As IBM Business Institute and Harvard Business School professor Christensen said, a company's business model is the basic method of doing business), which contains four parts: customer value proposition, profit formula, value chain location, key resources & processes.
Business model innovation is to change the basic operation methods of enterprises. In general, there are four ways: the revenue model innovation, enterprise model changing, the industry model innovation, and technology-driven innovation.
To change the enterprise model is to change the role that an enterprise plays in the industrial chain, that is, to change the match between "make" and "buy". In general, this change is achieved through vertical integration or sale and outsourcing. For example, Google realizes people obtain information from Desktop to the mobile platform, as a desktop search engine, it will gradually lose its competitive edge on the implementation of vertical integration, thus Google makes acquisition of Motorola mobile phones and mobile platform Android operating system, entering the mobile field platform, changing its position in the industrial chain and business model.
Changing industry model is the most radical business model innovation, which requires a company to redefine this industry, enter or create a new industry. For example, IBM promotes Smart Planet Initiative and cloud computing, re-integrates resources, enters new areas and creates new industries, such as business process outsourcing and business transformation services, IMB strives to become the steward of the overall enterprise business operations. It’s the same with Amazon, its ongoing business model innovation chain extends rearward, such as providing business users with Business Infrastructure Services such as logistics and information technology, opening their own 20 global cargo distribution centers, and vigorously entering cloud computing, finally becoming the leaders providing relevant platforms, software and services.
The fourth method is to change the technical mode. As product innovation is often the main driving force of business model innovation, technological change as well. Enterprises can introduce radical technologies to lead their business model innovation, likewise, many companies use the Internet for business model innovation. Today, the most promising technology is cloud computing, which provides many new user value, thus providing opportunities to make enterprise business model innovation. (www.chinainout.com)
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