Company, according to the authors, are increasingly turning to business model innovation as an alternative or supplement to the product or process innovation. Drawing on extensive research they conducted over the past decade, the authors define the company's business model as a system of interrelated and interdependent actions that define how the company is "doing business" with their customers, partners and suppliers. In other words, the business model is a set of specific activities of the system is carried out to meet the immediate needs of the market, as well as specifying which parties (the company or its partners) that are working, and how these activities are related to each other. Innovative business model can occur in several ways: (1) by the addition of new activities, such as through forward or backward integration, (2), linking into new directions, or (3) by changing one or more parties that perform any activity. Changes in the business model, the model can be subtle, the authors note, even if they can not have the potential to disrupt the industry, they can provide important benefits to the innovator. The authors offer a number of examples of innovative business models and represent the six questions for managers to consider when thinking about the business model innovations: 1. That the proposed requirements could be met through a new design model? 2. What novel activities required to meet these basic needs? 3. As required activities will be linked to each other in a new way? 4. Who should perform each of the activities that are part of the business model? 5. As the value created by the new business model for each of the participants? 6. What revenue model is consistent with the business model of the relevant part of the total value it creates? "Hide
by Raphael Amit, Christoph Zott Source: MIT Sloan Management Review 11 pages. Publication Date: April 1, 2012. Prod. #: SMR415-PDF-ENG
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