Beacons for Business Model Innovation

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Beacons for Business Model Innovation
How applying two pattern recognition tools can empower companies
to pick and develop breakthrough winners in their innovation portfolio.
BY GEOFF TUFF AND STEPHEN WUNKER
DOB L I N
Deloitte Consulting LLP
Business model innovation is a hot topic in management thinking these days, even though there
seems to be little agreement about what it looks like and even less about how to discover it. But there
is no reason for business model innovation to feel mysterious or hard to achieve. By using analytic
tools that provide better decision-making insights, executives can vastly improve their innovation
success rate—and help their business model investments generate bigger returns.
Tupelo, Mississippi has seen its share of people upending
tradition. Not only is this small Southern town the
birthplace of music revolutionary Elvis Presley, it is also
ground zero for a new movement that seeks to transform
a totally different field—how we care for our elders.
Rejecting traditional models of senior living—those that
feature a large medical staff tending to hundreds of
patients in an institutionalized setting—a Tupelo doctor
created the first “Green House” senior home. These
facilities contain no more than a dozen residents. The
residents interact with each other in a large common
area, play a role in decision-making, and are cared for
by a single multi-tasking nurse’s aide. As the name
suggests, the place feels like a house, not a hospital
or a nursing home. Residents found the Green House
experience so compelling that the concept has now
been replicated more than 250 times in 36 states. The
radical approach to care is mirrored by an equally unique
economic model that slashes staffing and overhead
costs. Due to the small scale of the facility and the fact
that there is just one multi-tasking worker, total staff
time is thirty minutes less per resident-day, even while
nursing care time (what matters most to the residents) is
ninety minutes more. Green Houses are a new business
model founded on a total rethinking of the “customer
experience” of elder residents.
By contrast, business model innovation in the newspaper
industry seems to have lost touch with the customer and
has instead become a euphemism for cost cutting. Even
some of the leading institutions in the market seem to
have done little new except for cutting journalists and
putting articles online. Many in this industry seem to
have taken an inward-looking view by addressing the
simultaneous implosion of advertising and circulation
through thinner papers with more wire service stories.
A more customer-focused view might have considered
the many touchpoints newspapers can have in people’s
lives and communities and addressed these challenges
through innovations such as the syndication of content
and creation of focused reader communities. There is
little reason, for example, that newspapers could not
have dominated the online classified industry rather
than ceding it to online institutions such as Craigslist,
Monster.com, and eBay.
Because of the industry’s inward-looking perspective, it is
not a shock that newspapers have largely failed to create
new business models. The promise of business model
innovation—to create new product and service categories
that make money in new ways and achieve accelerated
growth—generates enthusiasm but comes with a big
catch: it requires true integrative change across many
functions of a company, from finance and operations to
manufacturing, marketing, and sales. It requires new skills,
new behaviors and the courage from leaders to think, act,
and lead differently.
Executives can increase their odds of success by using a
rigorous set of decision-making and pattern recognition
tools. In this article, we will briefly touch on two critical
diagnostic tools, the Ten Types of Innovation® framework
developed by Doblin, the innovation practice of Monitor
Deloitte within Deloitte Consulting LLP, and Economic
Value Estimation framework created by pricing strategist
and Monitor Deloitte senior advisor, Tom Nagle.
By taking advantage of these tools, corporate leaders can
develop insights that help them analyze which business
model innovation projects will offer the most value for
customers, allowing them to pick the winners and shut
down the losers.
Ten Types of Innovation®:
Meshing Inventive Profit Model with New
Forms of Customer Engagement
In examining more than 5,000 innovations— successful
and not—over the past 15 years, the team at Doblin
has classified innovation activities into Ten Types of
Innovation. Sadly, most of these innovations have not
been successful (defined as returning their cost of
capital), achieving in aggregate an abysmal success rate
of 4.5 percent. Why? The vast majority of them—and
especially the failed attempts—have been centered on
product performance and product system innovation
(see Figure 1 below). This focus area should not be
surprising: new product ideas are easy to dream up and
just as easy to kill in the average company’s stage-gate
process. If they are lucky enough to make it through to
market launch, many product-focused innovators find
themselves vulnerable to competitors. This challenge is
becoming only more daunting as competition heats up in
all corners of the world, especially in emerging markets
where patent law may be less effective and mastery
of complex distribution systems can matter more than
having the best product on the shelf. By contrast, the
most successful innovations studied share two important
THE PROMISE OF BUSINESS MODEL
INNOVATION—TO CREATE NEW
PRODUCT AND SERVICE CATEGORIES
THAT MAKE MONEY IN NEW WAYS AND
ACHIEVE ACCELERATED GROWTH—
GENERATES ENTHUSIASM BUT COMES
WITH A BIG CATCH.
