The wheel of business model reinvention: how to reshape your business model to leapfrog competitors

Abstract

In today's rapidly changing business landscape, new sources of sustainable competitive advantage can often only be attained from business model reinvention that is based on disruptive innovation and not on incremental change or continuous improvement. Extant literature indicates that business models and their reinvention have recently been the focus of scholarly investigations in the field of strategic management, especially focusing on the search for new bases of building strategic competitive advantage, not only to outperform competitors but to especially leapfrog them into new areas of competitive advantage. While the available results indicate that progress is made on clarifying the nature and key dimensions of business models, relatively little guidance of how to reshape business models and its organizational fitness dimensions have emerged. This article presents a systemic framework for business model reinvention, illustrates its key dimensions, and proposes a systemic operationalization process. Moreover, it provides a tool that helps organizations to evaluate both existing and proposed new business models.

Keywords:

• New business models
• disruptive innovation
• continuous improvement
• sustainable competitive advantage

Acknowledgements

The authors wish to thank Michael Beer, Russell Eisenstat and the colleagues at the Center for Organizational Fitness for their helpful inspiration and insights. We are also thankful to Charles Baden-Fuller and Richard Whittington for their comments and to our colleagues at Harvard Business School since some of our thoughts have been further enlightened during various discussions when sparks flew with Dorothy Leonard, Morten Hansen, Alan MacCormack, as well as Heike Bruch, Georg von Krogh and Thomas Davenport.