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VISUALIZING BUSINESS
MODEL INNOVATION
Improvements to a business model may benefit the business directly (through improved cash
flow and payment schedules) and indirectly (through improved customer relationships or sales
volumes).
In this exercise, you will consider the potential impacts of some financial business model
innovations. You will imagine a new competitor that has implemented some of these business
model innovations, which have a dramatic impact on your business’s market and context. You
will then reflect on whether you can implement any of these changes in your own business to
improve your market position and increase growth. In the 10,000 Women course,
Fundamentals of Customers and Competition, you can explore the importance of
understanding your business’s customers and competition in more depth.
The matrix on the next page shows a range of potential business model changes, highlighting
their benefits for both the business and its customers. (You should be familiar with some of the
models from earlier in the course, and in your business practice.)
Using the matrix:
• Consider each new model, and reflect on how a fictional competitor using this model
could affect your business. (Think about your pricing strategy and Customer Buying
Process as you do this.)
• Select three models that you think would have a significant impact on your business.
• Answer the reflection questions that follow the matrix.
BENEFITS FOR THE BUSINESS BENEFITS FOR CUSTOMERS
It receives
It receives It receives It is likely They They
payment It receives They SELECT
payment higher to receive They get a receive buy
earlier in recurring spread THREE
more overall more discount something more
the income the cost OPTIONS
quickly income business for free easily
process
Surge pricing
Raising prices when demand is X X X
high.
Retainers
Charging a regular fee for X X X X X
offering support services.
Early payment discounts X X X X
Incentivizing early payments.
No win, no fee X X X
Only charging when successful.
Bundling
Offering a discount for set X X X X
groups of products/services.
Freemium
Offering free access, but
X X X X
charging a premium for
additional features or services.
Value-based pricing
Basing prices on the product or X X
service’s perceived value.
XaaS pricing
Charging for regular access to a X X X X
resource or service.
Pay what you want
Price is set by the customer X X X
based on satisfaction.
Pay online X X X X
Payment online at point of sale.
Pay upfront X X
Payment at point of sale.
Pay in installments X X X
Repeated smaller payments.
Reflection questions:
1. Which business model innovations has your new fictional competitor implemented?
2. What effects will this have on your customers and market? What is it specifically
about these innovations or changes that would be so relevant and transformative to
your sector/circumstances?
3. The changes for the fictional business may not have been entirely realistic, and you
might not be able to fully recreate them. Are there any elements that you could
implement and explore in your own business?
Next steps
Would you consider any of these innovations for your business? If the innovations make you
stand out from your competition and give you an edge, you might want to consider adding them
to your plans for future growth. You could also discuss them with your team.
If you find something you would like to try, it is important to experiment with your innovation on a
smaller scale first to successfully manage risk (for example, you could try it out in a limited
region, or on certain customers).