The Idea in Practice
UNDERSTAND YOUR CURRENT BUSINESS MODEL A successful model has these components: • Customer value proposition. The model helps customers perform a specific “job” that alternative offerings don’t address. Example: MinuteClinics enable people to visit a doctor’s office without appointments by making nurse practitioners available to treat minor health issues. • Profit formula. The model generates value for your company through factors such as revenue model, cost structure, margins, and inventory turnover. Example: The Tata Group’s inexpensive car, the Nano, is profitable because the company has reduced many cost structure elements, IDENTIFY W HEN A NEW MODEL MAY BE NEEDED These circumstances often require business model change: An opportunity to . . . Address needs of large groups who find existing solutions too expensive or complicated. Capitalize on new technology, or leverage existing technologies in new markets. Bring a job-to-be-done focus where it doesn’t exist. A need to . . . Fend off low-end disruptors. Respond...
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