Johnson, M.W., Christensen, C.M., Kagerman, H. Reinventing Your Business Model. Harvard Business Review, December 2008: 50-59.
The article argues that radically new products usually need a new business models and that is why these game-changers rarely emerge from established businesses. As a result the authors suggest a three step process for companies to see past the limitations of their current business models and activities: 1) think not about new business models but about opportunities to satisfy real customer needs, 2) construct a blueprint on how your company is going to fulfill the need and profit, and 3) compare the blueprint with your existing model and analyze what kind of changes would be needed.
The article defines a business model to consist of: customer value proposition, profit formula, key resources, and key processes. The customer value proposition is further divided to target customer, job to be done, and offering. The model is very customer-centric and quite similar to Osterwalder’s business model canvas.
The article also identifies strategic circumstances that require business model changes. Interestingly the circumstances are all customer related. For example opportunities to serve larger or new customer segments or possibilities to become more customer oriented (to bring a job-to-be-done focus there where it does not yet exist).