Why does Innovation often Requires Changes in the Business Model?

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Anneke Zwart
Student (University), Netherlands

Why does Innovation often Requires Changes in the Business Model?

In cases of major product/technical/process innovation, it is often necessary for organizations to also adapt or reinvent their business model. Why is the reinvention of a business model in case of innovation often necessary?
  1. MAXIMIZING REACH AND SUPPORT: Usually the innovation will already spark disruption, but changing the business model is necessary so as to expand the reach of this innovation and to develop a comprehensive value network so as to maximize the support of the innovation.
  2. ALIGNMENT: In order for innovations to be efficiently designed, implemented and/or launched, the innovation needs to align with the organization’s strategy and its business process, and this requires the reinvention of the business model. An innovation without a business model that aligns with the innovation often leads to cases in which the innovation completely misses its target.
Thus, rethinking your business model in cases of product, process or other types of innovation is necessary, as it helps to maximize the support and reach of the innovation and to assure that the innovation will reach the targets and objectives set.
Source: see PPT ”Innovation and Business Models

  Derek Lark
CEO, Australia

Is Business Model Change a Necessity in Innovation?

These are really broad statements. Generally they (...)

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