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Abstract

A business model that can link a new technology to an emerging market need is the key to industry transformation. When Apple coupled the iPod with iTunes, it revolutionized the audio devices market. But most attempts to introduce a new model fail. The authors did an in-depth analysis of 40 companies that had launched new business models in a variety of industries, and here they present the key takeaways from their research. They looked for recurring features in the models and found six: personalization, a closed-loop process, asset sharing, usage-based pricing, a collaborative ecosystem, and an agile and adaptive organization. No model displayed all of them, but having a higher number of features usually correlated with a greater chance of success at transformation. (The taxi service Uber can claim five of the six.) Companies that are thinking about changing their business model or entering an industry with a new model can rate themselves on the six features to assess the likelihood that they'll be transformative.

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Abstract

A business model that can link a new technology to an emerging market need is the key to industry transformation. When Apple coupled the iPod with iTunes, it revolutionized the audio devices market. But most attempts to introduce a new model fail. The authors did an in-depth analysis of 40 companies that had launched new business models in a variety of industries, and here they present the key takeaways from their research. They looked for recurring features in the models and found six: personalization, a closed-loop process, asset sharing, usage-based pricing, a collaborative ecosystem, and an agile and adaptive organization. No model displayed all of them, but having a higher number of features usually correlated with a greater chance of success at transformation. (The taxi service Uber can claim five of the six.) Companies that are thinking about changing their business model or entering an industry with a new model can rate themselves on the six features to assess the likelihood that they'll be transformative.

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