Müller-Roterberg Handbook of Business Model Innovation

Tips & Tools on How to Innovate Business Models
1. Auflage 2021
ISBN: 978-3-7526-1970-6
Verlag: BoD - Books on Demand
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 348 Seiten

New business models are supposed to provide answers to never-asked questions about problems that everyone is waiting for solutions to. This book is for founders and managers who may deal with innovations of business models directly or indirectly. You will find countless tips, recommendations, checklists and methods in this book on how to identify, analyze, develop, change and manage new business models.

Dr. Christian Müller-Roterberg is professor at the Ruhr West University of Applied Sciences in the field of technology and innovation management as well as entrepreneurship. Prof. Dr. Christian Müller-Roterberg has several years of experience in the implementation of innovation projects in cooperation with companies. He works in projects with internationally active industrial and service companies as well as numerous start-up companies. He also advises companies and holds workshops using methods such as design thinking, the lean startup approach and the business model canvas. He has published several books and more than 30 German and English publications in the field of innovation management and entrepreneurship. He was actively involved in several start-up projects and carried out the due diligence review for the IPO of a start-up company. He also worked for the German Federal Ministry of Education and Research, where he was responsible for the promotion of research projects, in particular with regard to start-ups and cooperation between industry and science. Prior to that, he was responsible for technology transfer at the Charité University Hospital in Berlin. There he supervised company founders and advised on patents. He had completed a distance learning course in the field of industrial property rights. He also qualified as an internal auditor in the field of quality management. He wrote his doctorate in business administration at the Technical University of Hamburg at the Institute for Technology and Innovation Management. He spent several months in Japan to conduct a study on entrepreneurship activities in Japan. He received his diploma from Braunschweig Technical University and spent a year in the USA at the Massachusetts Institute of Technology (MIT) for his thesis. Further information can be found at www.innovationsratgeber.de.

Autoren/Hrsg.

