Business Innovation Models

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Service science is an emerging term and field first introduced by IBM, that involves the approach of studying and designing service systems that is used as an application for business, science, or even engineering disciplines to help an organization perform optimally. Essentially, it is the study of service, our most important sector in our economy. Service involves both a provider and a client working together to create value. The diverse field of service involves retail, transportation, marketing, health care, and also many more. The field of service science isn’t only focused on service-side, but also on the systems aspect. The study of service systems also involves developing and improving certain systems that will help companies and corporations. An article composed by IBM, a company that was driven by hardware and systems in the 1980’s and now is driven by services and developing systems, analyzes 3 types of business model innovations that are should used in companies that are service-driven. Business model innovations range from redefining the boundaries of a company, redefining existing industries, developing new technology, or overall improving the service it can deliver to its consumer. According to IBM’s definition, business model innovations can be split into three categories: industry model, revenue model, and enterprise model. All of these models can be used in combination or alone, all you need is a strategy and execution. The first type of model, the industry model, involves the innovation of industry value chain by moving into new industries, redefining existing industries or creating entirely new ones, also by identifying/leveraging unique assets, as quoted by IBM’s case study. Or the industry model approach can be called horizontal integration. For example, Virgin, ran by entrepreneur Richard Branson, is one of best example of the use of the

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