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The Digifit is an application that tracks and records the metrics and performance of the athletic endeavors.
Dell’s just-in-time ordering increases its competitive edge.
Business model innovation inspiration gallery
Menno van Dijk,
BUSINESS MODEL INNOVATION
DISRUPTS MASSIVE INDUSTRIES.
Compete on quality
Business model innovation
MOST COMPANIES STRUGGLE WITH
THEIR INNOVATION PERFORMANCE
SOURCE: McKinsey Global Innovation Survey, McKinsey Innovation Practice
Percentage of global executives who agree
models are at risk
Innovation is important
to our growth strategy
We are satisfied with our
AT THNK, WE HAVE SYNTHESIZED
BUSINESS MODEL INNOVATION
INTO 4 MAJOR REFRAMES
THESE REFRAMES IMPACT DIFFERENT
ELEMENTS OF THE BUSINESS MODEL
FOR EACH OF THE REFRAMES, WE
HAVE BEEN COLLECTING
THESE SERVE AS AN INSPIRATION
Innovating in customer
FROM LOYALTY TO EMPOWERMENT
By empowering the
customer, businesses can
lower their production
costs, reach a wider
audience and fulfill the
growing need for user
Do it yourself (DIY) is creating something without the
support or expertise of professionals. This can save cost
and time and gives the satisfaction of self-actualization
Could you make your service DIY?
IKEA delegates the
of the furniture to
makes it easy for
anyone to create
using drag and drop
tools, templates and
Freemium is a pricing strategy by which an offering is
provided free of charge, but charges for proprietary or
premium features, functionalities or virtual goods. The
customer is empowered by accessing a free version and
having the choice to upgrade to the premium version. This
strategy also lowers the customer acquisition costs.
How could you provide a free version of your offering to lower
your customer acquisition costs?
Dropbox is a file
hosting service that
offers a premium
non-profits to pay
for sponsoring their
Self-actualization and self-expression give the customer
the opportunity to fulfill their own talents and express their
own ideas, feelings and thoughts. This is usually made
possible via provision of design tools plus raw materials.
Could you provide the tools so your customers design their own
Quirky designs and
informed by the
ideas and votes of
MakerLabs is a
with the tools and
expertise they need
to build what they
Disintermediation removes intermediaries in a supply
chain, like brokers, agents, shops. Direct (digital) contact
is created between producer and customer. This saves
costs and avoids the frustration of dealing with the
Could you skip the channel and go direct?
E-Trade gives direct
access to specialist
research and stock
dependence on a
money directly to
the extreme poor,
involvement of an
Inclusive sourcing means connecting consumers directly
to the local producers, contributing to their livelihood and
improving their position in the value chain. The target
market is usually sustainability-conscious.
Could you connect your customers directly to the source
consumers to local
Tony Chocolonely is
strives to have a
production chain by
with cocoa farmers.
Mass customization combines the low cost per unit of
mass production with flexibility of individual customization
through a pre-selected range of options, thereby offering a
tremendous increase in variety and choice to customers.
Could you offer much, much more choice?
design of their own
Nike apparel, offline
customers choose a
fabric to customize
their apparel. Each
fabric supports a
Unbundling and re-aggregation breaks up and re-
configures content or information to individual personal
preference in a way that is unmatchable by the old order
of traditional providers (e.g., music, education,
Could you unbundle your product and sell the components
UNBUNDLING AND RE-
Apple’s iTunes sells
music in individual
tracks as to entire
television shows by
episode rather than
as entire season.
online courses from
allowing students to
follow classes from
Offering the “long tail“ means offering products that are in
low demand or have low sales volume but that collectively
make up a market share that rivals the relatively few
current bestsellers and blockbusters. Success is mostly
dependent on whether the store or channel is large
Could you offer a long tail of low demand products without lots
an unlimited ability
to hold and stock
products and can
therefore offer items
of which only a
small number will
ever be sold.
Etsy is a global
which are sold via
Businesses with a “consume and do good” offer sell a
good or service that makes the world better or at least
donate a portion of the profits to a good cause. This
business model taps into the market of consumers who
want to contribute to a better world.
How could consuming your product make the world a better
CONSUME AND DO GOOD
Toms has a buy-
business model: for
every pair of shoes
purchased, one pair
of shoes is given to
a child in need via
Warby Parker is an
that donates a
portion of its profits
partners, who sell
glasses at an
affordable price in
Business models that are based on unique experiences
create memorable events for customers, and the memory
itself becomes the product. Customers pay for the feeling
that the ‘experience’ provides when they engage in it,
such as at Disneyland Parks.
How could your service provide a life experience?
that the customer
will feel right at
home in any of its
for the audience,
who then wants to
Multi-sided platforms are platforms where users
(producers and consumers) can create, share and
exchange things without intervention from the platform
owner. In this model consumers are often also producers.
How could you support your customers transacting with each
The App Store
allows users to
were developed by
other users with
Apple's iOS SDK.
Crowdrise is an
platform that allows
anyone to either
start a campaign or
support an existing
Collective pricing is a model by which products and
services are offered at a significantly reduced price on the
condition that a large number of buyers make the
purchase. This allows consumers to buy at prices
otherwise only available to professional volume buyers.