1
Beacons for Business Model Innovation
traits. First, they focus on shifts in the profit model and
means of customer engagement. And second, they
employ multiple types of innovation—frequently six
or more—making them genuinely new and different
“business models.” These are breakthrough innovations
that are difficult to replicate because they deliver unique
value to customers and are integrative in nature (across
company functions). In our research, only two percent
of the initiatives demonstrated these attributes and yet
they delivered 90 percent of the cumulative value of all
the innovations studied.
In the course of this research, we also discovered that it is
very hard to innovate around profit models and customer
engagements and not pull along other types of innovative
change. For real business model innovation, a company
must assemble six or more types of innovation, with at
least one innovation type coming from each of the three
major categories (configuration, offering, and experience).
Changing these fundamentals requires significant shifts
across the business value chain. For example, it is a steep
challenge to build a great, new customer engagement
without also innovating your offering, processes,
partnerships, and payment terms.
The findings of this research, as documented in Doblin’s
book Ten Types of Innovation: The Discipline of Building
Breakthroughs, lead to a relatively basic condition for
innovation success: to join the minority of companies
that have really created value from innovation, develop
concepts that are “anchored at the ends” of the Ten
Types of Innovation spectrum and contain possibilities
for at least four additional types of innovation as
well. Sometimes, this may involve creating a thrilling
experience for your customers and figuring out how to
make money from it in novel ways—think Apple® iTunes®
application program or Nestlé’s Nespresso. Other times,
it may involve delivering at least an acceptable product-
service package much more cost effectively than is
possible using the accepted business models—think IKEA
or Southwest Airlines.
Estimating the Economic Value of Innovative
Business Models
Effective business model innovation is the ability
to discover new ways of making money. It is often
developed by tying scalable revenue or margin
opportunities to untapped sources of customer value
or by creating value more cost-effectively than the
competition. For decades, precepts of good marketing
have taught us that offers should satisfy customer needs.
The difficulty, of course, is that customers often cannot
provide a full and accurate description of what they
want. They may not have the language for it, they may
be (unconsciously) motivated to obscure the truth, they
may be basing their consideration on past experience
and it is unlikely they can predict how their needs will
evolve in the future.
Figure 1: Ten Types of Innovation®
The most successful business model innovations combine new ways
of making money with innovative, great customer experiences.
Customer
Engagement
Profit
Model
Network Structure Process Product
Performance
Product
System
Service Channel Brand
CONFIGURATION OFFERING EXPERIENCE
Most companies focus here
Biggest opportunities are anchored here
Source: Larry Keeley, Ryan Pikkel, Brian Quinn and Helen Walters. Ten Types of Innovation:
The Discipline of Building Breakthroughs (Hoboken, N.J.: John Wiley & Sons) 16-17.
BY CONTRAST, THE MOST SUCCESSFUL
INNOVATIONS STUDIED SHARE TWO
IMPORTANT TRAITS. FIRST, THEY FOCUS
ON SHIFTS IN THE PROFIT MODEL AND
MEANS OF CUSTOMER ENGAGEMENT.
AND SECOND, THEY EMPLOY MULTIPLE
TYPES OF INNOVATION.
2
Beacons for Business Model Innovation
Therefore, companies are increasingly tapping into the
field of design-driven innovation for inspiration about
how to explore these customer needs and desires.
Design-driven innovation relies on research methods not
traditionally employed by businesses in order to discover
insights that may lead to a thrilling customer experience.
