Business Model Innovation
Business Model Innovation (BMI) is systematic business model transformation for companies looking to evolve their existing model. We use proven innovation patterns to translate existing strengths into new value creation — without jeopardizing the current business.
- Analysis and evaluation of the existing business model
- Identification of suitable innovation patterns
- Design and validation of the new model
- Transformation planning and phased implementation
Who Is Business Model Innovation For?
BMI is for established companies looking to evolve or fundamentally transform their business model. Typical starting situations:
- Margin pressure: The core business generates less and less. New revenue sources are needed.
- Disruption: A new competitor or technology threatens the existing model.
- Growth ceiling: The current model doesn’t scale further. Linear growth hits its limits.
- Customer churn: Customers switch to providers with more modern offerings (e.g., subscription instead of one-time purchase).
- Strategic realignment: The corporate strategy has changed, but the business model lags behind.
- Technological change: New technologies (AI, IoT, cloud) enable models that weren’t possible before.
BMI is particularly suited for companies with a certain maturity — early-stage startups typically need Business Design instead, as they don’t yet have an existing model to transform.
Our Approach
We work pattern-based: business model innovation follows recurring patterns that have proven themselves across industries. Instead of reinventing the wheel, we adapt proven patterns to your specific situation.
Phase 1: Model Analysis
We systematically analyze your existing business model — what works, what’s under pressure, and where untapped potential lies.
- Detailed mapping of all model components: value creation, revenue, costs, channels, customer segments
- Identification of strengths that can be transferred to the new model
- Analysis of weaknesses and external threats
- Benchmarking against innovative competitors and cross-industry pioneers
Phase 2: Pattern Identification
We identify the innovation patterns that fit your company, industry, and strengths.
- Screening of relevant innovation patterns (Platform, Subscription, Freemium, Ecosystem, As-a-Service, Razor-and-Blade, etc.)
- Evaluation: Which patterns fit your existing strengths?
- Selection of the 2 to 3 most promising patterns for detailed development
- Reference case analysis: Who has successfully implemented this pattern in a comparable situation?
Phase 3: Model Design and Validation
We design the new business model and validate the critical assumptions in the market.
- Detailed design of the new model: value proposition, revenue streams, cost structure, channels
- Identification of the riskiest assumptions
- Market validation: customer interviews, price tests, pilot trials
- Iterative adjustment based on validation results
Phase 4: Transformation Planning
We plan the step-by-step transformation from the existing to the new model — without jeopardizing the current business.
- Two-Speed approach: Exploit (optimize existing business) + Explore (build new model)
- Migration path with clear milestones and decision points
- Resource planning: What investments are needed, which existing resources can be leveraged?
- Risk management: What happens if the new model doesn’t perform as expected?
Learn more about strategic fundamentals in What Is a Business Strategy? and Before You Start Strategy Development.
What You Get
At the end of the project, you receive:
- Model Analysis — Documented assessment of your existing business model with strengths, weaknesses, and potential.
- Innovation Pattern Assessment — Analysis of suitable patterns with reference cases and fit evaluation.
- New Business Model — Detailed design of the transformed model with revenue streams and cost structure.
- Validation Results — Market data, customer feedback, and price tests for the new model.
- Transformation Plan — Step-by-step migration path with milestones, investment requirements, and risk assessment.
All deliverables belong to you. No vendor lock-in.
Innovation Patterns at a Glance
The platform model connects providers and consumers without delivering the service itself. Examples: Airbnb (accommodation), Uber (transport), Amazon Marketplace (retail). Relevant for established companies that already have a network of customers and suppliers that can be converted into a platform.
Instead of one-time sales, customers pay regularly for ongoing access or service. Examples: Adobe Creative Cloud (software), Hilti Fleet Management (tools), Rolls-Royce Power-by-the-Hour (engines). Particularly suitable when customers use the product regularly and value predictability.
A basic product is free; premium features or expanded usage cost money. Examples: Spotify, LinkedIn, Dropbox. Works when marginal costs per user are low and a clear upgrade path exists.
Customers don’t buy the product but pay for usage or outcomes. Examples: Kaeser Compressed-Air-as-a-Service, Signify Light-as-a-Service, Michelin tires-per-kilometer. Ideal for capital-intensive products where customers want the result, not the ownership.
The company becomes the core of an ecosystem of complementary providers. Examples: Apple (App Store + Hardware + Services), Salesforce (AppExchange), John Deere (Precision Agriculture). Relevant when the core product becomes more valuable through third-party add-ons.
What BMI Is Not
Digitalization converts existing processes into digital form — the business model remains fundamentally the same. BMI changes the business model itself: new revenue sources, new value propositions, new customer relationships. Digitalization can be a prerequisite for BMI but doesn’t replace it.
Product Development creates a new product within the existing business model. BMI changes the model itself — how revenue is generated, how value is created, how customer relationships work. A new product can be part of BMI, but not every new product is a business model innovation.
Strategic Design clarifies strategic direction: positioning, target group, bottleneck. BMI operates at a different level: How does the company generate value and revenue? Ideally, BMI follows a clear strategic direction — first the direction, then the model.
Frequently Asked Questions (FAQ)
What is the difference between Business Model Innovation and Business Design?
Business Design develops a business model — often from scratch. Business Model Innovation (BMI) systematically transforms an existing model. BMI uses proven innovation patterns like platform, subscription, or ecosystem to translate existing strengths into new value creation. BMI assumes a functioning business already exists.
When do I need Business Model Innovation?
When your existing business model is under pressure — from declining margins, new competitors, changing customer expectations, or technological change. Also when the model still works but you recognize it won’t be viable in 3 to 5 years.
How long does a BMI project take?
A typical BMI project takes 10 to 16 weeks. Analysis of the existing model and identification of innovation patterns take 3 to 4 weeks. Design and validation of the new model another 6 to 8 weeks. Transformation planning 2 to 4 weeks.
What does Business Model Innovation cost?
BMI projects typically range from mid to high four figures, depending on the complexity of the existing business model and the depth of transformation. You receive a binding fixed-price offer upfront.
Can we continue running the existing business during transformation?
Yes, that’s the standard approach. BMI works with the concept of “Two-Speed Transformation”: the existing business continues to run (Exploit) while the new model is built and validated in parallel (Explore). The transition happens gradually, not as a Big Bang.
What innovation patterns exist?
The most common are: Platform (intermediation instead of own delivery), Subscription (recurring instead of one-time revenue), Freemium (free entry, paid expansion), Ecosystem (value creation through partner network), Razor-and-Blade (affordable base product, high-margin consumables), and As-a-Service (usage instead of ownership).
Related Services
- Strategic Design — Bottleneck analysis, positioning, and specialization
- Business Design — Business model development and revenue models
- Product Development — From idea to market-ready product
