Knowledge Center

Business Model Innovation Helps a Business Fulfill Its Purpose

The primary goal of business model innovation is to realize new revenue sources by improving product value and how products are delivered to customers  A business model is the conceptual structure supporting the viability of a business, including its purpose and its ongoing plans for achieving them.

At its simplest, a business model is a description of how an organization fulfills its purpose. All business processes and policies are part of that model. According to the late Peter Drucker, a leading management consultant educator and author, a business model answers these: Who is your customer, what does the customer value? And how do you deliver value at an appropriate cost?

A business model is similar to a business plan in its makeup and content. However, a business plan specifies all the elements required to demonstrate the feasibility of a prospective business, while a business model demonstrates the elements that make an existing business work successfully.

The benefits of business model documentation include maintaining a focus on corporate goals, reviewing operational practices and ensuring that the two are congruent. A representation of a company’s business model can be incorporated into digital and print materials which may be shared with customers and partners. A mission statement or vision statement may be included in a business model.

Traditionally, financial goals have been the main focus of such models, but in recent years business sustainability and corporate culture have become increasingly integral parts of business plans.

Business model innovation is about fundamentally rethinking your business around a clear — though not always obvious — customer need, then realigning your resources, processes and profit formula with this new value proposition. It’s not easy and can take decision-makers out of their comfort zones. But the results can be dramatic.


What successes or failures have you created or experienced through business model innovation?

Leave a Reply

Your email address will not be published. Required fields are marked *

Let's Talk

Have an hour to get coffee? Learn what we can do for you.

PAI’s pro bono discovery process is a critical first step to improve your processes, products and people. Schedule now.

Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home/paiusaco/public_html/wp-includes/functions.php on line 3729

Notice: ob_end_flush(): failed to send buffer of zlib output compression (0) in /home/paiusaco/public_html/wp-content/plugins/really-simple-ssl/class-mixed-content-fixer.php on line 111