How could you achieve major volume discounts for your
daily deals of up
to a 90% price
that a set
power to negotiate
prices, starting with
access to clean
Performance contracts specify desired results by using
sophisticated tracking. These provide the service provider
much latitude in deciding how to deliver these results.
“Social impact bonds” (SIB) are one example allowing
private sector service providers to deliver on social
How could you do a better job if you were under a performance
MDRC leads a
program to reduce
recidivism and is
payed based on
admissions via a
SIB with the
equips its products
with sensors that
tracking and allow
Revenue partnerships aim to increase traffic to your
offering via affiliate partners. Affiliates are rewarded based
on the results obtained. This business model innovation is
particularly relevant for e-commerce platforms, for which
the pool of affiliates is easily accessible and unlimited.
How could you leverage revenue partnerships to increase your
the entry points to
the trading platform
qualifying traffic to
Grameen Bank is a
serving the bottom
of the pyramid.
Innovating in access to
FROM ASSETS TO ACCESS
Increased digital connectivity an
open source data means that
increasingly leverage data to ta
into under-utilized resources.
Collaborative consumption encourages sharing, reuse
and (re-)distribution of excess or surplus capacity of
human or physical assets, moving consumers from
ownership to user-ship. This model requires real-time,
location-specific and reputational information.
How could you leverage the underused assets and resources in
Peerby is an app
Uber enables any
qualified driver with
vehicle to provide
Crowdsourcing is the process of obtaining needed
services, ideas, financing or content by soliciting
contributions from a large group of (laymen) people,
rather than from traditional (professional) employees or
suppliers – often leveraging internet communities.
How could you leverage the crowd to come up with better and
lower cost products?
Kickstarter is a
leverages the direct
individuals to bring
to life creative
crowd funding of
loans for solar
Re-use involves collecting and repurposing products for
further use in a profitable and sustainable way. Also
known as up-cycling or cradle to cradle, it can reduce
sourcing costs as the offering is manufactured out of what
would normally be considered as waste.
How could you re-use the products and services you produce?
Desso is a
aims to have all its
the end of their life
cycle and the
materials reused or
Hipcycle is the
store for ‘upcycled’
goods, i.e. new
products made of
A supplier network is a series of connected facilities and
distribution channels. By adopting a focus on access
rather than ownership, supplier networks can limit risks
associated with the production process and increase the
overall efficiency of the delivery system.
How would you use a supplier network to replace in-house
Li & Fung is a
global sourcing firm
that relies on
and costs in the
factories of their
from farm to
network of farms
and selling fresh
food directly to
FROM EFFICIENT TO INTELLIGENT
Innovating in activities
Businesses that leverage dig
to create a learning system g
Further control over costs an
new revenue opportunities.
Companies in the ‘behavior change’ model encourage
consumers to reduce consumption, change purchasing
patterns or modify daily habits by empowering them with
knowledge about their consumption and helping them
track product use.
How could you encourage your customers to change their
consumers to buy
less and repair
more by making
sourcing part of its
The Digifit is an
tracks and records
the metrics of the
Infomediaries collect information about the
service/product and price of various providers and share
this with consumers to facilitate comparison. At the same
time, infomediaries share information about online
behavior of consumers to the service providers to allow
How could the information you collect about your customers
help fill a user need?
Skyscanner is a
tool that aggregates
the most up-to-date
flight prices from
Ashoka is a global
network of social
around the world.
When a product is sold as a service, a previously one-
time transaction is now provided on a per-use basis. This
creates a rich flow of information on usage with in turn can
be used for product improvement (e.g., upgrades) and
How could you leverage the usage information if your product
becomes a service?
EVERYTHING AS A SERVICE
charges users by
the minute, with
hourly and daily
With Hilti Fleet
charge covers all
tool, service and
“Produce to demand“ means that the offering is produced
or prepared specifically when someone requests it. This
approach, adopted by pioneering company Dell, also
allows for the offering to be customized as desired by the
customer, reduces costs associated with storage, and
leads to leaner supply chains.
How could you produce to demand?
PRODUCE TO DEMAND
consumers vote on
which means shirts
are only produce
demand has been
Robots are machines that have been programmed with
the intelligence necessary to perform specific tasks,
usually jobs that are particularly dangerous, unhealthy or
stressful for humans to perform. By equipping robots with
software that learns, the task delivery is constantly
How could you make your automation learning?
AUTOMATION AND ROBOTICS
employees with the
most up to date
location of goods
The Da Vinci
Innovating on cost
FROM LOW TO NO COST
Business models that exp
zero-variable cost of prod
offer products or services
at a very low price or for fr
ee to rapidly
Build scale. This includes
Providing service through
A business model that does not have any variable costs
can grow without seeing an increase in cost structure.
This model is usually associated with an automated
customer relationship, no incremental production costs,
and an unlimited supply of the offering. As a result, the
offering can be made available for free or almost free.
How could you turn your business into a zero-variable cost
Google’s cost base
does not go up with
hence Google can
offer its service to
users for free.
lights in Africa,
‘Service to Software’ means using computer software as a
substitution to humans for fulfilling specific tasks.
Common examples include translators, ATMs, and
automatic checkouts. Such a move can lead to almost
zero operating costs and increased performance.
How could you turn your service into a software solution?
FROM SERVICE TO
needs for medical
uses an electronic
system to improve
quality of care in
clinics in East