Video ethnography, field observation, and in-depth
interviews—the tools of cultural anthropologists—
are behind some of today’s most exciting customer
discoveries. These tools provide insight beyond what
customers say they want, and into their latent, emerging,
and wholly unmet needs.
In order to tie insight to profitable opportunities, we
like to borrow the Economic Value Estimation (EVE)
tool pioneered by pricing strategist Tom Nagle. EVE is
a simple framework used to break down the economic
value of an offer into its component parts and compare
this value to a next-best competitive alternative (see
Figure 2). By combining EVE with non-traditional
research techniques (focused on generating new
customer experiences), companies can begin to
hypothesize what cost and value would be associated
with any new offer.
Establishing the EVE of a potential innovation can help
a company establish a threshold for when a project is
worth pursuing. Initiatives qualifying as “me-too” or “low-
payback” should be scrutinized early in the development
process and either killed or reshaped. “High-payback”
innovations will either leverage a higher absolute level of
value than alternatives or a lower (though still acceptable)
level of value using a much lower cost structure. Find the
innovations within your portfolio that have the highest
ratio of Total Economic Value to Reference Value and
those that combine multiple types of innovation (at
least six), those are likely your winners. Of course, for
a breakthrough innovation creating a new market, a
Reference Value will not exist and that in turn will magnify
the innovation’s Economic Value.
It is enlightening to examine an innovation through the
Economic Value Estimation model and the African telecom
company Celtel (now owned by India’s Bharti Airtel)
provides a vivid example. To address the inefficiencies of
cash transactions in third world markets, Celtel launched a
mobile commerce service targeting business-to-business
payments. Potential corporate customers were initially
skeptical of paying Celtel transaction fees until Celtel’s
staff rode along with trucking fleets and discovered just
how valuable mobile commerce could be. For example,
during a typical eight-hour delivery run, three hours could
be spent counting cash in very small bills, and cash could
be counted eight times between the time it was paid and
ultimately banked.
Even more compellingly, Celtel demonstrated how mobile
handsets could empower distributors to accept real-time
orders and adjust trucking loads for demand swings as
they happened, realizing additional revenue potential
they were losing out on by taking orders by hand during
the prior day’s delivery. Celtel calculated that its services
were worth 1 to 4 percent of the total transaction value
depending on a client’s circumstances.
4
Ethnographic
research gave Celtel the power to price mobile commerce
according to the value it created and develop insights into
totally new directions for the service.
Figure 2: How EVE Pinpoints
High-value Innovations
Source: Thomas T. Nagle, John E. Hogan and Joseph Zale,
The Strategy and Tactics of Pricing, Fifth Edition
(Saddle River, N.J.: Prentice Hall), 20.
Positive
Differentiation
Value
Negative
Differentiation
Value
Reference
Value
Total
Economic
Value
Differentiation Value:
The value to the customer
(both positive and negative)
of any differences between
your offering and the
reference product
Reference Value:
The price (adjusted for
differences in units) of the
customer’s best alternative
3
Beacons for Business Model Innovation
THESE TOOLS PROVIDE INSIGHT BEYOND
WHAT CUSTOMERS SAY THEY WANT,
AND INTO THEIR LATENT, EMERGING,
AND WHOLLY UNMET NEEDS.
4
Getting Started
Any company that wants to take action on Ten Types of
Innovation and EVE diagnostic work will need to start
with two fundamental requirements for success:
Understand the basic operating parameters of
your company to be able to determine what is
economically and organizationally viable and
what is not.
Know the collection of profit models that the
business world has used over time and understand
how these analogs might—and might not—be
applied to your company (See Figure 3).
Operating parameters. The first requirement for success
is that you understand the basic operating parameters of
your company to determine what is viable. To think about
the hidden shackles that prevent business model change,
untangle the web of business processes, supply chain
partnerships and other relationships that enable a firm to
succeed. These include the suppliers, sales channels, and
even types of customers to target.
