There has been a growing interest in business model innovation (BMI). What exactly is BMI and how does one go about it?
Business model innovation is a new way the company creates and delivers value to a set of consumers and customers at a profit. For easier understanding, BMI has 3Vs and 4Cs.
The 3Vs refer to value creation (target market and value proposition), value capture (revenue model and cost) and value maneuvering (resources and processes, as well as value network), which all aim to attain superior economic value (profit and cash flow) for the firm.
Imagine a triangle with each of the 3Vs at each corner and their two elements mentioned above on each side. For the value proposition to reach its target market, the appropriate channel needs to be established. For the value proposition to reach sustainable revenue, customer bonding strategy is needed. A new configuration of process and resources may be needed to reduce cost, while complementors need to be identified in the value network to deliver the new value created. Read more