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20 Types of Business Model Innovation

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Business model innovation is the discovery of new ways of capturing value. Historically, most businesses are based on a handful of business models such as producer, middleman and retailer. It's not easy to discover new business models but it's potentially rewarding. The following are common types of business model innovation.
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Operations

Changing the structure of operations. For example, a shift to distributed electricity production with solar panels as opposed to centralized power stations.

Pricing

Challenging existing pricing models. For example, a flat rate price for unlimited streaming media as opposed to purchasing songs and movies as digital products.

Distribution

New ways of reaching the customer. For example, the combination of product showrooms and ecommerce as opposed to traditional retail.

Customer Experience

Shifts in customer experience such as a virtual product showroom that allows customers to view digital twins of products in their home.

Services

Wrapping things in value added services. For example, products that are sold as a monthly service with full support.

Attention Economics

New ways of engaging a target market. For example, advertising in a game environment.

Convenience

Ways of saving the customer time and effort such as ecommerce that reduces the effort of shopping.

Decision Complexity

Reducing the complexity of decision making processes for customers. For example, a review site for home improvement contractors that makes it easy to find a professional with a good reputation.

Control

Allowing customers to customize and control things in a way that was never possible before. For example, the ability to develop a unique pair of shoes without much knowledge of fashion design.

Information

New ways to discover information such as the invention of the internet search engine.

Social

Changing the way that people socialize. For example, a digital community for a hobby that creates a sense of connectedness across a subculture.

Latent Needs

Discovering new value for customers such as a completely new type of product. For example, the companies involved in inventing snowboarding as a new sport.

Labor

New ways of creating value such as a system of free agents as opposed to employees.

Capital

New types of capital or ways of sharing it. For example, the invention of the theme park.

Markets

Creating new markets for the exchange of value. For example, an app that allows people to easily rent out property they aren't using.

Efficiency

Products and services that create more output for an unit of input. For example, a new mode of transport that dramatically reduces energy costs.

Productivity

Tools for people that allow them to create more with an hour of work. For example, photo editing software's impact on the photography business.

Performance

Leaps forward in the performance of products and services. For example, the introduction of high speed trains that allow trains to compete with airlines for short domestic routes.

Quality

Valuable and difficult to replicate improvements in quality such as the cultivation of a new type of artisanal food. For example, the invention of ice wine.

Peak Experiences

Going beyond regular customer experience to experiences that people view as important to their identity or life. For example, space travel represents a potentially large future industry.
Overview: Business Model Innovation
Type
Definition
The discovery of new ways of capturing value.
Related Concepts

Business Models

This is the complete list of articles we have written about business models.
Added Value
Aftermarket
Agent
Arbitrage
Auctioneering
Barter
Augmented Product
Bespoke
Bricks And Clicks
Business Markets
Business Products
Business Services
C2B
Club Goods
Coercive Monopoly
Collective Business
Concession
Complement Good
Consumer Business
Consumer Goods
Collectives
Consumer Services
Cottage Industry
Creative Services
Digital Business
C-to-C
Digital Services
Convenience Good
Ebusiness
FMCG
Gig Economy
Middleman Cutting
Global Business
Designer Label
Haute Couture
Digital Goods
Intermediary
Long Tail
Fast Fashion
Market Maker
Financial
Middleman
Niche
One Stop Shop
Productization
Recommerce
Retail
Managed Services
Services
Used Goods
Markets
White Label
Micropayments
Microtransactions
Modular Products
Original Equipment Manufacturer
Product-as-a-Service
Razor And Blades
Store Within A Store
Two Sided Market
Utility Computing
VAR
More ...
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Business Models

A list of common business models.

Intangible Value

The definition of intangible value with examples.

On-Demand

The definition of on demand with examples.

One Stop Shop

An overview of one stop shop with examples.

Aftermarket

The common types of aftermarket.

Durable Products

The definition of durable product with examples.

Digital Goods

The definition of digital goods with examples.

Microtransactions

The definition of microtransactions with examples.

Examples of Superior Goods

The definition of superior goods with examples.

Innovation

A comprehensive list of innovation techniques.

Innovation Process

A complete guide to the innovation process.

Knowledge Economy

The definition of knowledge economy with examples.

Adoption Rate

The definition of adoption rate with examples.

Early Adopters

The definition of early adopter with examples.

Change

The common types of change.

Experiment Controls

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Research & Development

A reasonably complete overview of research & development techniques.

Entrepreneurship

The common characteristics of entrepreneurship.
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