Which of these operating parameters would be
threatened by a new business model? How could
a new model start “off the radar” so key stakeholders
are not threatened? Think through all of the company’s
competencies, rules, and behaviors that facilitate
the current model, and how these might need to
change. For instance, will sales compensation need to
emphasize more teamwork than at present? Will the
emphasis be on a different sort of buyer—one with an
office and not a cubicle?
Proactively addressing these hurdles in focused pilots
can reduce an organization’s reluctance towards
change while at the same time revealing unseen
dependencies. Prototyping via pilots enables you to
test the flexibility of your company—a key need for
business model innovation.
Because these approaches are not simply window
dressing and checklists for one-off projects, they must
become corporate capabilities that enable a company
to sustain its position over time. Senior executives
need to lead by example and embed flexibility into their
company. Sometimes, the solution is not to invent a
completely new way of doing business, but instead to
do “old things in new ways” and discover fundamentally
cheaper methods to deliver existing sources of value to
your customers.
Inside the Business Model Innovations at Three Leaders
Geisinger transforms reimbursement model to reward positive patient outcomes. ProvenCare, a system of care
for coronary artery bypass grafts (CABGs), uses a bold profit model: for a single fee it guarantees a healthy CABG
patient 90 days post-procedure. If there are any complications within that window, Geisinger covers the entire cost
of follow-up care. This is a non-trivial guarantee, before this system on average 38 percent of patients experienced
such complications. Since the ProvenCare program was introduced in 2006, patients have been less likely to be
readmitted; have spent fewer days in the hospital; and are more likely to return directly to their own homes instead of
going to a nursing home.
1
MediaTek moves back in the value chain to dominate China’s low-cost mobile phone chip sets. MediaTek was
founded in 1997 and has become one of the largest fabless semiconductor companies in the world. MediaTek
provides a turnkey solution to low-cost phone manufacturers, including the processing chip, software architecture,
phone-building instructions, and even dedicated consultants. The company introduced its first low-cost
smartphone chipset in 2011 and captured 50 percent of the Chinese smartphone market within 18 months.
2
HSBC First Direct creates a branchless bank. First Direct was founded in 1989 based on the insight that a
significant number of bank clients did not use branch services and those who used the services reported
relatively low customer satisfaction. In order to serve these market segments, First Direct offered a new approach
to banking in the U.K.: customers could access all banking services over the telephone 24 hours a day, 7 days a
week, 365 days a year. This model was in stark contrast to traditional banks, which were generally open from 9
a.m. to 4 p.m. and closed for most of the weekend. Since then, First Direct has continued to lead in innovative
services, such as being one of the first banks with online and mobile banking. As a result, it has attracted more
than one million customers since going “branchless.”
3

1
2
Beacons for Business Model Innovation
EXAMPLE TACTIC DEFINITION
Figure 3: 21 Sample Profit Models from Successful Innovators
5
Ad-supported Provide content or services for free to one
party while selling listeners, viewers or
“eyeballs” to another party.
Google’s AdSense charges sponsors to place links
on users’ (free) search results pages; the revenue
supported the majority of Google’s operations.
Auction Allow a market—and its users—to set
the price for goods and services.
Electric Authority, in New Zealand, de-centralized
energy generation and electricity retailing by creating a
whole-sale market for electricity in which generators and
retailers can make offers and bids to supply and off-take
electricity through trades occurring every half hour.
Cost
Leadership
Keep variable costs low and sell high
volumes at low prices.
IKEA offers furniture at low prices by selling ready-to-
assemble furniture with limited variation by region or
country in design, hardware, and instructions.
Disaggregated
Pricing
Allow customers to buy exactly—
and only—what they want.
Free Mobile, a French telecommunication company,
offers monthly contracts starting at ¤2 for 2 hours
of talk, unlimited texts and 50MB of 4G. Contracts
are modular and allow customers to easily select the
services they desire.
Financing
Flexible
Pricing
Capture revenue not from direct sale of
a product, but from structured payment
plans and after-sale interest.
Kickstarter creates a new opportunity for raising funds
for innovative ideas, including Pebble Technology’s
E-Watch that raised over $10 million from nearly
70,000 different investors. Pebble Technology is now
developing the next generation smartwatch.
Vary prices for an offering based
on demand.
