phd in business model innovation

Business Model Innovation: What It Is And Why It’s Important

Industry Advice Business

Amazon launched in 1995 as the “Earth’s biggest bookstore.” Fast-forward 22 years, and that “bookstore” is now a leader in cloud computing, can deliver groceries to your doorstep, and produces Emmy Award-winning television series. 

The trillion-dollar organization has achieved this growth by being continuously willing to innovate upon its business model in order to address new challenges and pursue new opportunities. 

“Amazon is amazing at new business model development,” says Greg Collier, an academic specialist in   Northeastern’s D’Amore-McKim School of Business and the director of international programs for the Center for Entrepreneurship Education . “They look at themselves from a customer-defined perspective.”

That approach has helped Amazon scale because rather than rely on one revenue stream or customer segment, the company continuously asks “ What’s next?” This has allowed leadership to iterate on its business model accordingly, repeatedly experimenting with a process known as business model innovation .

As Amazon’s success demonstrates, this process can be incredibly exciting and impactful when you’re in control. However, when the need to innovate your business model is thrust upon you by outside forces, it can also feel quite disruptive. 

For instance, today, the novel coronavirus is causing tremendous shifts in both the national and global economy. Many companies are being forced to innovate and adapt their business models in order to meet these challenges, or else risk falling victim to these drastic changes.

Read on to explore what business model innovation is and why it is so important for businesses to be capable of change.

What Is Business Model Innovation?

A business model is a document or strategy which outlines how a business or organization delivers value to its customers. In its simplest form, a business model provides information about an organization’s target market, that market’s need, and the role that the business’s products or services will play in meeting those needs. 

Business model innovation , then, describes the process in which an organization adjusts its business model. Often, this innovation reflects a fundamental change in how a company delivers value to its customers, whether that’s through the development of new revenue streams or distribution channels.

Business Model Innovation Example: The Video Game Industry

Amazon is not the only company known for continuously innovating its business model.

The video game industry, for example, has gone through a number of periods of business model innovation in recent years, Collier says, by envisioning new ways in which to make money from customers.

When video games were first created, the consoles that housed them were expensive and bulky, which put them out of reach of most consumers. This gave rise to arcades, which would charge customers to essentially purchase credits needed to play the games. 

As manufacturing processes and technological advancements made it easier to create smaller, more economical units, however, companies like Atari took advantage of the demand by selling units directly to the customer—a massive departure from what had been the accepted practice.

More recently, game developers have had to undergo rapid business model innovation in order to meet the evolving demands of customers—many of whom want to be able to play their games right on their smartphones. 

Originally, many companies adjusted their practices in order to put their games in this format, charging consumers a subscription fee or making them pay to unlock new levels. Some of those businesses, however, were able to innovate their business models to make gameplay free to the end-user by incorporating in-app advertising or selling merchandise such as T-shirts and plush toys. This practice, they found, was able to dramatically increase their reach, while also bringing in substantial funds from consumers.

As Collier notes, “Competitors can easily change how they price.” That’s why it’s crucial for companies to consider how their products are being delivered.

The Importance of Business Model Innovation 

Business model innovation allows a business to take advantage of changing customer demands and expectations. Were organizations like Amazon and Atari unable to innovate and shift their business models, it is very possible that they could have been displaced by newcomers who were better able to meet the customer need.

Business Model Innovation Example: Blockbuster vs. Netflix

Take Blockbuster, for example. The video rental chain faced a series of challenges, particularly when DVDs started out selling VHS tapes. DVDs took up less shelf space, had higher quality video and audio, and were also durable and thin enough to ship in the mail—which is where Netflix founders Reed Hastings and Marc Randolph spotted an opportunity.

The pair launched Netflix in 1997 as a DVD-by-mail business, enabling customers to rent movies without needing to leave their house. The added bonus was that Netflix could stock its product in distribution centers; it didn’t need to maintain inventory for more than 9,000 stores and pay the same operating costs Blockbuster did.

It took seven years for Blockbuster to start its own DVD-by-mail service. By that point, Netflix had a competitive advantage and its sights set on launching a streaming service, forcing Blockbuster to play a game of constant catch-up. In early 2014, all remaining Blockbuster stores shut down .

“Blockbuster’s problem was really distribution,” Collier says. “DVDs inspired Netflix, and the technology change then drove a change in the business model. And those changes are a lot harder to copy. You’re eliminating key pieces in the way a business operates.”

For this reason, it’s often harder for legacy brands to innovate. Those companies are already delivering a product or service that their customers expect, making it more difficult for teams to strategize around what’s next or think through how the industry could be disrupted.

“Disruption is usually then done by new entrants,” Collier says. “Established organizations are already making money.”

Business Model Innovation Example: Kodak

By focusing solely on existing revenue streams, however, organizations could face a fate similar to Kodak. The company once accounted for 90 percent of film and 85 percent of camera sales . Although impressive, that was just the problem: Kodak viewed itself as a film and chemical business, so when the company’s own engineer, Steven Sasson, created the first digital camera, Kodak ignored the business opportunity. Executives were nervous the shift toward digital would make Kodak’s existing products irrelevant, and impact its main revenue stream. The company lost its first-mover advantage and, in turn, was later forced to file for bankruptcy.

Business Model Innovation Example: Mars

Mars started as a candy business, bringing popular brands like Milky Way, M&M’s, and Snickers to market. Over time, however, Mars started expanding into pet food and, eventually, began acquiring pet hospitals. In early 2017, Mars purchased VCA —a company that owns roughly 800 animal hospitals—for $7.7 billion. further solidifying its hold on the pet market.

“Mars looked at its core capabilities, which is what corporate entrepreneurship is all about,” Collier says. “It’s about looking at your products and services in new ways. Leverage something you’re really good at and apply it in new ways to new products.”

The Role of Lean Innovation

Implementing lean innovation is advantageous. Lean innovation enables teams to develop, prototype, and validate new business models faster and with fewer resources by capturing customer feedback early and often.

Collier recommends companies start with a hypothesis: “I have this new customer and here’s the problem I’m solving for him or her,” for example. From there, employees can start to test those key assumptions using different ideation and marketing techniques to gather customer insights, such as surveying. That customer feedback can then be leveraged to develop a pilot or prototype that can be used to measure the team’s assumptions. If the first idea doesn’t work, companies can more easily pivot and test a new hypothesis.

“This is a big part people forget to do,” Collier says. “Lean design allows us to rapidly test and experiment perpetually until we come to a model that works.”

Pursuing Innovation in Business

In addition to business model innovation, companies could also pursue other types of innovation , including:

• Product Innovation : This describes the development of a new product, as well as an improvement in the performance or features of an existing product. Apple’s continued iteration of its iPhone is an example of this.
• Process Innovation : Process innovation is the implementation of new or improved production and delivery methods in an effort to increase a company’s production levels and reduce costs. One of the most notable examples of this is when Ford Motor Company introduced the first moving assembly line, which brought the assembly time for a single vehicle down from 12 hours to roughly 90 minutes .

The choice to pursue product, process, or business model innovation will largely depend on the company’s customer and industry. Executives running a product firm, for example, need to constantly think about how they plan to innovate their product.

“When the innovation starts to slow down, that’s when firms should be thinking of and looking at next-generation capabilities,” Collier suggests.

If a company is trying to choose where to focus its efforts, however, the business model is a recommended place to start.

“Business model innovation is often more impactful on a business than product innovations,” Collier says. “It’s Amazon’s business model that’s disrupting the market.”

