Business model innovation, which relatively few firms currently employ, can help your company leapfrog ahead of competitors. How? By regularly creating new sustainable advantages that translate into growing revenues and profit margins. Consultant Donald Mitchell says companies that focus on continuing business model innovation can quickly make mincemeat of competitors who are content to tinker and refine an existing one. One example: Jordan’s Furniture in Massachusetts turned its business model on its head when they decided to turn furniture shopping into entertainment. They began by staying open late on Saturday nights, and putting new and different types of entertainment into each store. To get the most benefit from this innovation, each suburban store offers a different theme and different entertainment. This lets Jordan’s appeal to more types of customers, in more ways, while encouraging customers to visit more of their stores. One new Jordan’s store offers a free Mardi Gras show using robotic techniques similar to Disneyland’s, and an in-store 3-D IMAX theater. This “shoppertainment” approach helped Jordan’s record the highest sales per square foot of any U.S. furniture retailer. This innovation is so valuable that it delivers another bonus: Jordan’s spends less as a percentage of sales to offer and advertise these attributes than most competing stores do for advertising alone.
Turning your Business Model Upside Down