Business Model > Technology

"Build a better mousetrap and the world will beat a path to your door." Ralph Emerson is credited with this quote, which sings the praises of technological innovation.

Unfortunately the statement does not hold true. Yes, it is useful to have a technological advantage over the second best mousetrap. However, without the right distribution channels, pricing model and customer strategy the world is likely to leave your superior mouse trap alone. Without the right marketing the world will never hear about your mouse trap and it may not realize it needs to kill mice. Without efficient production and supply chain management you will not make any money on the mousetraps you sell. Moreover, if your rivals are able to copy and improve on your mouse trap, the world may beat a path somewhere else instead.

These and more factors comprise a business model. A business model can be analyzed for a single product/service or for a company. Using the right framework and tools can help pinpoint where the potential for profitable improvement is greatest. A solid business model analysis is very useful as a preparation for both corporate strategy and innovation strategy.

Create's business model framework borrows from the research work of Alex Osterwalder and Henry Chesbrough. Create's framework analyzes the business model in terms of three components:

• Expertise
• Value
• Customer

Using our framework to analyze business models is useful for several applications. First, as a basis for corporate strategy, it breaks the business down into actionable areas. This helps in both communication and analysis. Second, for innovation strategy, it identifies focus areas for innovation investments. Third, for new products or services it helps identify potential challenges regarding the company's ability to achieve market success with the innovation.

Read more about our framework here and the link between business model analysis and innovation here.