Innovation Doesn’t Always Come Easy

While the examples above demonstrate that innovation is an important part of running a business, it’s also clear that it doesn’t always come easy. Corporate history is littered with examples of companies that were unable to innovate when they needed to the most.

Luckily, there are steps that business owners, entrepreneurs, and professionals can take to become better suited to pursuing innovation when an opportunity appears. 

Learning the fundamentals of how businesses and industries change will prove to be instrumental in enabling you to carry out your own initiatives. Assess and dissect the successes and failures of businesses in the past, and learn how to apply these valuable lessons to your own challenges. 

This article was originally published in December 2017. It has since been updated for accuracy and relevance.

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Business model innovation for digital technologies: unpacking the productivity paradox.

Productivity growth has been slowing down in the last decade in major economies as well as in emerging markets despite the prevalence of digital technologies. This phenomenon is widely known as the productivity paradox. The productivity growth slowdown is particularly acute in the UK compared to other major economies. One of the main reasons for this productivity slowdown could be due to the limited redesign of business models following the adoption of new digital technologies by firms.

Business Model Innovation Research Group is investigating the implications of business model innovation on productivity resulting from the adoption of digital technologies. The research includes empirical analysis of various industry value chains, developing frameworks to measure business model effectiveness as part of the senior management decision support system and productivity reporting at a national level.

Business Model Innovation in Digital Fabrication

Business Model Innovation and Entrepreneurship

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This research stream studies firms transforming from a relatively closed innovation to a more collaborative innovation business model with an ecosystem of firms. One study examines what type of governance system would be necessary for the firm to be more responsive in identifying and responding to intelligence by working collectively with the ecosystem partners. The second study examines the difference between manufacturing and service firms in their approach to searching for new ideas in the market place. A third study examines the transformation challenges of firms moving to a service-based business model with an ecosystem of firms – project within the  Cambridge Service Alliance.

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Course - business model innovation and design thinking - iø8905, course-details-portlet, iø8905 - business model innovation and design thinking, examination arrangement.

Examination arrangement: Work Grade: Passed / Not Passed

Course content

Business model innovation is related to how new and existing companies can act in order to create and capture value. Business model innovation focus on how firms adapt and transform themselves in order to pursue higher performance and competitive advantage. In this course will we look at the underpinnings of the business model concept, the dimensions, attributes and outcome of business model research.

Since its origins in the ideas of Stanford's John E. Arnold over 60 years ago, design thinking (DT) has evolved to be one of the fastest growing approaches to innovation across the globe. With its emphasis on rapid prototyping and testing, its empathy (EQ) and user-centered design, and its focus on people and our needs, DT privileges the human and creative practices in the pursuit of innovation. The course gives research based knowledge to the topic of DT and business model from an innovation and engineering. A central aim with this course is to, based on previous research, generate curiosity, understanding, appreciation and engagement with design thinking and business model innovation to help inspire your thinking, research and writing.

Learning outcome

• To provide in depth knowledge about the past, present and future of business model innovation research
• To provide in depth research based insight to the process design thinking from a management and engineering point of view
• To provide in depth knowledge about novel approaches for publishing in the field of design thinking and business model research
• PhD students following the course should be capable to reflect and position their own research in relation to the course themes

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The course has 2 obligatory preparation tasks, 5 days of teaching and hand in of course paper. Teaching includes lectures as well as seminars and presentation by the PhD students.

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Admission to a programme of study is required: Economics and Management (PHOL)

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This course is a part of the national research school in innovation (NORSI) and tailored for PhD students within the field of innovation and entrepreneurship.

Required previous knowledge

Enrolled as a PhD student in NORSI.

Course materials

Scientific articles and selected literature.

Version: 1 Credits:  7.5 SP Study level: Doctoral degree level

Term no.: 1 Teaching semester:  AUTUMN 2023

Term no.: 1 Teaching semester:  SPRING 2024

Language of instruction: English

Location: Trondheim

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Business Model Innovation in the Age of AI

Program overview.

Continuing uncertainty in the business world has accelerated the need for innovation. A convergence of recent events — the pandemic, global supply chain failures, military conflicts, and especially the advent of Large Language Models (such as ChatGPT) — have revealed stark vulnerabilities, gaps, and unprecedented challenges for businesses struggling to keep up with the pace of innovation. In the past, survival has hinged on how quickly a company could adapt, but the cost of innovating is significant in terms of money, time, and risk. To achieve sustainable results, companies will need to deploy a systematic framework for creating profit-generating ideas that leverage existing products, markets, and infrastructure.

Less risky and less costly than other forms of innovation, retooling an existing business model can also yield powerful competitive advantages. Success, though, requires a structured process that eliminates guesswork and subjectivity and can be duplicated across all areas of the organization. Fueled by the most recent faculty research of AI at Wharton , Business Model Innovation in the Age of AI enables business leaders to learn and adopt this process — and uncover potential innovations that range from simple but highly effective adjustments to industry-disrupting changes that are difficult or even impossible to copy.

Business Model Innovation in the Digital Age - Serguei Netessine

In Business Model Innovation , participants will discover new ways to dramatically improve profitability and productivity within their organization, says Academic Director Serguei Netessine.

Date, Location, & Fees

If you are unable to access the application form, please email Client Relations at [email protected] .

November 11 – 15, 2024 Philadelphia, PA $12,500

May 12 – 16, 2025 Philadelphia, PA $12,500

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Program Experience

Who should attend, testimonials, highlights and key outcomes.

In Business Model Innovation in the Age of AI , you will:

• Uncover within your organization currently unidentified ways to dramatically improve profitability and productivity
• Improve your ability to get organizational buy-in and execute on new business models that often rely on new technologies, most recently on AI
• Learn how to conduct an audit of your current business model and generate ideas for innovations, as well as how to leverage AI in the process
• Identify parts of the business model with the most potential for AI adoption
• Learn a systematic framework for evaluating, experimenting with, and prototyping your ideas
• Develop defense mechanisms beyond intellectual property protection
• Master a framework for driving and managing innovative change in your firm
• Discover how to turn disruptive technologies into profitable businesses within large firms

Experience & Impact

A Systematic Framework: Discover a structured process that eliminates guesswork when designing a business model.

Most organizations systematically and rigorously maintain and monitor key metrics such as quarterly financial statements, productivity levels, and market position. But geopolitical, technological, and socioeconomic changes upend business as usual, and the resulting economic fallout has given companies an opportunity to thoroughly reexamine and even transform their business models. To make the path ahead clearer, Business Model Innovation in the Age of AI  helps participants unlock this potential by developing a process for innovation that can be managed and turned into a driver of growth.

Unlike innovation that involves the creation of new products, services, or technologies, this brand of business model innovation can come from anywhere in the company. It requires fewer resources and less time to implement and can result in innovations that are far more profitable and transformative than product- or technology-driven ones.

Embrace Failure: Professor Serguei Netessine says failure is part of the process when innovating a business model.

Business Model Innovation in the Age of AI provides a systematic framework that relies on practical management rather than startup agility or luck. You can begin applying this framework to your own business during the program, conducting an audit of your current models and identifying areas for potential innovations as well as effective AI applications. You will also learn a process for experimentation that addresses weaknesses in proposed business models and experiment with those models to quantify their value and viability. Working in small groups, you will apply class learnings to a real company.

Because the critical last step in the process is implementation, you will be immersed in a half-day simulation on change leadership, strengthening your ability to get buy-in and drive change in your organization. You and your team will act as consultants to a company going through a change effort, working to successfully sell that effort to those in the organization. This powerful learning experience, a highlight of the program, allows you to apply new approaches, learn from real-time feedback, and hone your skills.

