business news in context, analysis with attitude

Wired has an excellent story about the importance of business model innovation, which is described as a cultural imperative at Amazon and defined as "reinventing its business model and finding new ways to create value, conduct business and get paid for it."

Over time, the story says, "the companies that fail to reinvent their business models to challenge outmoded assumptions about their businesses, renew their customer value propositions and change the competitive dynamics of their industries in their favor can quickly become vulnerable to commoditization, obsolescence or business failure."

There is a line that separates two kinds of companies, the story says. One kind of company tries to figure out "more efficient ways to operate in existing markets." But the other kind of company - and Amazon seems to be a prime example - companies look to reinvent themselves "to create entirely new markets, new opportunities and structural competitive advantages."

You can - and should - read the entire piece here.
KC's View:
I wonder if at some level we have to eliminate the notion of 'existing markets" from our vocabularies, since it suggests a kind of stagnation that doesn't exist anymore. In fact, almost all markets are evolving - some of them very quickly - and so at the very least business models have to evolve at the same rate, or faster. That's like the minimum one has to do in order to be in business … to really grow, companies have to, as the story says, "create entirely new markets, new opportunities and structural competitive advantages."