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Recent research published in MIT SMR suggests that most new business models in established companies follow a consistent path, beginning with the creation of the model/business unit, then shifting to sustaining and growing the business, and ultimately moving to wringing efficiency from it. Understanding these steps is crucial to creating a successful process for repeated business model innovation.
On Jan. 24, MIT SMR coauthors Clayton M. Christensen and Derek van Bever discussed their recent article, “The Hard Truth About Business Model Innovation,” in a live webinar. The authors explained how an understanding of the stages of business model creation allows leaders to correctly categorize the innovation opportunities they are considering in terms of their fit with the company’s existing structure and priorities.
In the webinar, the authors discussed:
- The three stages of business model development, and how interdependencies among business model elements change over time
- How to evaluate the fit between an opportunity and an existing business
- Why a company should focus on creating new business models, rather than changing existing ones
- How to turn an event — the act of creating a new business and a new business model — into a repeatable process