American Airlines implemented “Super Saver” fares
in 1977 that enabled variable pricing depending on
demand patterns in an effort to fill seats during less-
traveled times.
Float Receive payment prior to building the
offering; earn interest on that money
prior to delivering the goods.
Next Restaurant diners buy advanced tickets to the
restaurant brainchild of Chicago chef, Grant Achatz. By
getting customers to pay upfront for their meals, Next
earns interest on working capital and limits the risk of
empty tables or no-shows.
Forced
Scarcity
Limit the supply of offerings available,
by quantity, time frame, or access, to
drive up demand and/or prices.
Rue La La is an exclusive, invitation-only website
where members can buy high-end designer goods at
deep discounts—but only for a limited time or until
stock sells out … whichever comes first.
Freemium Offer basic services for free, while charging
a premium for advanced or special features.
Skype developed free Skype-to-Skype calls, but charges
a premium for outgoing and incoming calls to landline
and mobile phones.
Bundled
Pricing
Sell in a single transaction two or more items
that could be sold as standalone offerings.
Verizon created FiOS and bundled together high-speed
Internet, cable television, and phone, offering the three
services at a single, discounted price.
Beacons for Business Model Innovation
6
EXAMPLE TACTIC DEFINITION
All company examples are used for illustrative purposes only.
Membership Charge a time-based payment to
allow access to locations, offerings, or
services that non-members don’t have.
Costco‘s annual membership fees provide members
with access to merchandise, travel deals, and insurance,
while contributing significantly to the club’s profitability.
Micro-
transactions
Sell many items for as little as a
dollar—or even only one cent—to
drive impulse purchases.
Kartrider, an online multiplayer racing game, offered
players virtual items in-game, including different types
of vehicles and spray paint, that added new functionality
for nominal fees.
Premium Price at a higher margin than competitors,
usually for a superior product, offering,
experience, service or brand.
Lexus entered the luxury car market with a
premium price by creating a quality vehicle and
elevated dealership and service experiences. This
combination has led to high customer ratings and
repeat customer transactions.
Risk Sharing Waive standard fees or costs if certain
metrics aren’t acheived, but receive
outsize gains when they are.
Progressive customers are welcoming the company
into their cars to award bonuses based on achieving
shared goals. The Snapshot Program gives customers
the chance to share their driving habits, which
provides Progressive with more data to effectively
price premiums.
Scaled
Transactions
Maximize margins by pursuing high-
volume, large-scale transactions when
unit costs are relatively fixed.
Morgan Stanley’s costs for managing large sums
of money were roughly the same as for small
sums, but fees—and thus profit—escalated with
larger transactions.
Subscription Create predictable cash flows by
charging customers upfront (a one
time or recurring fee) to have access
to the product or service over time.
Netflix turned the video rental industry on its head
with the implementation of a subscription model
(no more late fees!).
Switchboard Connect multiple sellers with multiple buyers.
The more buyers and sellers who join, the
more valuable the switchboard becomes.
Ebay collected fees for posting items and took a per-
centage of every item sold; in return it offered sellers
centralized access to millions of buyers and collectors.
User-Defined Invite customers to set a price they
wish to pay.
Radiohead went direct to fans when it offered its album
In Rainbows online and allowed fans to set the price they
wanted to pay for the entire album.
Metered Use Allow customers to pay only for what
they use.
ZipCar members are charged a small membership fee.
Above that, drivers are only charged when they take out
a car. This flexible metered use model allows customers
to rent cars for as little as an hour at a time.
Licensing Grant permission to a group or
individual to use your offering in a
defined way for a specified payment.
Apple® iTunes® Store and App Store
SM
offer the
content that powers its collection of hardware devices.
Both stores make money by taking a cut of every song,
video, media subscription, and application sold.
Beacons for Business Model Innovation
Profit models. The second requirement for success is to
understand the types of profit models that exist across
the business landscape today. Through its retrospective
look at past successful innovations, Doblin has catalogued
the 21 different profit models that are typically used by
corporations today (as shown in Figure 3).
