Business Models

Showing 1-20 of 77

A New Playbook for Diversified Companies

  • Research Feature
  • Read Time: 17 min 

Scholars have argued for years that high levels of diversification harm company performance and value creation. But multi-business companies can do quite well. Those that thrive tend to do three things: They limit the number of business models in their portfolio and support them with a cohesive operating model. They tailor the corporate parenting strategy to the needs of individual business units. And they allocate resources according to the role played by each business unit.

Bill It, Kill It, or Keep It Free?

  • Research Feature
  • Read Time: 14 min 

Many B2B companies seek to grow beyond traditional product lines by venturing into new services. Yet they often overlook the opportunity to capture sales from free services they provide. This article outlines the free-to-fee, or F2F, service transition. It shows how to inventory free services (categorizing them as profit drains, distributor delights, competitive weapons, or gold nuggets) and lays out a path for profitably generating revenues.

How Platform Strategies Continue to Create Value

  • Blog
  • Read Time: 6 min 

Platform companies continue to surprise and challenge conventional approaches to creating value. The 2018 MIT Platform Strategy Summit brought together innovative leaders who are playing a major role in the changing digital economy. Learn from their experience with five major principles for creating new value with platforms.

MIT SMR Summer Must-Reads

  • Blog
  • Read Time: 1 min 

The most popular articles from the MIT SMR archive reflect the depth and range of management challenges our readers face in areas such as innovation, leadership, strategy, and technology. Authors of these “must reads” include MIT Sloan faculty Nelson Repenning and Donald Sull, plus Clayton Christensen, Albert Segars, Michael Schrage, Sam Ransbotham, David Kiron, Philipp Gerbert, and Martin Reeves.

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Global Competition With AI in Business: How China Differs

AI’s largest and most enduring contributions will be in non-technology sectors, and many of them will come from China. Buoyed by the country’s latest five-year plan and enabled by centralized data, Chinese companies are investing aggressively in AI and adapting their business models to make the most of AI’s potential, but unclear business cases and bottlenecks due to lacking technical capabilities hinder adoption.

Three Signals Your Industry Is About to Be Disrupted

Emerging technology and new business models have created new ways of serving customers and allowed digital leaders to disrupt traditional companies. Disruption rarely comes out of nowhere, however: There are common patterns to learn from and three major signals to recognize in evaluating the risk for your industry.

The Store Is Dead — Long Live the Store

At the same time that many traditional retailers are closing offline stores, digitally native vertical brands such as Bonobos and Warby Parker are aggressively expanding into offline locations. And both online and offline retailers are converging in experience-oriented “showrooms.”

The End of Scale

For more than a century, economies of scale made the corporation an ideal engine of business. But now, a flurry of important new technologies, accelerated by artificial intelligence (AI), is turning economies of scale inside out. Business in the century ahead will be driven by economies of unscale, in which the traditional competitive advantages of size are turned on their head.

Manufacturers Can Also Win in the Sharing Economy

  • Interview
  • Read Time: 8 min 

The sharing economy isn’t all bad news for manufacturers of big-ticket items such as cars. Research from Carnegie Mellon and UC Berkeley says that manufacturers will sometimes be able to charge higher prices to customers who are planning to rent out those goods. In a Q&A, one researcher says that when there’s heterogeneity in the market, meaning both a high-usage population and a low-usage population, circumstances are ripe for “a win-win-win for the borrower, the owner, and the manufacturer.”

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Why Some Platforms Are Better Than Others

Executives often look at the network effects of digital platforms as a key source of competitive advantage — without understanding that platforms need to also leverage other factors at play in the local markets and among preferred customers. Network effects can help, but on their own, they offer very limited competitive value.

Surviving in an Increasingly Digital Ecosystem

  • Research Highlight
  • Read Time: 5 min 

Companies today will have to reinvent themselves to survive, and every large and ambitious company should be trying to figure out how to become a destination for its customers. Consumers are voting with their mobile devices and choosing from a handful of dominant “ecosystem drivers”— businesses such as Amazon and WeChat, which become destinations for their customers’ needs by offering complementary or sometimes competing services — for each domain in their lives.

Could the Big Technology Companies of Today Be the Financial Advisers of Tomorrow?

  • Frontiers

  • Opinion & Analysis
  • Read Time: 10 min 

Although traditional financial services companies now offer mass-market financial advice via “robo-advisers,” average U.S. customers seeking investment advice are still underserved — and platform-based digital powerhouses like Amazon are taking notice.

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For a Return on Platform Investment, Focus on New Capabilities

  • Blog
  • Read Time: 5 min 

Business success today requires taking part in open platform ecosystems. But too many world-class product and services companies find their platformization quests narrowly defined, and end up with constricted or conflicted implementations. The ability of information systems and devices to exchange data isn’t enough in and of itself. Instead, developing new capabilities is the key to platform innovation that will add value to an organization.

Don’t Confuse Digital With Digitization

“Becoming digital” is a totally different exercise from digitizing. Digitization involves standardizing business processes and is an important enabler of digital, but digitization on its own won’t make a business a digital company. Instead, a digital transformation involves rethinking a company’s value proposition. To become digital and pursue a digital vision, companies must embrace information-enriched customer solutions delivered as a seamless, personalized customer experience.

All Platforms Are Not Equal

  • Frontiers

  • Research Highlight
  • Read Time: 12 min 

The emergence of a handful of high-profile virtual monopolies built on digital platforms has directed a huge amount of attention to the network effects such platforms fuel. But not all platforms are equally powerful. There is a reason why Airbnb is a better business than Uber.

Platform Sprawl Leaves No Industry Behind

  • Blog
  • Read Time: 5 min 

A decade ago, Apple’s iPhone cornered the mobile phone market by developing a platform interface that expanded its product from a simple one-task tool to a multitask utility. Using platforms to gain competitive advantage is no longer unique to Apple — it is happening in other industries across the board as readily available platform options grow in number.

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.

Showing 1-20 of 77