Business Model Innovation

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Building a Winning Business Model Portfolio

Many companies today are operating several business models at once. But despite the potential that business model diversification has for generating growth and profit, executives need to carefully assess the strategic contributions of each element of their business model portfolio.

The Silicon Valley Caravan: What Sets the Tech Upstarts Apart?

  • Blog
  • Read Time: 5 min 

For tech giants and startups alike, Silicon Valley success is grounded in core business values and processes rather than technological know-how — with a unique twist. Tech businesses have made a commitment to flexibility that allows them to reshape their business models to the needs of an ever-changing digital environment, which gives them an advantage over less-adaptable traditional companies.

What You Need to Know Before Starting a Platform Business

There’s a great deal of enthusiasm about platform strategies these days. Entrepreneurs pitch their startups as the next Uber, the next Facebook, or the next Airbnb, while executives in established companies are retooling their strategies around platforms to drive growth and compete digitally. But creating a successful platform business is not easy — as economists Richard Schmalensee and David S. Evans explain in this MIT Sloan Management Review interview.

Analytics as a Source of Business Innovation

The 2017 Data & Analytics Report by MIT Sloan Management Review finds that the percentage of companies deriving competitive advantage from analytics increased for the first time in four years. Incorporating survey results and interviews with practitioners and scholars, the report finds that companies’ increasing ability to innovate with analytics is driving a resurgence of strategic benefits from analytics across industries. The report is based, in part, on MIT SMR’s seventh annual data and analytics global survey, which includes responses from 2,602 business executives, managers, and analytics professionals from organizations located around the world.

Free Webinar: Building a Business Creation Engine

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  • Read Time: 1 min 

MIT SMR coauthors Clayton Christensen and Derek van Bever discussed their recent article, “The Hard Truth About Business Model Innovation.” They explained how understanding the stages of business model development is crucial to creating a successful process for repeated innovation.

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The Next Wave of Business Models in Asia

The first wave of innovation from emerging markets in Asia has been predicated on the replication of existing business models at lower cost. The second wave, which could be even more disruptive than the first, fundamentally reimagines various facets of the business model to find new, often digitally enabled, ways in which resources and processes can be leveraged. Such companies identify creative ways for partners, stakeholders, and customers to be involved in value creation and capture.

Do You Have the Will for Digital Transformation?

Research shows that successful digital transformation does not require secret digital knowledge; it simply requires the boldness to recognize that digital transformation is occurring and to begin trying to adapt your business to account for and capitalize on these trends.

Free Video Panel: Creating a Data-Driven Enterprise: Real-Life Cases

In a video panel and Q&A, MIT SMR editors discuss key insights from a recently completed series of in-depth case studies on how prominent organizations are using data and analytics to transform their operations. They review Intermountain Healthcare, GE, Nedbank, and the City of Amsterdam’s efforts to become more data driven. This set of diverse organizations offers a unique perspective on the challenges and opportunities associated with becoming a data-driven organization.

The Hard Truth About Business Model Innovation

Attempts at business model innovation have led to both repeated failures as well as seemingly inexplicable successes — and few formulas to help guide business leaders. Yet a study of both failures and successes shows that the journey to successful innovation is predictable, although “travel time” differs by industry and circumstance. The manager’s dilemma is to identify whether the journey is one the company wants — or needs — to take.

The Sustainable Tactics You Don’t Know, But Should

Businesses looking for sustainable business models need a strategy, but there are plenty of useful tactics available. As part of our series on building abundant enterprises, we look at regenerative marketing and collaborative exchange — just two in a list of 15 possibilities.

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Managing Tensions Between New and Existing Business Models

Exploring new business models may be a good way to stay competitive, but doing so can create tensions internally, in areas such as organizational structure and competition for resources. Companies exploring business model innovation may not recognize the inevitability of these tensions and thus be poorly prepared to manage them. But understanding these issues may lessen some of the organizational challenges associated with business model innovation.

How Digital Transformation Is Making Health Care Safer, Faster and Cheaper

  • Interview
  • Read Time: 17 min 

What does it take to bring world class digital technology to one of the world’s leading medical centers? As chief information officer of Beth Israel Deaconess Medical Center, in Boston, Dr. John Halamka leads exactly that charge. Overseeing digital strategies designed to make patients safer while being completely secure and stable is, he says, like “being asked to change the wings on a 747 while it’s flying. Total security, total reliability and stability, with complete innovation at the same time.”

Thriving in an Increasingly Digital Ecosystem

Research from MIT Sloan School of Management’s Center for Information Systems Research says that to prepare for a future of digital disruption, companies need to consider which of four business models to adapt. “Given the amount of turmoil digital disruption is causing, it’s time for companies to evaluate these threats and opportunities and start creating new business options for the future — the more connected future of digital ecosystems,” write Peter Weill and Stephanie L. Woerner, both of CISR. Companies also need to develop new capabilities in two areas: learning more about their customers and becoming “more of an ecosystem.”

Photo of LiquidSpace’s Jay Suites rental in New York City

More Companies Are Cashing In on Underused Resources

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Companies can participate in “collaborative consumption” through creative new approaches to defining and reusing their resources. So write Kurt Matzler, Viktoria Veider and Wolfgang Kathan, all of University of Innsbruck. For instance, LiquidSpace, based in Palo Alto, California, connects organizations that have unused office space with temporarily renters. It has been called the “Airbnb of work spaces” and is extending the idea of sharing unused capacities to companies that aren’t totally built around the collaborative model.

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Are You Ready For the Certainty of the Unknown?

The skill set for both companies and individuals of the future will be to embrace impermanence and continual reconfiguring, according to Benn Konsynski, a professor of information systems at Emory University. He says both organizations and employees need to prepare for the “the remix era” and “the certainty of unknown.” He sees “improvisation” as a personal and enterprise necessity in the 21st century.

A New, Analytics-Based Era of Banking Dawns at State Street

Change does not come easy to established institutions, particularly when they count their longevity in centuries rather than decades. Yet in the wake of the global financial crisis, State Street Bank has elected to revamp 200+ years (and counting) of banking practices in favor of a data-driven, analytics-based business model. In doing so, it created a new business, SSGX — and initiated significant cultural changes.

Image courtesy of Airbnb Facebook.

How to Win With a Multisided Platform Business Model

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  • Read Time: 2 min 

“Increasing awareness of business models and the spectacular MSP successes from the past decade have prompted many entrepreneurs and investors to attempt building or identifying ‘the next eBay,’” writes Andrei Hagiu, an associate professor in the strategy group at the Harvard Business School. But successful MSPs such as PayPal, eBay and Alibaba are the exception rather than the rule. Haigi offers four observations about what new companies can do to position themselves to be among the winners rather than the losers.

Video: New Opportunities in the Transformed Music Industry

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  • Read Time: 1 min 

It’s been a difficult decade for any company that’s been in the recorded music business. But at Universal Music, the company is using external partnerships, technology, new platforms and “democratized data” to surmount challenges in one of the first industries to go digital. Universal’s Rob Wells explains how he and his colleagues have dealt with massive change and how they take advantage of new opportunities to put the company at the forefront of the industry landscape.

How to Revitalize Your Digital Business Model

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  • Read Time: 3 min 

What should a company do if its digital business model isn’t working very well? Peter Weill, chairman of the MIT Sloan School of Management’s Center for Information Systems Research, has created some principles to revamp the fortunes of a digital business. His framework focuses around three planks: content, experience and platform. Executives should decide which plank offers competitive advantage and develop a world-class version of it online, partnering with others for the other two planks.

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