Led by Professor Serguei Netessine, a global thought leader in business model innovation and an Amazon Scholar who applies research to help solve technical strategy problems, this program also leverages the expertise of other Wharton faculty who specialize in big data, organizational change, AI, business ecosystems, and digital disruption. In addition, successful business model innovation practitioners will share their experience and insights with participants in two highly interactive sessions. By the end of the program, you will have the tools and skills needed to create value in your organization and to better position it in your market and industry.

Business Model Audit: Uncover within your organization currently unidentified ways to dramatically improve profitability.

Session topics include:

• The Imperative of Business Model Innovation in the Age of AI
• The Language of Business Models
• The Risk-Driven Business Model Approach
• Opportunities and Challenges of Digital Transformation
• Creating a Culture of Innovation: An Actionable Framework for Business Model Innovation
• AI and Workplace Transformation: Key Concepts, Hands-On and Implications
• Leading and Managing Innovative Change: Simulation and Lecture
• Platform Ecosystems
• Lean Development and Discovery-Driven Planning
• The Better Place: Group Case Work
• Teaming for Innovation with Humans and AI

Post-Program Webinar

Continue your learning post-program by joining a one-hour webinar hosted by Professor Serguei Netessine. Professor Netessine will check-in to see how you have put the program takeaways into action and answer questions that have come up for you.

This is also a great opportunity to reconnect with your fellow program participants. The date and time of your post-program webinar will be announced in communication sent after your program concludes.

Learn More from Faculty

Listen to Faculty Interview:

• Listen: Serguei Netessine talks about Business Model Innovation for the Age of AI on Wharton Business Radio, SiriusXM.
• Read: The Risk-Driven Business Model by Serguei Netessine
• Read: Financial Times - What Covid teaches us about innovating fast by Serguei Netessine

Convince Your Supervisor

Here’s a justification letter you can edit and send to your supervisor to help you make the case for attending this Wharton program.

Due to our application review period, applications submitted after 12:00 p.m. ET on Friday for programs beginning the following Monday may not be processed in time to grant admission. Applicants will be contacted by a member of our Client Relations Team to discuss options for future programs and dates.

This program is designed for executives who are experiencing significant changes in their markets, anticipating more nimble and robust competition, and/or facing profit margins that are under pressure. The curriculum is particularly relevant for business unit leaders who have been tasked with finding new avenues for growth within an existing product line, service, or geographic territory. C-suite-level executives, and board members seeking to maintain their organizations’ relevance and standing in their industry will also benefit.

Job titles may include:

• CEO, COO, CMO, CIO, CTO
• Managing Director, Regional Director, Country Manager
• Senior Vice President, Vice President
• Senior Director
• Director of Operations
• Director of Group Strategy and Digital
• Director of Business Development
• Innovation, R&D Manager

Fluency in English, written and spoken, is required for participation in Wharton Executive Education programs.

Plan Your Stay

This program is held at the Steinberg Conference Center located on the University of Pennsylvania campus in Philadelphia. Meals and accommodations are included in the program fees. Learn more about planning your stay at Wharton’s Philadelphia campus .

Group Enrollment

To further leverage the value and impact of this program, we encourage companies to send cross-functional teams of executives to Wharton. We offer group-enrollment benefits to companies sending four or more participants.

Serguei Netessine, PhD See Faculty Bio

Academic Director

Dhirubhai Ambani Professor of Innovation and Entrepreneurship; Professor of Operations, Information, and Decisions; Senior Vice Dean for Innovation and Global Initiatives, The Wharton School

Research Interests: Business model innovation, operational excellence and entrepreneurship

Rahul Kapoor, PhD See Faculty Bio

David W. Hauck Professor; Professor of Management, The Wharton School

Research Interests: Innovation, technology management and strategy, industry evolution, firm boundaries, business ecosystems

Marissa King, PhD See Faculty Bio

Alice Y. Hung President’s Distinguished Professor; Professor of Health Care Management; Professor of Management, The Wharton School

Nancy Rothbard, PhD See Faculty Bio

Deputy Dean; David Pottruck Professor; Professor of Management, The Wharton School

Research Interests: Emotion and identity, work motivation and engagement, work-life and career development

Roy Rosin, MBA See Faculty Bio

Chief Innovation Officer, Penn Medicine

Research Interests: Chronic disease management, clinician behavior, medication adherence, physical activity, mhealth and wearables

Scott Snyder, PhD See Faculty Bio

Chief Digital Officer, EVERSANA; Senior Fellow, Management Department, The Wharton School; Adjunct Faculty, The Moore School of Engineering, University of Pennsylvania; Co-author Goliath’s Revenge

Prasanna Tambe, PhD See Faculty Bio

Associate Professor of Operations, Information and Decisions, The Wharton School

Research Interests: Economics of IT labor, technological change, and labor markets

Valery Yakubovich, PhD See Faculty Bio

Executive Director, The Mack Institute for Innovation Management, University of Pennsylvania

I took Business Model Innovation because I wanted to expand my thinking and discover if there was more to innovation beyond a product-centric approach. I’ve been with my company for over 23 years, and in that time, what I learned, I learned by doing on the job. As a manufacturer, our approach at the company has always been very product-centric. I enrolled in the program because I thought I could learn something new and expand my thinking. I most certainly did. Business Model Innovation helped me see a new way to create and sustain a competitive advantage beyond our products and the demand side of our business. It opened my eyes up to new possibilities. I felt the program struck a perfect balance between depth and breadth. I learned new frameworks that helped structure my larger thinking, such that I could pursue individual concepts and ideas in greater detail afterwards. In other words, the program functioned as a springboard that encouraged my learning process long after. The entire teaching team was fantastic . I want to especially mention Serguei Netessine and Scott Snyder. I’m part of Wharton’s General Management Program (GMP) and I can honestly say that every course has been great. Business Model Innovation was really impactful for me and one of my favorites.”

Phil Kim  Chief Strategy & Creative Officer, Universal Nutrition

I'm the founder and president of DMD America, Inc. I offer pharmaceutical and biotech companies a data solution around drug product and pricing information. Our company has had a great run, but as you get bigger, you get nervous about somebody else coming along with a better strategy or way of executing. That’s why I took Business Model Innovation . To my delight, Professor Netessine and the other faculty taught me how to think differently, so we can protect our company’s future. My key takeaway really was understanding how to redefine our business model as it relates to our overall and long-term strategy, and we’ve done quite a bit at my company since I returned from the course. The business model we were shown in the class applies to any company of any size in any industry. So we adapted our thinking, and it helped us frame the secret sauce our company has that makes customers want to work with us. It got everyone excited, and we’re not looking back. This is how we’re doing things in the future. I’d recommend the course 100%, to any business . It would be especially good for companies who are incumbents, to challenge their thinking and clear out the cobwebs of what seems to be working now but might not work so well in six months or a year. I enjoyed the class so much that I decided to take another Wharton Executive Education course, Strategy and Management for Competitive Advantage ."

Bill Little  Founder and President, DMD America, Inc.

