Business Models

Showing 1-20 of 53

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Organizing for New Technologies

  • Research Highlight
  • Read Time: 6 min 

When faced with an emerging technology, many companies have trouble responding — not because they don’t recognize how it impacts their business, but because they have difficulty managing the uncertainty around the new technology’s competitive viability. And when the technology significantly disrupts the company’s existing business, it can create structural impediments to pursuing opportunities.

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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.

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Harnessing the Best of Globalization

Globalization offers significant opportunities, yet most companies approach key decisions haphazardly. Although the complexity of globalization means managers rarely can fully analyze a global business opportunity before they need to act, the basic tensions in global business models are straightforward. A simple analysis of global ventures along these dimensions can help entrepreneurs develop clearer expectations and decision-making processes.

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The Real Lessons From Kodak’s Decline

Former photography giant Kodak is often cited as having lacked the vision to recognize the effects digital technology would have on its business. The reality of what happened — and the true lessons of Kodak’s experience with digital disruption — highlight the complex challenges posed by fast-moving technological innovation.

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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.

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Five Steps to Strategic Sustainability and Abundance

Kenyan mobile money pioneer M-Pesa is just one of many companies in developing economies that build virtuous cycles where solving ecological problems and building resilient communities opens new opportunities. Adopting an abundant perspective, argues author Jay Friedlander, provides concrete economic, social, and environmental objectives that unleash new possibilities.

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Is It Time to Build Your Own Platform?

If you really want to create value, forget about burning platforms and start building them. A platform, explain professors Geoffrey Parker and Marshall Van Alstyne, and Sangeet Choudary, founder and CEO of Platform Thinking Labs, in Platform Revolution: How Networked Markets are Transforming the Economy and How to Make Them Work for You, is a “business model that uses technology to connect people, organizations, and resources in an interactive ecosystem.”

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How to Avoid Platform Traps

Many of today’s most successful technology businesses— including Apple, Facebook, and Uber — are built on a platform-based business model. But the increasing popularity of platform strategies masks a difficult truth: Such strategies are hard to execute well, and they are prone to several common pitfalls. Those platform traps include growth with no strategic focus, pursuing an intermediate approach between the mass market and a niche, and overlooking the value proposition of partners.

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How is Digitization Affecting Your Business?

  • Blog
  • Read Time: 2 min 

How much of a threat does digital disruption present to your business? A short online questionnaire from Peter Weill and Stephanie L. Woerner, both of MIT Sloan’s Center for Information Systems Research, helps assess digital risk. “Although sweeping technology-enabled change often takes longer than we expect, history shows that the impact of such change can be greater than we ever imagined,” they write. “Think steam engines, cars, airplanes, TVs, telephones and, most recently, mobile phones and e-books.”

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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.”

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Competing With Ordinary Resources

Not every company can be built around exceptional talent or exclusive technology. Instead, companies also can thrive by the innovative use of ordinary resources, such as well-managed staffs and competent websites. As management scholars Sumantra Ghoshal and Christopher Bartlett once wrote: “The key function of management is to help ordinary people produce extraordinary results.” The authors examine how business models leveraging regular resources will take different approaches than those focused on scarce strategic resources.

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Adapting to the Sharing Economy

Instead of buying and owning products, consumers are increasingly interested in leasing and sharing them. New strategies can help companies embrace this “collaborative consumption.” For instance, Ikea and Patagonia have found that helping people resell or give away products both enhances the companies’ reputations and helps customers create space in their homes for new Ikea and Patagonia items. Companies have also found value in embracing opportunities to share existing assets and capacities.

Image courtesy of Airbnb Facebook.

How to Win With a Multisided Platform Business Model

  • Blog
  • 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.

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Strategic Decisions for Multisided Platforms

Some of the fastest growing businesses in recent years — companies such as Facebook, eBay and LinkedIn — are “multisided platforms” that enable interactions between two or more sets of participants. The spectacular success of some of these MSPs has caught the attention of many entrepreneurs and investors. But building a multisided platform business requires savvy decisions on everything from design to governance to pricing.

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How to Revitalize Your Digital Business Model

  • Blog
  • 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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Strategic Choices in Converging Industries

As industries converge and seemingly unrelated businesses suddenly become rivals, managers must understand the new challenges and the long-term implications. A six-year study of convergence in the telecommunications, information technology, media and entertainment sectors by the authors shows that savvy companies choose one of four strategic paths: they become a technology pioneer, a market attacker, an ecosystem aggregator or a business remodeler.

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The Executive’s Role in Social Business

A majority of respondents to a survey by MIT Sloan Management Review and Deloitte say that their companies’ social capabilities are at an early stage of developing social capabilities. However, executives are increasingly recognizing the value of social business to their organizations, and a majority of C-suite respondents believe that social business represents an opportunity to fundamentally change the way work gets done.

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How Analytics Can Transform Business Models

There are 52 million Latinos in the United States, with $1.5 trillion of purchasing power. Entravision Communications Corporation, a Spanish-language media company, reaches about 96% of that U.S. Latino audience through its television and radio stations and digital platforms. And it’s using that extraordinary reach to provide media solutions to marketers interested in tapping into the Latino consumer market.

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How Starbucks Has Gone Digital

  • Interview
  • Read Time: 15 min 

Starbucks chief digital officer Adam Brotman and chief information officer Curt Garner explain how they collaborate closely. The two constantly seek to improve customer experience through technology and to unify marketing efforts across channels. Their partnership has forged a fast-paced rollout of new digital efforts, from faster payment processing to mobile ordering, across Starbucks’ 17,000 stores.

Image courtesy of Flickr user BenLucier.

Optimizing Your Digital Business Model

A company’s digital business model describes how the enterprise interacts digitally with its customers to generate value. If you lack a good digital business model, your customers may leave you behind. This article presents a framework to help enterprises compete digitally with three capabilities: their content, customer experience and platform. The framework is illustrated with case studies of top performers like Amazon, Apple, LexisNexis and USAA and results from an effective practices survey.

Showing 1-20 of 53