Business Model Innovation - Share your stories and discuss your opinions.

[Imaginatik Research]

Business Model Innovation focuses on changing/innovating the core model
a company follows to make money. For example, Dell was able to rework
the PC manufacturing model back in the mid 1990's to achieve dramatic
results. At the time, most computer manufacturers typically built
computers in advance of demand, and sold primarily through retail or
reseller networks. For the manufacturer, this meant keeping a reserve
of inventory that left them exposed to the economic effects of
Moore's Law.

Dell's reworking of the standard business model to an on-demand,
direct to consumer model meant that they were able to minimize that
effect, pass on savings to customers, and allow customers to buy a
computer better specified to their exact needs rather than buying a
"nearest fit" solution at the retail store. This new model was so
successful, that Dell became the major PC manufacturer within a few
short years, and forced all the other companies in this space to adopt
a similar model in order to compete.

What other classic examples of Business Model Innovation have you come
across and experienced? What do you think of these models, strength,
weaknesses, insights etc?

[Ali Ozgenc]

IKEA is a good example too.

On the other hand Dell, eventhough much touted for their business model, is in my experience a really bad example for customer service.

 

Ali Ozgenc.

 

[Di]

I've always thought Li & Fung's business model was genius. They don't
design anything, they don't make anything, they don't retail anything,
they don't market anything. But in 2005 they had revenues of US$7.2 B
with only 7,000 employees by being the best darn middle-man out there.