I am a senior manager of lean transformation at Westpac Banking group. My role is that of an internal consultant with the business banking division in Westpac, enabling innovative solutions and ideas in pursuit of our group CEO’s vision of becoming one of the world’s greatest service organizations. I became interested in the Business Model Innovation course because lately one can sense that digital disruption is everywhere and forcing the traditional brick-and-mortar (incumbent) business model to change. I knew that I had to get out of that older mentality, go head-on and understand how digital is impacting today’s businesses. There is no doubt that digital is an enabler for disruptive innovations, and traditional businesses must be able to influence key stakeholders towards innovation-led growth mindset. I’ve been reading and talking with people about the subject, but it’s important to have a place where you can get a good overview of the whole and a pathway to get a deeper understanding of the subject. The program was terrific. Professor Serguei Netessine’s set up and the delivery of the core concept and hands-on exposure were very impressive. The course revolves around business model innovation, my field of interest, however the course also is able to seamlessly introduce concepts of machine learning, platform ecosystem, patterns based on historical events, etc., that may influence innovations. The insights you can get from the discussion with faculty members and other participants are very valuable. There were some really innovative thinkers there. Plus, we worked through potential solutions for real-world issues that some of the attendees were actually dealing with in their companies. That was a great experience. One of the key highlights for me based on the insights from the course was exploding the myth that large incumbent businesses owing to the size are somehow helpless to move swiftly and innovate their business models. I realized that large incumbents possess great strengths and can easily audit, experiment with, fine-tune, or pivot their business models. It is quite reassuring to know from the people in the course from different industries who have taken this on and been successful. Some of us have stayed in touch through a Slack community to brainstorm concepts and share articles and book recommendations. It’s quite helpful and keeps you motivated. Overall, I think Wharton is doing a great job with this program.”

Binu Chacko  Senior Manager, Lean Transformation, Westpac Banking Corporation, Sydney, Australia

I decided to enroll in Business Model Innovation because I wanted to strengthen my understanding, and get the right tools, to drive transformational change in an organization. I was interested in capitalizing on digital opportunities and also in overcoming the challenges that digital disruption is presenting to the world. I loved the program. I got a very clear, practical way to find paths to innovation. The course went beyond just theoretical approaches. It demonstrated how to experiment, allow oneself to risk failure, and to take learnings out of that experience. It helped change my mindset. I think we are still living in a world where failing and experimenting — when it does not directly link to a specific success — is not valued enough, and it prevents us from capitalizing on opportunities. Another topic I really enjoyed, and that I think is critical for business success, was about getting buy-in in order to drive change. The course showed me how to make a real-life impact in a business or organization. I thought the faculty were very solid. In addition to being professionals with academic backgrounds, they work with leading companies that have gone through transformations or are in the process. This makes their teaching approach very down-to-earth, which in my experience was extremely effective. Another strong element of the course was that the attendees were a rich blend of multi-industry, multi-functional areas and came from different leadership backgrounds and cultures. That made for a very interesting mix within the dynamic of the program. It fostered a lot of our interaction and enabled well-rounded and inspiring discussions. I would recommend the program; in fact I’ve already recommended it to several people. I’m still very excited about the things I learned and how much the course inspired me. I think we all realize that there are big opportunities and challenges in the digital space, and Business Model Innovation is a very strong program to help you face that more effectively. I’m now considering taking another Wharton program, the Executive Negotiation Workshop .”

Manuel Dulitzky  Executive leader of multinational companies, Santiago, Chile

Business Model Innovation is an incubation on the topic of business models — it gives you a really good sense of what to think about and how to begin to address challenges in bringing your ideas to market. I am a leader in a large, well-established organization that is slowly pivoting, and was happy to see that the program is geared for someone like me. We learned best practices that are extremely relevant and timely. I picked up good ideas in every session that related to my own challenges and have been able to apply them. All of the professors brought their own unique point of view and expertise, and I truly enjoyed having such a diverse group of attendees in terms industry segments, and geographies. I learned a lot from them. It’s a phenomenal program for someone in an organization that is trying to innovate. If that is you, I would say absolutely you should attend.”

Keyur Parikh  IT Department Head, The Vanguard Group

Business Model Innovation is a novel idea. You typically think of innovation in the form of technology or products. Serguei Netessine challenged that. Innovating your business model can give you a greater advantage than coming up with a new product or service. That’s important for my company because our industry is the most disrupted one. We know it is mandatory that we innovate, not just with new initiatives and digital, but throughout the company.”

Frank Filippo  EVP Print Group, Dow Jones

What is a business model?

At a very basic level, a business model is a plan for making money (or creating other value if the company is a nonprofit, for instance). At a slightly higher level, the term “business model” describes the way a company supplies products or services to the market to make money.

How can you build a profitable business model?

Simply put, a profitable business model is one in which revenue streams exceed cost structure. Because most models only become profitable at scale, it is critical to understand at what scale that will occur, and which cost/revenue components change at scale. On the other hand, there are profitable business models that are not easily scalable (e.g., a one-person consulting shop).

What is the perfect business model?

There is no such thing. A business model that works somewhere at some point in time may not work at all in another industry, country, or time. It is very difficult to predict which business models will succeed or fail, which is why it is important to experiment with them by testing various assumptions.

Can large companies innovate business models effectively?

They can if they solve three major issues:

• Top management needs to provide support and guidance
• The company must learn how to experiment
• The company must then learn how to pivot based on their experiments

How do the biggest corporations remain innovative?

The key to sustaining innovation at a large company is to continuously review the current business model, seeking any inefficiencies. This process is called a Business Model Audit (as detailed in the book The Risk-Driven Business Model ), and it allows the company to constantly challenge its current business model to prepare for the future.

What company has the most innovative business model?

Timing is everything in terms of innovative business models. A given model may seem innovative at a certain time, but, if successful, it often becomes mainstream and eventually inefficient. More than 100 years ago, Sears pioneered the catalogue business model and Ford innovated the way to manufacture cars by creating a vertically integrated business model with an assembly line. Their success led to industry replication, and they became mainstream. Today, Uber’s and Airbnb’s business models are highly innovative.

What are some examples of disruptive business models?

Recent business models that disrupted entire industries include peer-to-peer marketplaces (think eBay), sharing economy (Airbnb is a prime example), on-demand services (like Uber), gig economy (such as  Freelancer.com ), and subscription business models (think Spotify and Dollar Shave Club). Over time, many of these business models have become mainstream, and some prove unworkable.

What makes business model innovation so difficult in a large company?

Changing a business model often requires major changes in an organization: some lines of business can be eliminated, organizational boundaries can be adjusted, and new people with new skills may be needed for new lines of business. Naturally, the people whose livelihoods may depend on the old business model will continue to support it and doggedly resist change.

Download the program schedule , including session details and format.

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MOre Sustainable MOre Profitable (MOSMOP) Business Model Innovation

• School: Nottingham Business School
• Study mode(s): Full-time / Part-time
• Starting: 2024
• Funding: UK student / Self-funded

Staff profiles

Entry qualifications, how to apply, fees and funding, guidance and support.

Rationale and Background:

In the rapidly evolving global business landscape, the adoption and integration of Environment, Social, and Governance (ESG) principles and standards present both a formidable challenge and a transformative opportunity for businesses across sectors. Traditionally, ESG criteria—ranging from carbon emission reduction and net-zero initiatives to waste management, employment diversity, inclusion, and fair labour policies—have been relegated to the realm of compliance. This compliance-centric view has led many firms to perceive ESG initiatives as cost-bearing rather than profit-generating ventures, thereby diminishing the incentive to enhance ESG performance proactively.

However, a paradigm shift is underway, with evidence mounting in support of ESG as a potent profit-making force. For instance, in the UK, an increasing number of energy consumers are showing a preference for sustainable energy solutions, signalling a broader change in consumer behaviour and value perception towards sustainability. This emerging trend underscores the need for business leaders to rethink and reorient their strategies towards developing more sustainable offerings that not only adhere to ESG standards but also drive higher margins and better returns.

