TY - JOUR
T1 - Business models outside the core lessons learned from success and failure
AU - Bertels, Heidi M.
AU - Koen, Peter A.
AU - Elsum, Ian
PY - 2015/3/1
Y1 - 2015/3/1
N2 - OVERVIEW: Leaders at incumbent firms increasingly recognize that in order to sustain growth and protect their companies from disruption, they must innovate "outside the core"-beyond the familiar markets and competencies on which the company has built its existing business. Outside-the-core innovation projects, which target new customers or non-consumers in new markets, can lead to high growth. However, they are also very risky: the odds of success for outside-the-core projects rapidly drop with each step outside the core. In a study of six outside-the-core projects using a business model perspective, we found that, contradictory to common wisdom, the likelihood of failure is not related to how many steps the project is outside the core. Instead, the risk of failure is infl uenced by false assumptions about the distribution channels, cost structure, unit margins, and velocity elements of the innovation, which are often carried over from the incumbent business model.
AB - OVERVIEW: Leaders at incumbent firms increasingly recognize that in order to sustain growth and protect their companies from disruption, they must innovate "outside the core"-beyond the familiar markets and competencies on which the company has built its existing business. Outside-the-core innovation projects, which target new customers or non-consumers in new markets, can lead to high growth. However, they are also very risky: the odds of success for outside-the-core projects rapidly drop with each step outside the core. In a study of six outside-the-core projects using a business model perspective, we found that, contradictory to common wisdom, the likelihood of failure is not related to how many steps the project is outside the core. Instead, the risk of failure is infl uenced by false assumptions about the distribution channels, cost structure, unit margins, and velocity elements of the innovation, which are often carried over from the incumbent business model.
KW - BUSINESS model innovation
KW - Business model canvas
UR - http://www.scopus.com/inward/record.url?scp=84927618605&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84927618605&partnerID=8YFLogxK
U2 - 10.5437/08956308X5802294
DO - 10.5437/08956308X5802294
M3 - Article
AN - SCOPUS:84927618605
SN - 0895-6308
VL - 58
SP - 20
EP - 29
JO - Research Technology Management
JF - Research Technology Management
IS - 2
ER -