My understanding of the article by Johnson, Christensen and Kagermann:
To determine whether a company needs to reinvent its business model, following steps need to be undertaken:
- Find what makes the existing model successful or unsuccessful.
- Find out signals that suggest that the model needs change
- Decide if changing the model is worth the effort
Understanding the current model
A successful model has three components:
Customer Value Proposition: providing customers a unique offering that competitors cannot provide
Profit Formula: the model generates revenue for the company through multiple factors like revenue model and inventory turnover
Key resources and processes: the company has in place the required resources and processes to deliver value to the customers
Identifying the need for new model
An opportunity: when large consumer segments find existing solutions too expensive or complicated, a new technology opening up new avenues etc
A need: response to shift in competition or overcoming the challenge of new or evolving competitors
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