Against this backdrop, the proposed PhD project seeks to chart a new course for ESG-driven business model innovation. It aims to dismantle the traditional view of ESG as a mere compliance issue and reposition it as a cornerstone of strategic business model design that harmonizes profitability with sustainability.

Possible Research Objectives:

The project is structured around three primary objectives:

*Understand Consumer and Stakeholder ESG Perceptions: To dissect and comprehend the evolving perceptions and behaviors of consumers and broader stakeholders towards ESG, thereby identifying new needs and opportunities for sustainable business practices.

*Collaborate with Future ESG Leaders: To forge partnerships with emerging ESG leaders and practitioners, facilitating the exchange of knowledge and best practices in embedding ESG considerations into business models. This collaborative effort will serve as a crucible for reimagining and realigning business models with stakeholder expectations, creating distinctive and sustainable products and services.

*Empower ESG Entrepreneurship: To nurture and empower a new generation of ESG entrepreneurs who can lead the charge in integrating ESG principles into business model innovation. These future leaders are envisioned to play a pivotal role in transforming ESG norms across the business community, leveraging social business networking as a platform for change.

Significance:

This research project is poised at the intersection of academic inquiry and practical business innovation. By developing sustainable and profitable ESG-driven business models, the project addresses a critical gap in current business practices and contributes to the global dialogue on sustainability. The outcomes of this research have the potential to redefine how businesses approach ESG, shifting from compliance to competitive advantage and from cost to profitability.

The project's focus on collaboration with future ESG leaders and the emphasis on social business networking introduces a novel approach to disseminating and embedding sustainable practices within the business community. This strategy promises to catalyze a broader transformation in business norms, making ESG a central tenet of business model innovation.

Possible Methodology:

The project will employ a mixed-methods approach, incorporating both qualitative and quantitative research techniques. Initial phases will involve detailed market analysis and stakeholder interviews to capture ESG perceptions and needs. Subsequent stages will focus on collaborative workshops and case study analyses with future ESG leaders, aimed at co-designing and testing innovative business models.

Potential Impact:

The anticipated impact of this research is multifaceted:

*The development of a framework for ESG-driven business model innovation, providing a blueprint for businesses seeking to align profitability with sustainability. *Strategic insights into optimizing business models for ESG performance, contributing to the broader academic discourse on sustainable business practices. *Practical guidelines for future ESG leaders, equipping them with the tools and knowledge to drive change within their organizations and industries. *Recommendations for policy and regulatory frameworks that support the adoption of ESG principles in business strategy.

Possible Outcomes:

This PhD project represents a timely and critical investigation into the role of ESG in shaping the future of business. By exploring the nexus of ESG standards, consumer behaviour, and business model innovation, the project seeks to unlock new pathways to sustainability and profitability. The research outcomes will not only advance academic understanding but also offer actionable insights for business leaders, policymakers, and future ESG entrepreneurs, paving the way for a more sustainable and equitable global economy.

• Have some working experience in the relevant industry.
• Have a backup business or have access to business data for the PhD study.
• Ideal candidates should possess analytical prowess, a strong foundation in economic and business theory, and a keen interest in emerging business trends.
• Background in either of the following relevant subject areas: Information Science / Tech Management; Entrepreneurship / Innovation / Strategy

Experience in qualitative and quantitative research methodologies is highly desirable.

Applications for this PhD are accepted all year round. Please visit our  how to apply page for a step-by-step guide and make an application.

This is a self-funded PhD project for UK applicants.

For more information about the NBS PhD Programme, including entry requirements and application process, please visit: https://www.ntu.ac.uk/course/nottingham-business-school/res/this-year/research-degrees-in-business

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IESE Insight

Business model innovation: Designing the process

Innovation usually means a new product. But what if it meant a new way of doing business? A business model innovation process from the world of design.

When we think of innovation, we usually think of creating or refining new products. But innovation can occur in every level of business. Indeed, a more hidden form of innovation may lead to the most profound results.

This is business model innovation (known as "BMI" to some business professors and consultants), and relatively little is known about how it is brought about.

Professors Christoph Zott of IESE and Raphael Amit of Wharton address this gap in their chapter "Business Model Innovation: Toward a Process Perspective, " published in the 2015 Oxford Handbook of Creativity, Innovation and Entrepreneurship . Zott explains that the chapter reflects a new stage of the co-authors' deep research on the topic, which they plan to develop and refine over the next several years.

Drawing on what is known about business model innovation so far, Zott and Amit derive a model from the world of design to promote it across a range of industries. The model is flexible and can be used both for new ventures and established firms.

The far-reaching effects of business model choice

The business model is one of the most fundamental strategic choices that entrepreneurs, CEOs and general managers make.

It may sound abstract, but it is anything but. Take the case of Israeli start-up FriCSo which developed a friction-reduction technology. They had three very different business models to choose among for commercializing it:

• As machine manufacturers , they could embed the technology in machines and sell them to interested resellers and suppliers;
• As an R&D company , they could license their technology to machine manufacturers; or
• As a service provider , they could provide an outsourced service to resellers and suppliers in manufacturing.

Each of these three options carries vastly different implications in terms of costs, core capabilities, competition and potential partners — making the choice of business model a crucial decision. Given its importance, it is no leap to see that business models require thoughtfulness, and sometimes also innovation, just as any other area of the company.

Turning to design

But how should business models be innovated? The relative neglect these innovations receive led the authors to work on a generalizable process.

They looked to design theory and practice for inspiration. Designers, like innovators, deal with ill-defined problems and attempt to find new and desirable solutions.

In creating a process for business model innovation, the authors drew on a process used by the design firm IDEO, based in Palo Alto, California. While its original purpose was to help IDEO develop new products, it has also been used for services and entirely new businesses.

There are five stages that make up the design process:

• Observe . How do customers use products and services (from hospital services to trains and cell phones)? Observation means going to the source, not to market research experts. In business model innovation, this stage is broader and more complex. All business model stakeholders, not just end-users, need to be taken into consideration.
• Synthesize . Take stock, share and make sense of the data received in the observation stage. In BMI, this means gaining a holistic understanding of the challenges to and influences on the design process.
• Generate . Create potential design solutions; brainstorm. This may involve modifying an existing business model in novel ways or creating an entirely new business model.
• Refine . Evaluate and concept-test the various proposed solutions. Experiment on a small scale to make sure the innovation is moving in the right direction.
• Implement . Select the design that is the best fit. Once the new or modified business plan has been chosen, the firm must make necessary organizational and strategic adaptations.

Think systemically, think mindfully

Of course, not every change in a business model counts as business model innovation. Designs may provide new angles in terms of a firm's content, structure or governance, but to qualify as business model innovation, this novelty has to manifest itself at the system level, and it must be "new to the world."

This five-stage business model design process, once codified (as within IDEO), can be considered a firm-level capability.

As such, it could become an invaluable tool to help CEOs, entrepreneurs and general managers think more proactively about the way their firm is doing business.

• entrepreneurship

A business journal from the Wharton School of the University of Pennsylvania

Knowledge at Wharton Podcast

Business model innovation matters more than ever, february 15, 2021 • 33 min listen.

A new book by Wharton’s Raphael (“Raffi”) Amit and Christoph Zott from IESE Business School guides business leaders on how to craft a winning business model innovation strategy for the long game of disruption.

Wharton’s Raphael Amit and Christoph Zott from IESE Business School discuss their new book, Business Model Innovation Strategy.

