Advancing technology and changing market conditions have contributed to an accelerating evolution of business models, many of them service-based. As industrial companies try to deal with digitization and disruption and stay ahead of the competition through improved performance, many regard business model innovation as a key priority.
While strategies are plans of action to deliver on objectives, business models set the framework for how a company generates, delivers and monetizes value. They are formed through strategic action, but once designed and deployed, they set constraints for strategy and implementation. Good business models are logically consistent, self-reinforcing and robust. Nevertheless many new models either fail or don’t reach their full potential, as their designers do not sufficiently appreciate customer value perceptions or buying behavior. Similarly, they often misjudge their models’ economic effects, scalability and risks; But predicting how new models will perform in competitive environments is difficult.
Developing and deploying service-based business models is a complex undertaking. It usually entails significant changes to offerings, value propositions and the nature of customer relationships. It encompasses different value chain structures and unfamiliar risks. A different business model usually requires the development of new or additional operational capabilities and even changes in organizational set-ups with substantial impact on incentives, management systems, required mindsets and culture. Most of all however, service-based business models require a change in the approach to design of offerings to encompass not only products, but the complete service surround, the customer interaction and experience and the value creation process.
We help companies develop and implement service-based business models, from initial market research to design and full deployment. Our experience in diverse service markets and industries, provides us with a unique perspective on trends, technologies and customer demands, as well as a solid understanding of potential pitfalls and risks. Our engagements range from short, focused interventions to comprehensive and sustained support, including re-designing the innovation process and structures in the organization with the purpose of spurring innovation driven growth and market leadership.