Knowing these models is necessary but not sufficient
for successful business model innovation. To really
unlock the potential behind alternate profit models,
first understand the orthodoxies of a company and its
industry—i.e., “just the way things are done around
here”—and then consider how analogous models from
other industries might be put to use.
As an example of industry orthodoxy, let’s return to the
world of Ad-Supported content as described in Figure 3.
One approach is represented by Google’s funding of its
billion-dollar business. Known as “do-it-yourself ads,”
Google’s AdWords began as simple text advertisements
that users bought via a bidding process. Google later
implemented a “pay-per-click” model, which meant
it only collects a fee from the advertiser when a user
clicks on its ad. This shift was effective, as advertising
accounted for 91 percent of Google’s $56 billion in
revenues for 2013.
5
Adapting a different approach to remain relevant in the
changing advertising environment, Schibsted Media
Group, parent of the Norwegian online classified company
FINN.no, allows users to place any ad for free while
paying a premium for preferred placement. For instance,
advertisers could pay a fee to guarantee a more prominent
position on the website or to cross-post their listings in
other newspapers within the Schibsted media family.
Finding and using analogies across industries—to apply
the business model of one industry to another—can
reveal exciting new opportunities. Analogies help
companies break free of the orthodoxies of their industry
by allowing them to imagine how “borrowing” from
another industry can turn their model on its head.
Consider the Netflix subscription model, in which
customers stream popular TV shows and movies
or exchange DVDs-by-mail for a low monthly fee.
Competitors are increasingly following this model as
customers turn away from brick-and-mortar, pay-per-
rental business. This “subscription” model—well known
in the publishing world—could very well have applicability
in many other industries. Netflix continues to innovate
by shaking up traditional models of paid media content
by creating its own. It has developed award-winning
television series and extensions of popular shows that
are available exclusively to its members.
Taking Action
While many companies have a well-defined process
for creating new products, very few have articulated
a means for shaping new business models. To start
tapping into the enormous value offered by business
model innovation, first take a detailed look at what
you already have in your portfolio. Carve out the few
initiatives that appear to have the characteristics of
future winners by using the Ten Types of Innovation
and EVE models as pattern recognition tools. If none of
the initiatives are winners, focus your team on creating
unique, unimagined customer experiences with revenue
models that break your industry’s conventional wisdom.
To reduce the chance of getting dragged down the route
of incrementalism, look for inspiration from the outside.
7
Beacons for Business Model Innovation
Three Business Models to Watch
Skype for Business - Leveraging the “Freemium” business model (Figure 3), Skype provides users with free voice and
video calls made within its network. For businesses whose employees are frequent users, Skype has begun selling
premium services that integrate Skype into a company’s central Private Branch exchange phone system. This service
allows for the easy distribution of credit to individual accounts for calls made to non-Skype phones and facilitates
both instant messaging and file sharing.
Virgin Pulse - Challenging the “Pay for Performance” business model orthodoxy, Richard Branson’s Virgin Group has
created a model it calls “Pay for Prevention.” Virgin Pulse backs corporate wellness programs by engaging employees
in measurable activities such as wearing a pedometer and participating in biometric monitoring. At some companies,
participants earn reward points based on how effectively they are meeting fitness goals.
eBay Enterprise - Taking advantage of strong e-commerce growth, eBay Enterprise leverages the company’s years
of expertise in the online marketplace to create, develop, and run online shopping sites for brick-and-mortar brands.
These sites help brands better serve their customers through new sales channels.
8
Seek insights, perspectives on your industry orthodoxies,
and understanding of where the real value lies both for
your customer base, as well as for those who are not yet
your customers. It is critically important to focus first on
the demand side of this work and then wend backwards
through the capability, asset, and cost implications.
As with most breakthrough innovation, think about
back-of-the-envelope cost calculations—not detailed
economic models—and look for opportunities to remove
pieces of the cost structure as you explore new user
and revenue possibilities.
However, using these analytic tools will not improve the
innovation success rate on their own. From the start,
careful attention must be paid to process in order to
mitigate potential risks such as: the subtle re-direction
of new business model efforts to look more like the core
business; resistance by business functions impacted
by the new model; an inability to rapidly iterate; and
an overload of organizational change. To help reduce
such risks, a cross-functional governing team of senior
executives should be created to establish a clear strategic
mandate and set realistic success metrics.