The coronavirus pandemic has been a roller coaster for business managers. Some are cresting high, others are in freefall, and many more are simply trying to hang on until the nightmare ride comes to a stop. Amid the panic, there are valuable lessons for leaders who can take a deep breath and step back. Wharton management professor Raffi Amit and Christoph Zott , an entrepreneurship professor at the University of Navarra’s IESE Business School in Spain, have written a new book to guide businesses through the internal and external shocks caused by the pandemic and other disruptions. Business Model Innovation Strategy: Transformational Concepts and Tools for Entrepreneurial Leaders draws on 20 years of research and practice to help businesses embrace change by building a strategy that will make them more resilient and responsive to the marketplace. Amit and Zott joined Knowledge at Wharton to talk about the book. (Listen to the podcast at the top of this page.)

An edited transcript of the conversation follows.

Knowledge at Wharton: Before we dive into the book, could you give me a little background on your collaboration?

Raffi Amit: We’ve known each other since the mid-1990s, when we met at the University of British Columbia in Vancouver, Canada. Both Chris and I are strategy and entrepreneurship scholars with a very pragmatic orientation and very rich practical experiences. We observed in the mid- and late-1990s that there were all these e-businesses that were formed, and they are enormously valuable. We observed companies like eBay, for example, which was founded in 1995 and went public in 1998. It doesn’t have a product. The cost of goods sold is zero. Yet eBay is worth billions of dollars. Take Netflix, another example of a company that was founded in 1997 and went public in 2002. There’s really nothing new about its product. You could have rented CDs at Blockbuster, yet Netflix innovated in the way you rent a CD. Initially, it was mail order, and now it’s streaming. By innovating the way you rent a CD, it drove Blockbuster out of business.

This allowed Chris and me to realize that there is a new form of innovation that is distinct from product innovation, that is distinct from process innovation, and which does not require mountains of R&D expenses and years of research. This new form of innovation centered on the way companies do business. Namely, their business model. We published over two dozen papers together, and we decided to write a book about business model innovation.

Christoph Zott: The real answer is that because our last names fit so well together — Amit and Zott. We’re the team that looks at something and tries to find the answer from A to Z. If you go even beyond the internet and the focus on business models, what brought us together was our keen interest in entrepreneurship and everything that has to do with value creation. Raffi and I share a passion for that subject. We really want to understand how value is created, how people create something from nothing. This is this magical formula that is typically attributed to entrepreneurs. They’re able to turn ideas into something tangible. [They build] companies that provide employment to people. They create products that customers want to buy.

The relevant issue that we were observing, especially in the second part of the 1990s, was that there were a bunch of companies that were created very fast and made it to IPO really fast. Netscape, Yahoo, eBay. We asked ourselves, “What’s special about these businesses? Is there anything new here?” That led us to the realization that what these companies were doing and were really good at had nothing to do with our preconceived notions of products or services. But it was in how they did business, which we then called the business model.

“Everything that we have learned in business school for the past decades is still true. But the business model offers a new avenue for value creation.” –Christoph Zott

There was something fundamentally new going on, and it didn’t really have to do with the digitization of business. We saw that digitization was an enabler for firms to go about business in a new way, in a different way. This got us off on our work on business models and business model innovation. We wrote our first paper together in 2000, and it was published in the Strategic Management Journal . It’s still considered one of the seminal pieces on business models. It wasn’t that the business model was a brand-new idea for managers. But for academia, it was a new idea. We were interested in developing this idea and exploring it further because we thought it was a very, very rich idea. If you have companies that, within a matter of a few years, become worth billions of dollars, there must be something really to it. We’ve been at it now for a long time, and the book represents a summary of the insights that we and our colleagues have found and researched over the past 20 years.

Knowledge at Wharton: Let’s talk about what business model innovation is. In this book, you help define it by telling us what it is not. You wrote that, “Modifying an activity by making it faster, cheaper, or higher quality is not a business model innovation.” That statement seems to eliminate the traditional avenues of improvement that managers usually take. What should they be doing instead?

Zott: I’d like to address this question in two ways. Yes, we do say in our book what a business model is not. And we do this deliberately, because we think it helps people understand better what a business model is in the first place. In general, there is a lot of confusion about what a business model really is. If one person says A and another person thinks B, it’s very hard to think that they have a real conversation around this topic. So, we thought it would be very important first to define the concept clearly.

The second thing is that we don’t believe that other ways of creating value have become less important and that the business model eliminates these traditional avenues. In contrast, the business model adds to these traditional avenues of improvement for business managers. It complements them. Everything that we have learned in business school for the past decades is still true. But the business model offers a new avenue for value creation.

Knowledge at Wharton: Professor Amit, what is the framework for business model innovation?

Amit: Now we know what the business model is not — it’s not the product, it’s not the firm, it’s not all-encompassing, and it’s not the same thing as a business plan. The way we think about the business model is as a system of interdependent and interconnected activities that are designed to capture market needs, or perceived market needs, and create value for all the stakeholders. It’s a holistic concept that requires the manager to take a step back and apply system-wide or system-level thinking.

There are really four dimensions in a business model. First, what are the activities that need to be carried out as part of this business model? Second, how are these activities sequenced or connected to each other?  Third, who carries out each of the activities? And fourth, why is this business model creating value for all stakeholders, and why does this business model enable the focal firm that innovates the business model to capture some of this value?

The basic idea is, as Chris pointed out, if you just change and make the product a little bit better — you add a feature, for example, or make it work faster — it doesn’t change the system of activities. So, when we talk about business model innovation, it refers to a business model that is new to the industry in which the firm competes. And business model innovation strategy, which is the title of the book, refers to the design of a new activity system, namely, the design of a new business model. It refers to the processes by which that new system of activities is created and the implementation of the system within the context of the firm. And very, very importantly, [it includes] the ongoing adaptation of that business model to a changing ecosystem or environment within which the firm competes.

Zott: I just wanted to repeat this very important observation — that a business model is not all-encompassing. If it were all-encompassing, how would it then be different from a firm or an organization? We’re talking about the business model of a company, of an organization. This is distinct. In terms of the business model, it’s the activity system that we would like to highlight as the crucial underlying conceptual backbone.

We could think of Apple, which is a very well-known example because Apple does both. Apple is brilliant with product innovation and design. They have innovated many gadgets that are household items today, which has made them one of the most valuable companies on the planet. The iPhone is one of the latest examples of that.

“When we talk about business model innovation, it refers to a business model that is new to the industry in which the firm competes.” –Raphael Amit

But they are also a very powerful business model innovator. With the introduction of their app store and iTunes and all of those innovations, what they have done is added a distribution platform to their hardware business, which makes their hardware business more valuable. They benefit from the sale of the gadgets, but they also benefit from the sale of the content that is played on these gadgets, so they benefit twice. There is a mutually reinforcing relationship here between their product innovation and their business model innovation.

Knowledge at Wharton: In the book, you stress the importance of adopting a business model mindset. That usually refers to startups and thinking like an entrepreneur, but it’s a little bit more than that for you. So, what is a business model mindset and why is it important?

Zott: You mentioned entrepreneurial mindset. That is one type of mindset that’s certainly very helpful. But when we talk about business model mindset, we refer to what Raffi has mentioned a little earlier as system-level thinking and holistic thinking. Entrepreneurs also need to think at the system level and holistically because they need to think about the entire business architecture. They need to think about all business functions.

