It’s the business model, stupid! A wake-up call for incumbents like Daimler

News is full of cool technologies like drones, blockchains or autonomous cars and their disruptive character. Traditional firms have switched to innovation mode and have now cool digital transformation units to use these new technologies. Everybody is happy. Great, isn’t it?
Or wait? Can this really work that easy?

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It’s not the price, stupid. It is the value (proposition)

We always hear that the customer is not buying because the price is too high. Is the price important?

Of course, most clients will say yes in any survey or in sales negotiation. Actually, there are departments at your clients that know only two words: Too expensive!! Give me rebates! That is the purchasing department and it is their job to negotiate the price of a purchase. However, is this true, that even for B2B customers only the price is important?

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Business model innovation show superior impact on performance

Good news for all the evangelist of business model innovation. McKinsey has developed an innovation performance score (IPS) that shows that “a significant degree of business model innovation seems to be necessary for superior innovation impact.”

The idea of business model innovation was not developed at the large consultancy companies like McKinsey, BCG or booz. Probably they were too busy optimizing the current business of their current clients. And usually their clients are the incumbent in their respective business. Probably, the large consultancies are trapped what Clayton Christiensen calls resource dependency. Christiensen and others argue that you are dependent in your strategic decision from your main sources where you get your resources from and most of the time it is from your existing clients. In the case of the large consultancies the customers are the incumbents that lose the most from business model innovation.

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Great Innovation: Renovate, don’t replace

Werner Näf had a very simple idea. If your water pipes at home need to be replaced why not renovate them from within? So he invented the LSE-System. It can clean the pipes from the inside using special equipment, dry and then recoat them and by the way save up to 75% in costs and hassle.

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Great Innovation: Getting a job done

Often one hears that everything is already invented and that only incremental improvements are possible. Well, tell this to Mr. Krinner. He has invented two products that just changed the way how jobs are getting done. He invented the Krinner Christmas tree stand and the ground screw.

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