The firm uses
existing capabilities
they own, i.e.,value
chain activities and
underpinning
resources. This type
of business model
innovation is such
that existing
businesses remain
competitive.
The firm needs a
new model to create
and capture value.
Products with the
same business
model remain
competitive but the
capabilities are
entirely different.
Product/services
rooted in the new
business model
render products in
the old business
model as
non-competitive. The
capabilities in both
the business model
are same but
innovative business
model outpowers the
old businesses.
The core capabilities
of the old business
model is extremely
different and are
largely useless for
the new business
model. The rule of
the game is changed
both capability-wise
and market wise.
Many business
model innovations
can start up as
regular and can
quickly move to
capability building,
position building, or
revolutionary.