowerment one.
2. Innovating business practices
Let's continue with top business model innovation examples. Companies of all kinds thirst for new ways to bolster efficiency, cut costs and increase the bottom line. As companies gain expertise in their field, their ability to optimize and improve their processes grows. With competition fierce, optimizing business processes and making efficiency gains can be critical to survival and healthy profitability. Business intelligence and data analytics can help improve productive flexibility and efficiency, and many firms are taking advantage of these tools.
3. Resource innovation
It has long been thought that competitive companies should own their strategic assets on the balance sheet. Valuable assets and resources were always said to key to long-term business success. For this reason, many businesses still own rather than lease their key assets and resources. But things may be changing in some areas. If assets are rarely or sparsely utilized, it may be smarter to lease through innovative digital mediums. Technology has reduced certain transaction costs, and it is now easier than ever to consume collaboratively. The “sharing economy” innovative business model is not just for end-consumers anymore. In certain cases, ownership may not be the smartest play, especially when flexible, multi-firm arrangements are available.
4. Cost innovations
Better technology and digitalization of certain stages in the supply chain have reduced costs for many businesses across sectors. For example: online training has cut employee development costs by eliminating costly travel accommodations and seminars.
Large entities sometimes have trouble being sleek or innovating their business to compete in the digital age. However, it is totally possible to tap into these innovative business models. Anyone can be disruptive, it simply requires identification of opportunities, rejection of old dogmas, and a willingness to be creative.