Systemic Innovation:

New Business Models

Best Business Practices  Apple Computers

New Business Models and Value Innovation

 

Vadim Kotelnikov personal logo Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation unlimited!

 

"Innovation distinguishes between a leader and a follower." ~ Steve Jobs, Founder of Apple

 

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Apple’s Innovative Business Models

Apple is widely considered as the #1 innovative company in the world. The company’s innovation strategy involves terrific new products and innovative business models.

Apple created many stylish innovative products that propelled the company to the top of its industry. But the shift was not only a matter of product innovation. Innovation lies also in Apple’s innovative business models – new ways to create, deliver, and capture value.

For instance, the iPod and iPhone would not have had nearly as much impact if they hadn't been matched with iTunes and the App Store respectively. Systemic innovation integration is at the heart of Apple’s success.

Apple works across traditional industry boundaries to create a successful innovation-friendly ecosystem. The company is in hardware, in software, in entertainment, and in logistics, and have mastered parts of all those industries.

The App Store, for instance, the world’s largest collection of mobile applications, offers hundreds of thousands ways to make iPhone even better. iTunes, innovative software with a powerful business model, shows that people would pay for music if the price is right and the interface is simple enough.

Apple’s innovative value proposition “The product as an experience” stimulated great ideas when company leaders were contemplating a new business model. For instance, Apple pioneered into a new business space and defined a workable business model for downloading music.

Another key driver of Apple’s financial success is growing adoption of Apple products for business use. Saving time and minimizing frustration are the essence of Apple’s brand promise. This value proposition converts PC and Blackberry users to the Apple brand. Apple's innovation strategy also involves great in-store service.

According to the Boston Consulting Group, a “combination of product innovation and business model innovation (BMI) put Apple at the center or a market approximately 30 times larger than its original market. It also helped expand the company’s share of the traditional computer market, as new customers became so attached to their iPods that they took another look at Apple computers.”