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Background note
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Reference no. IMD-7-2031
Authors: Paul Strebel
Published by: Institute for Management Development (IMD)
Originally published in: 2018
Version: 18.10.2018
Revision date: 14-Nov-2018

Abstract

This background note describes industry evolution as a sequence of business models that leading players often use to dominate the industry at different stages in its development. The sequence involves business models driven by Value Proposition Offerings that reflect increasing customization from the basic pioneering offering, towards satisfying different customer segments, tailoring integrated offerings to individual customers, and finally involving customers as development partners. And a complementary sequence of business models that reflect an increasing scope of efficiency in Value System Delivery from a volume efficient production platform, to including the whole internal organization in process efficiency, then incorporating external suppliers and distributors into modular efficiency, and finally involving customers, partners and other stakeholders in ecosystem efficiency. Disruptive technological innovation breaks the sequence.

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Abstract

This background note describes industry evolution as a sequence of business models that leading players often use to dominate the industry at different stages in its development. The sequence involves business models driven by Value Proposition Offerings that reflect increasing customization from the basic pioneering offering, towards satisfying different customer segments, tailoring integrated offerings to individual customers, and finally involving customers as development partners. And a complementary sequence of business models that reflect an increasing scope of efficiency in Value System Delivery from a volume efficient production platform, to including the whole internal organization in process efficiency, then incorporating external suppliers and distributors into modular efficiency, and finally involving customers, partners and other stakeholders in ecosystem efficiency. Disruptive technological innovation breaks the sequence.

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