Similar to the approach used by venture capitalists, this
team of executives should use frequent board meetings to
focus on solving problems as opposed to spending time
reviewing presentations by project leaders. They should
focus their project leaders on risk mitigation—rather than
rapid revenue growth—through the discovery of unknowns
and measurement of progress in the early phases of
project. Like venture capitalists, the team will prize
flexibility and focus innovation project leaders on a small
handful of issues at a time. This approach can help reduce
the downside of fast change and increase their ability to
respond to lessons learned from the marketplace.
This combination of tested analytics tools—the Ten Types
of Innovation framework and EVE model—with a strong
governance team will help executives vastly improve their
innovation success rate. Taking this disciplined approach
can help business model innovation projects create value
for customers and generate significant returns for the
company and its shareholders.
Beacons for Business Model Innovation
Endnotes
1
Geisinger, “ProvenCare by the Numbers,” www.Geisinger.org, http://www.geisinger.org/provencare/numbers.html.
(Accessed 03/21/2014).
2
Yang, Lin. “Providing a Template to Challenge Apple.” The New York Times, Business Day edition, sec. Technology,
01/06/2013. http://www.nytimes.com/2013/01/07/technology/07iht-mediatek07.html?_r=0 (Accessed 03/21/2014).
3
Kleinman, Mark. “HSBC Eyes ‘Non-Bank’ In First Direct Revamp.” Sky News, sec. Business, 03/13/2013.
http://news.sky.com/story/1064020/hsbc-eyes-non-bank-in-first-direct-revamp (Accessed 03/21/2014).
4
Stephen Wunker, Capturing New Markets: How Smart Companies Create Opportunities Others Don’t
(McGraw-Hill Education, 09/26/2003), chapter four.
5
Google.com, “2013 10K report.” Last modified 12/31/2013. http://investor.google.com/pdf/20131231_google_10K.pdf.
(Accessed 03/21/2014).
Acknowledgments
The authors wish to acknowledge the contributions of Holly Listmann, insight lead at Doblin,
and David Shear, formerly a consultant at Monitor Group, in the preparation of this article.
About the Authors
Geoff Tuff is a principal of Deloitte Consulting LLP and leads Doblin, the innovation
practice of Monitor Deloitte.
Stephen Wunker is a managing director of New Markets Advisors and is the author of
Capturing New Markets: How Smart Companies Create Opportunities Others Don’t.
About Doblin
Doblin is one of the world’s leading design-driven innovation practices. Taking a user-centric approach,
our multi-disciplinary teams combine strategy and design expertise to help clients set their innovation
strategy, build bold breakthroughs, and improve their innovation effectiveness. Headquartered in Chicago
with offices in New York and London, Doblin is part of the Monitor Deloitte service offering.
About Ten Types of Innovation®
Ten Types of Innovation is a practical and tangible tool developed by Doblin to help
executives and managers develop and implement innovation approaches more
successfully in any context, industry or market. Learn more about the Ten Types of
Innovation book at www.doblin.com/tentypes/
For more information, contact:
Geoff Tuff
Principal and Doblin Lead
Deloitte Consulting LLP
[email protected]
“Beacons for Business Model Innovation” was first published in the Perspectives series by Monitor Group in 2010.
The article has been updated to reflect current trends and examples.
Steve Wunker
Managing Director
New Markets Advisors
[email protected]
This publication contains general information only, and none of the member firms of Deloitte Touche Tohmatsu Limited
or their related entities (collective, the “Deloitte Network”) is, by means of this publication, rendering professional advice
or services. Before making any decision or taking any action that may affect your business, you should consult a qualified
professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any
person who relies on this publication.
As used in this document, “Doblin” means the innovation practice of Monitor Deloitte within Deloitte Consulting LLP, a subsidiary
of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its
subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
“Beacons for Business Model Innovation” is an independent publication and has
not been authorized, sponsored, or otherwise approved by Apple, Inc.
Copyright © 2014 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited

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