It’s the same thing with the business model [mindset]. In the business model mindset, you need to be able to take a step back, and this sometimes is very difficult for managers because they’re focused. They work in organizations, within certain functions, so they’re good at one thing. They’re good at strategy, they’re good at marketing. They may work in sales, or they may work in finance. But they rarely have this opportunity to take a step back and rethink the entire construction, the entire architecture of the business for which they’re working. How does it all hang together? How are all these activities connected to each other? That is what we believe requires a specific mindset — this ability to see the forest and not just the trees. That’s the first requirement of a business model mindset. To be able to jump the level of analysis from a focus on activities or individual activities or products, to the system level.

Amit: Think about a car manufacturer executive’s reaction to the entry of Tesla into the automotive market. The first thing they are thinking about is, “Well, maybe what we should do is expand our product portfolio and have an electric car or a hybrid car,” because the focus is on the technology of the product.

But Elon Musk — who has a background at Wharton — already adopted a much broader perspective on his firm’s innovation strategy, taking Apple as an inspiration not only for promoting distinctive technology and slick product design, but also imitating and incorporating other key aspects of the Apple business model. For example, they have their own stores rather than having franchises distribute their car. They have total control of the entire process, from the design to manufacturing and the sales. General Motors doesn’t have that. Mercedes Benz doesn’t have that. Chrysler doesn’t have that. Ford doesn’t. They use third-party franchisees that do the sales, so they don’t have total control of the interaction with the end customer. But Tesla does. And that feedback allows Tesla to continuously innovate its offer and be ahead of the competition. It’s not focused just on the car. It’s a much more holistic perspective on doing business.

Knowledge at Wharton: That’s a really great example because we just found out that Elon Musk has topped the list of richest people in the world. Clearly, he’s doing something right. We can take some lessons from his business model mindset.

“You need to be able to take a step back, and this sometimes is very difficult for managers because they’re focused.” –Christoph Zott

Zott: The Tesla example is a brilliant one in order to highlight the two traps into which managers often fall. The first trap is the level of analysis trap, which is when managers continue to focus on what they thought was the important thing to focus on. Like, for example, the product. This is very clear in the car industry. If you look at traditional car firms, and you ask managers in those car firms what’s really important, many of them will continue to talk about the car and the engine and elements of the design of the car, and so on and so forth. They’re completely focused and concentrated on the car as a product. Whereas people like Elon Musk and others in the e-mobility industry know that the car as a product is one vision. The other vision would be the car as a software platform, or even as a service. And that would be a different type of level of analysis. To get from one to the other is extremely, extremely difficult. If you have worked all your life on products, and all of a sudden somebody comes along and says, “It’s not about the product anymore. It’s about how you do business,” that’s a difficult one to grasp.

That ties into the second trap, which is the familiarity trap. You’re used to working within a particular activity system, within a particular company. You’re used to working within a car manufacturer that has things set up in a certain way, that has a production line, but then outsources many things to suppliers and works with dealerships. This is your familiar reference point. To cast that aside and say, “Wow, maybe we should do things very differently. Maybe we should not outsource so many things and should do them internally,” or vice versa — that’s not so easy, either. People are familiar with certain things, and have a hard time grasping the new and the need for a new way of doing things. The need for a new business model. They also are very much focused on a certain level of analysis, especially at the product level, and then have a hard time understanding why they should be talking about activities. “Why should activities matter? Isn’t it the product that’s important here?” We say both are important, but you need to make the move and the jump from one to the other. And that’s, I think, a mindset issue.

Knowledge at Wharton: The coronavirus pandemic has upended business in a very short period of time. But if we go back through history, there are a number of moments that have redefined business. We can think of World War II, the oil crisis in the 1970s, the development of the internet. Is this pandemic any different? Are there new lessons to be learned here?

Zott: I think that the COVID crisis is acting as an accelerator in many respects. Does it highlight very new issues? I’m not so sure. I think it brings to the forefront issues that were already there, but it makes them even more salient. It’s an accelerator in many ways, for example when we talk about education and digital ways of delivering education. In our universities, both at the Wharton School and at IESE Business School, we’ve seen a change that we would not have believed possible a year ago. I think of it more as an accelerator than as something that brings about fundamentally new desires and fundamentally new developments. Although we cannot exclude that.

Knowledge at Wharton: Dr. Amit, would you agree?

Amit: Let’s just put things a little bit in perspective. The COVID-19 pandemic triggered a severe, multifaceted global crisis — both a health crisis and an economic crisis. The shocks to the economy were both on the demand side as well as on the supply side. A catastrophic pandemic such as COVID-19 is very likely to alter the preferences, habits, and risk attitudes of consumers, in part because of the long stays at home and the social distancing measures that were applied. What seems very likely is that many companies — both large and small, both private and public, both for-profit and not-for-profit — will be prompted to reimagine themselves, to reinvent themselves, in order to survive and prosper in the future.

The way they engage with their customers might change dramatically. For the last almost year, we didn’t go to malls. We didn’t go shopping. We did everything online. If you are a mall owner, you will ask yourself, “Will consumers come back to malls? Will they need the mall? Will they need to go when they are so used to shopping online today?”

There are profound behavioral changes that might occur as a result of this pandemic. Companies need to look at themselves and say, “Should we find new ways to interact with our partners, with our customers?” Therefore, “Do we need to design a new business model?” There is no doubt that the pandemic has prompted companies to reimagine and redesign their business models. I think that we don’t really know how the new normal will evolve. That’s work in progress, right? There are so many things that are happening, both politically, socially, and otherwise, and there is a record level of uncertainty as a result. That, for sure, will affect how companies will decide to engage with their stakeholders.

“There is no doubt that the pandemic has prompted companies to reimagine and redesign their business models.” –Raphael Amit

I think that the breadth and depth of the changes that the pandemic has brought about, as well as the speed at which those things have occurred, will result in substantial business model innovation. Our book provides guidance to executives on how to go about doing this, because many are not that familiar with that process and with that type of thinking.

As we work with companies around the world, we see that they’re struggling. If you’re a mall, you’re trying to hold onto the retailers that lease space from you. But maybe they should think totally differently about the usage of the space, not just running after retailers and convincing them to continue to pay the rent. Maybe they should engage in different uses of the space. Maybe do some entertainment, maybe do some other things that would bring people back into malls, not just for shopping but for other activities that complement shopping.

Knowledge at Wharton: If readers take one thing away from your book, what do you want that lesson to be?

Amit: Pay attention to your business model strategy. It has become a strategic imperative and a key strategic choice that managers and entrepreneurs need to make. The business model requires an ongoing, innovative adaptation to the changing external environment. Make sure that your organization accepts change and has a business model innovation mindset to enable it to continue and prosper in the future.

Zott: I think the most important message to entrepreneurs and managers out there — and it’s a positive message — is that business model innovation has become a new form of innovation. It’s best conceived of as how to do business and how to do business in new ways. It’s centered on the firm’s activity system, and it represents a new form of value creation.

Think of it as a new type of innovation. You don’t have to be a rocket scientist. You don’t have to be an engineer. You don’t have to have a Ph.D. in anything in order to come up with a new business model idea. It’s very democratic, and it’s an equalizer. You can come up with new ideas, creative new ways of doing business, and build a fantastic new company around that. But as Raffi pointed out, in order to do this systematically and in a disciplined manner, you have to have a strategy for it, especially if you’re working for a large company. This is not just for start-up entrepreneurs, but it’s particularly important for established companies who need to reinvent themselves. And then COVID-19 presents us with a rationale for why it’s important to think about reinventing ourselves.

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Please note you do not have access to teaching notes, business model innovation: a systematic review and future research directions.