Müller-Roterberg, Christian

Leseproben

1
What is Business Model
Innovation?
1 What is Business Model Innovation?
"If you always do what you’ve always done, you’ll always get what you’ve always got.“ - Henry Ford In recent years, the importance of business model innovations has become increasingly apparent in research and practice (see, among others, Amit/Zott (2012), Chesbrough 2006, Johnson/Christensen (2008), Massa/Tucci (2014)). Before the subsequent chapters with tips & tools explain in detail the development of successful business model innovations, the following section will briefly discuss what is meant by business model innovations, what relevance they actually have for business practice, and how an innovation process can look like in the overall picture. The latter is described step by step in the following chapters. A business model is the description of the way in which a company creates value for certain customers, creates and delivers this value and generates sustainable revenue growth from it (see Osterwalder/Pigneur (2010), p. 14). The business model is thus the implementation and concretization of a strategy and represents the link between strategy and the individual business processes (see Osterwalder/Pigneur (2010)). In addition, the terms business idea, business model innovations and business plan are also to be understood as follows in the sense of a practice-oriented definition. The business idea concerns only a part of the business model (such as an idea for a product or service innovation) and can at the same time be an impetus for a business model innovation (see below). Unlike product, service, process and social innovations (see gray box below), a business model innovation should always involve changes to several building blocks of a business model at the same time (see Lindgardt et al. (2009), p. 2), and always contain a certain degree of novelty - either in its individual elements or seen as a whole (see Björkdahl/Holmén (2013)). Finally, the business plan (at company level) or business case (at project level) is the written documented concept of a business model and provides additional information about steps of implementation and financing. What is meant by business model innovation? Innovations can be differentiated according to their subject area. The following types of innovations are available here: Product innovations are innovations of a physically tangible product, Service innovations are intangible and represent changes in the service industry, Process innovations are planned changes in the process of manufacturing goods and creation of services, They serve to increase e,g, labor productivity (efficiency) and have a direct effect on the supply side, Social/organizational innovations include changes in the organization of work and in social issues, This type of innovation can also be found under the term "administrative innovation", Examples of this type of innovation are new remuneration or participation systems, expansion of tasks, bonus systems, social benefits and/or further training activities, Business model innovations are targeted changes to existing business models or the creation of new ones, They are about gaining a competitive advantage by differentiating oneself from competitors, A business model describes how the company can generate added value and benefits for the customer and where the success potential of a business idea lies in terms of sales, costs and earnings, Business model innovations are far-reaching, strategic innovations because they change the fundamental structure of a business, Since, by definition, a business model always comprises a company in its entirety or at least an entire business unit, implementing several completely different business models would be a complicated and complex task, Only one business model per business unit or company is therefore recommended (see Johnson (2010), p, 167), Nonetheless, depending on the specific object of the innovation and the customer segment, it may make sense to use different design options. For example, completely different types of customer relationships or sales and communication channels may be required for the same product with different target groups. In addition, radical and disruptive innovations often require a different business model, i.e. in the end, these (often but not always!) are also business model innovations at the same time. The importance of business model innovations for entrepreneurial practice is widely recognized in research (see Amit/Zott (2001), Chesbrough (2006)). Initial studies indicate that there is a positive correlation between business model innovations and the growth or success of a company (see Amit/Zott (2012); Massa/Tucci (2014)). The Boston Consulting Group postulates in a study that innovations in business models are five times more successful than product/service innovations (Lindgardt et al. (2009)). A study by IBM reports similarly on business model innovations, and illustrates here an annual profit margin growth of more than 5% - also five times the product/service innovations (IBM 2006). Johnson/Christensen (2008) identified that 40% of the companies that have been included in the list of the world's 500 top-selling companies (Fortune Global 500 companies) over the last 25 years would have achieved this through business model innovation. In this context, Clayton Christensen of Harvard Business School developed the Theory of Disruptive Innovation, which explains that start-up companies in particular introduce business models with a disruptive character into an established industry (for background information on the Theory of Disruptive Innovation, see the grey box below). Theory of Disruptive Innovation From his findings on patterns of industrial evolution, the US-American researcher Christensen (1997) recognized that so-called disruptive innovations often do not come from the incumbent companies themselves, but are introduced by new "players" such as start-up companies. However, the incumbent companies adopt the new technology much later or even too late to survive themselves. Christensen speaks here of a dilemma of disruptive innovation for established companies. For there are also rational reasons for not making a rapid change to technology that is not yet efficient (Christensen (1997)). Disruptive innovations often achieve increasing competitive advantages through simplicity, convenience, user-friendliness, accessibility and a favorable price for the customer. Christensen describes this disruptive technological change in eight phases as follows (source: Christensen (1997)) Technologies develop faster than market needs. Incumbent companies tend to "overengineer". The emergence of a market vacuum for simple, cheap products that redefine customer value is occurring. Disruptive innovations are easier, cheaper and/or more convenient. Disruptive innovations initially do not meet the quality requirements of the mass market. Disruptive innovations are initially only attractive for a small market segment. Further development of disruptive innovations leads to the point that they will soon meet the basic requirements of the mass market. Incumbent companies ignore disruptive innovations until it is too late. There are many explanations for the challenges faced by established companies and market leaders when it comes to disruptive innovations. On the one hand, this may be due to (rather irrational) cultural/psychological reasons such as the arrogance and habituation of the current entrepreneurial success as well as the security and short-term thinking of managers. But there can also be economic reasons: Leaving competence that has secured market leadership in the past is very risky and can mean the loss of the investment in terms of people, machines, know-how, etc. In addition, the cost structure of established companies (especially due to high fixed costs) often forces them to open up large markets, whereas markets from disruptive technologies are often very small at the beginning. It is therefore only rational to pursue consistent marketing and customer proximity, oriented towards the "average customer" (mass). This is accompanied by a focus on cost reductions, efficiency increases, optimization of existing processes and an emphasis on incremental innovations. This orientation is reflected in a corresponding "efficiency culture", which in turn explains the cultural and psychological reasons mentioned above. The following (general) recommendations can be derived from these findings by Christensen (1997): Avoiding a purely strategic-systematic search for new markets and new technologies, but also the use of explorative approaches see chapter 2.2, as well as the Lean-Startup method see chapter 5.1). Avoiding too quantitative and present oriented evaluation of new technologies or innovations. Avoiding too strong orientation towards the...