Business Innovation: Beyond Technology

Business Innovation: Beyond Technology

Don Scott-Kemmis
Copyright: © 2014 |Pages: 32
DOI: 10.4018/978-1-4666-5828-8.ch008
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Abstract

This chapter presents the case for a wider understanding of innovation beyond technology and beyond novel products and processes. It examines the dynamics of Business Model Innovation, which refers to fundamental changes to the total formula for business success. New approaches to value creation and appropriation through business model innovation are particularly vital in times of turbulence and realignment faced by firms in high cost operating environments. Business model innovation can create new and sustainable sources of competitive advantage for firms, securing their survival and growth. The chapter discusses the evidence for the role of business model innovation in the growth of leading firms and in the restructuring of markets. It provides an overview of the frameworks for characterising and analysing business models. The options for different types of business models likely to be successful in high cost environments are described.
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The Changing Context: Driving The Need For New Business Models3

The rapid growth of mass production in the mid-1900s centred on the growth of large factories, reaping economies of scale and clustered with their suppliers in a few regions and supplying domestic and export markets. The follower East Asian countries such as Japan and Korea sought to replicate this model, using protected home markets to build the full assembly of suppliers, eventually reaching the global frontier of efficiency, quality and innovation. However, the diffusion of ICT, more open markets and lower transport costs has led to unbundling these sectors, lowering the barriers to entry into these now mature industries. The evolution of global supply chains is summarised in Figure 1. To participate in the global supply chain, a firm does not need to master an entire production process, but to excel in a specific phase.

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