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The Competitive Importance of Continuing Business Model Innovation

Apr 22, 2008
I make a strong claim that you should pay attention to:
There is an ultimate competitive advantage you can gain. Do you believe that? Probably not.

Most people have never seen a competitive advantage last. What usually happens is that everyone quickly tries to copy or outdo what works, or the novelty of the advantage simply wears off.

Despite those limitations, in recent decades continuing business model innovation has provided lasting competitive advantages and built huge amounts of value. Why does this approach work?

Think of initial skill in business model innovation as being similar to the skill of the world champion chess player. Although the champion will not win every game, the champion will win more than anyone else by applying well-developed talent and experience. The only way that there will be a substantial setback with such expertise is if the champion bets too much on the results of a single game.

Like a chess match, continuing business model innovation calls for the skill to create new competitive advantages just as rapidly as the opportunities arise. These benefits multiply throughout the match.

But unlike chess, each competitive improvement helps lock out competitors and creates ongoing advantages that push the business model innovator ahead in future competitive tussles. It's as though the player with a skill advantage also earns an advantage in the number of playing pieces before the next game based on past wins.

In addition, successes bring more involvement by stakeholders and more commitment to the company's improvements. This help is like having a team of chess masters and the top chess computer counsel the chess champion before each move.

Further, the business model innovator can change the rules of the game in his or her favor so that his or her pieces are more powerful than the opponent's. These sorts of developing advantages are what I mean when I say that applying skill in business model innovation is the ultimate competitive advantage. Your skill and starting position can advance permanently relative to your competitors.

The opportunity for you is to be like the world champion chess player with an advantage in the number of playing pieces and the rules, while chess masters and the best chess computer advise you. The threat to you is to be that player's opponent.

This is a new concept. Prior to the 1990s, companies seldom attempted to improve business models as frequently as possible. Now that the lesson is known, it's clear that such rapid evolution of business models will be the norm rather than the exception among high performing businesses.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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