In increasingly complex and competitive markets, innovation can no longer be limited to product upgrades or incremental improvements.
While new features and technologies matter, long-term competitiveness depends on something deeper: the ability to rethink how value is created, delivered and captured.
Business model innovation enables organisations to redesign the logic of their operations. It shifts the focus from “what we sell” to “how we create and sustain value.” Broadly speaking, this transformation follows three distinct paths.
Industry Model Innovation
Reshaping the Value Chain
Industry model innovation occurs when a company redefines the structure of an existing sector or enters a new one altogether.
Instead of competing within established boundaries, organisations reshape the value chain itself.
This may involve:
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Entering adjacent or entirely new industries
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Redefining traditional sector roles
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Leveraging proprietary assets or digital capabilities
A well-known example is Airbnb. Rather than building hotels, the company unlocked underutilised residential properties and repositioned them as hospitality assets. By doing so, it challenged the traditional hotel model and created a new market category within the travel industry.
This type of innovation often thrives in periods of technological change or regulatory evolution. Digital platforms, data-driven services and sustainability transitions have opened significant opportunities for companies willing to rethink industry structures.
Revenue Model Innovation
Rethinking How Value Is Captured
Revenue model innovation focuses not on what is offered, but on how revenue is generated. It involves redesigning pricing structures, payment logic or service configurations to align more closely with customer needs.
This may include:
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Subscription-based models
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Leasing instead of selling
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Performance-based pricing
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Bundled service ecosystems
HILTI provides a strong example. Instead of selling construction equipment outright, the company shifted to leasing tools as part of an integrated service model. Customers gain access without large upfront investments, while HILTI secures predictable, recurring revenue and long-term relationships.
This shift reflects a broader trend in global markets. According to OECD and European Commission analyses, servitisation and subscription models are increasingly adopted across manufacturing and technology sectors as companies move from ownership-based to access-based value propositions.
Revenue innovation strengthens resilience. It stabilises cash flow, deepens customer engagement and often increases lifetime value.
Enterprise Model Innovation
Redefining Organisational Roles
Enterprise model innovation goes further by redefining the company’s position within the value network. It challenges traditional boundaries and redistributes responsibilities across partners, suppliers and customers.
This may involve:
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Expanding into new operational functions
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Integrating vertically or horizontally
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Building collaborative ecosystems
For example, a paper mill that expands its activities to include both the delivery of recycled paper and the collection of used paper for recycling effectively integrates logistics into its operations. By doing so, it gains greater control over supply chains, enhances sustainability outcomes and strengthens competitive positioning.
In an era defined by interconnected ecosystems, enterprise model innovation enables organisations to create shared value across networks rather than operating in isolation.
From Strategic Insight to Structured Innovation
Business model innovation is not accidental. It requires structured analysis, experimentation and coordinated implementation.
Organisations must assess their industry positioning, revenue logic and operational structure with clarity and strategic intent.
Whether entering new markets, redesigning revenue streams or redefining roles within the value chain, companies that innovate their business models build stronger foundations for sustainable growth.
At JOIST, our Innovation Management service supports organisations in systematically identifying opportunities, designing viable business model transformations and implementing innovation strategies that deliver measurable impact. Through structured methodologies and ecosystem-driven collaboration, we help businesses move from ideas to scalable value creation.