Martin P Wilson

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Seizing the White Space, Business Model Innovation, Strategic PlanningSubtitled "Business Model innovation for Growth and Renewal" offers new thoughts on creating successful business strategy A clear and practical guide.

Business Model Innovation, Strategic Planning

There is much talk about business and operating models amongst senior managers and strategic or business planners but there is often little clarity about form or structure of such models. As a result they tend to focus on doing more of the same rather than genuinely innovating to provide the organisation a future more fitted to new and changing circumstances.

In Seizing the White Space Mark W Johnson defines a framework for business models and uses it to outline a practical process for planning business strategy. He argues that a new approach is needed as organisations fail to seize the opportunities beyond their core business because they use their current business model.

Johnson shows how companies have used a similar approach to identify new jobs that customers need doing and design profitable products and services that do what is required by such clients.

Part One – A New Model for Growth and Renewal

Chapter 1 introduces the idea of “White Space” in a business context and uses it as a basis for business model innovation. The second chapter then introduces Johnson’s Four-Box Business Model Framework and the components interact to form an overall model needed to achieve the new strategy from a needs driven basis rather than more traditional existing-capability based approaches.

The four boxes of Johnson's business model framework are:

  • Customer Value Proposition: the offering that helps customers serve an important purpose at a given price
  • Key Resources: people, technology, brand etc required to deliver the proposition
  • Key Processes: the means by which the proposition can be reliably delivered in a scalable way
  • Profit Formula: economic blueprint that defines how the assets, fixed costs, margins and velocity will work together to give value to the organisation.

It is stressed that the resources and process are those needed by the new model and will often not match those of the existing business. The profit formula shows how everything works together and will provide an effective and profitable opportunity. This is acknowledged as a major challenge and is discussed throughout with a particular consideration in the closing chapter.

Part Two – When New Business Models are Needed

Through the use of case studies Seizing the White Space illustrates the three principal types of white space and how they can be exploited. It identifies:

  • White Space Within: Transforming Existing Markets
  • White Space Beyond: Creating New Markets
  • White Space Between: Dealing with Industry Discontinuity (or filling gaps in the market)

It then relates these to the Four-Box Business Model Framework and uses them to the next part of the book to show how a repeatable process can work through the issues and challenges associated with each type of white space.

Part Three – Business Model Innovation as a Repeatable Process

The last three chapters explain how a new business model can be designed using the four-box framework and how it can then be implemented. It recognises and addresses the inevitable challenges that always accompany changes especially when it is as radical as in many of the case studies. In particular Seizing the White Space show how it is all too easy for new strategy to be severely undermined when the incumbent management try to force it to live within existing business models.

A Valuable and Practical Framework for Strategic and Business Planning in a Complex World

In Seizing the White Space Mark W Johnson has produced a clear and straightforward case for a new approach to strategic planning and entering new markets. Although the many example case studies are from the business world there is a good case for applying the same techniques in the public or third sector especially at a time when they need to innovate to cope with reduced budgets.

Seizing the White Space, Business Model Innovation for Growth and Renewal (2010, ISBN: 978-1-4221-2481-9) by Mark W Johnson is published in hardback by Harvard Business Press at $29.95.

Mark W Johnson is Chairman of Innosight, an international strategic innovation consulting company with major global clients.

 

 

 

First appeared on Suite101



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