International Journal of Innovation Science

ISSN : 1757-2223

Article publication date: 25 November 2020

Issue publication date: 4 December 2020

The purpose of this paper is to systematically analyze the literature on business model innovation by identifying its triggers, enablers, barriers, dimensions, outcomes and highlight avenues for future research.

Design/methodology/approach

A systematic literature review of papers on business model innovation was conducted based on the recommendations of Tranfield et al. (2003) from 2000–2019. A total of 70 conceptual and empirical studies on business model innovation research spanning from 2000 to 2019 were analyzed based on different classification schemes.

The systematic review approach of this paper offers a new perspective in understanding business model innovation, bridges the gap in the extant literature by providing consolidation regarding the triggers, enablers, barriers, dimensions and outcomes of business model innovation and indicating avenues for future research.

Research limitations/implications

A review of literature on business model innovation carried out in this paper is expected to open up new horizons for future researchers to develop and empirically test frameworks related to business model innovation. The five themes identified to shed light on important aspects of business model innovation. These themes are expected to not only strengthen the theoretical foundations of business model innovation but also help practitioners develop and implement business model innovations in their organizations. In particular, the themes related to the enablers, barriers, triggers and outcomes of business model innovation can provide useful insights for practitioners.

Originality/value

This study is the first of its kind that has provided consolidation regarding the triggers, enablers, barriers, dimensions and outcomes of business model innovation.

• Business model innovation

Bashir, M. , Naqshbandi, M.M. and Farooq, R. (2020), "Business model innovation: a systematic review and future research directions", International Journal of Innovation Science , Vol. 12 No. 4, pp. 457-476. https://doi.org/10.1108/IJIS-06-2020-0081

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Copyright © 2020, Emerald Publishing Limited

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• Unlocking Business Model Innovation

Unlocking Business Model Innovation Defended on Friday, 21 October 2016

In the 21st century, consumers have an increasingly vast number of choices, yielding progressively less satisfaction, and firms have an ever expanding list of strategic choices, yielding progressively less value. Firms are forced to turn to innovative ways of doing business in order to satisfy customers and remain competitive.

When one speaks of innovation; images of new, technologically advanced or novel solutions for everyday needs are summoned. While this is entirely valid, it does not wholly encompass the concept of innovation. Having the most technologically advanced and up-to-date product offerings no longer suffices to satisfy growing consumer desires. Organizations have to split their focus to include business model innovation in the new business sphere and the crux of their success lies in recognizing the totality of business model innovation. It is as much about the end-state business model as it is about the path to implementation, and that in a holistic sense: the model, the people, and the environment.

This dissertation mirrors this perspective, attempting to pull apart the process and look through the keyhole at the inner workings of business model innovation. Each chapter is another step closer to capturing the totality mentioned but also further away from the business model itself. Starting close to current thinking - with a theoretical exploration of the business model innovation process - and ending with a new perspective, in an empirical investigation of the effect of the process on arguably the most fundamental part of an organisation, its people.

Innovation, storytelling, identity, business, model, leadership, networks, process, teams

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How Business Model Innovation Can Support Resilience and Fast Recovery: Lessons Learned from the Pandemic

• First Online: 02 August 2023

Cite this chapter

• Ana Aleksić PhD 6 ,
• Domagoj Hruška PhD 6 &
• Ivana Načinovič Braje PhD 6  

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Volatile business events and environmental disruptions as the coronavirus pandemic, significantly question existing organizational business models. They impose the need for adjustment of organizational practices, capabilities and value creation processes in order for organizations to perform in their optimal manner. In this chapter, authors study the process of business model innovation from the aspect of strategic thinking. Cognitive framework of radical and adaptive business model innovation as new model of business model innovation is proposed. In it, the leader’s business model cognitive framework is considered as a key influence in the process in which novel information is introduced, leading to the development of the new business model. Additionally, two case studies related to strategic responses of companies to the crisis caused by the coronavirus pandemic are analysed. Examples of two Croatian companies provide illustrations how resilience in the face of new and unexpected business disruptions can lead to strategic business model innovations that consequently lead to improved performance. By analysing two different approaches to business model change the objective of this chapter is to provide insight into how strategic thinking of business leaders can affect business model innovation and change in response to unpredicted events.

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Aleksić, A., Hruška, D., Načinovič Braje, I. (2023). How Business Model Innovation Can Support Resilience and Fast Recovery: Lessons Learned from the Pandemic. In: Sigurjonsson, T.O., Ruano, J.M., Profiroiu, A.G., Maciukaite-Zviniene, S., Dumančić, K. (eds) Cross-Driven Institutional Resilience. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-31883-2_7

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Business Model Innovation

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UNE launches three new majors to drive business innovation

Less than one year since its formation, the College of Business at the University of New England is once again expanding to offer several new programs consistent with shifting workforce needs. 

Starting this fall, the college will begin offering interdisciplinary degree programs in Accounting , Finance , and Marketing to meet the need for in-demand careers in Maine and the nation’s growing business sector. 

Using a cross-disciplinary, entrepreneurial approach, the College of Business fosters the skills and knowledge of future business leaders through innovative programs, experiential learning opportunities, internships, and a strong network of industry partnerships. As such, the new degree programs have been crafted to equip students with the necessary skills and expertise required for success in today's competitive business landscape. 

UNE’s B.S. in Accounting ensures students are equipped with modern techniques and technologies essential for success, while the B.S. in Finance prepares students for leadership roles in financial management, wealth management, and investments using new financial technologies while emphasizing social responsibility. 

The B.S. in Marketing will prepare students for dynamic careers at the intersection of culture and business, training them to adapt to new consumer behaviors through strategic planning and technology integration.

Through courses in design-thinking, data analytics, innovation technology, and international finance, business graduates will be poised to drive growth in their fields, said Gwendolyn Mahon, UNE provost and senior vice president for Academic Affairs.

“These new academic programs reflect the University’s commitment to meeting evolving industry standards and workforce needs while preparing students for the dynamic challenges and opportunities they will encounter in these fields,” Mahon said. “We are confident that our accounting, finance, and marketing graduates will be well-equipped to make a positive impact in businesses of all kinds across Maine and the nation.”

The College of Business also houses majors in Business Administration , Marine Entrepreneurship , Sustainability and Business , Sport Leadership and Management , and, as of November, a pioneering major in Outdoor Business and Innovation that will prepare students for dynamic careers in Maine’s $3 billion outdoor recreation sector.

Students enrolled in the latter program will leave UNE with industry experience through paid   internships and project-based learning provided in collaboration with Maine Outdoor Brands. The Maine Office of Outdoor is serving an advisory role in curriculum development for the program, which is the sole academic program in New England designed to address the growing need for skilled workers in this field. 

UNE’s College of Business , established in June 2023, supports experiential learning opportunities in preparing students for enriching careers and leadership positions with some of Maine’s and the nation’s most important employers. The University recently announced it has hired Norm O’Reilly, Ph.D., a leading business scholar with two decades of leadership experience in higher education , as the college’s inaugural dean. 

 Norm O'Reilly, Ph.D., inaugural dean of the College of Business

About the University of New England

The University of New England is Maine’s largest private university , with two beautiful coastal campuses in Maine, a one-of-a-kind study abroad campus in Tangier, Morocco, and an array of flexible, accredited online degrees . In an uncommonly welcoming and supportive community, we offer hands-on learning, empowering students to make a positive impact in a world full of challenges. The state’s top provider of health professionals, we are home to Maine’s only medical college , Maine’s only dental college , a variety of other interprofessionally aligned health care degree programs , as well as nationally recognized programs for marine science degrees , natural and social sciences degrees , arts and humanities degrees , and business degrees .