Last week New Jersey started enforcing a ban on direct sales by Tesla Motors of its path-breaking model S. Tesla’s direct sales have also run into hot water in a number of other states: Ohio lawmakers are debating a ban on Tesla’s direct sales and Texas, Arizona, and Virginia are also opposed. Proponents of a ban on direct sales claim that they are acting in the interest of customers. But is it the interests of customers they’re following or rather the bidding of the powerful car dealership lobby?
The Renaissance Innovator
Thoughts, examples and updates on the Renaissance Innovation Method
Posts from the “Theory” Category
Amazon.com is in the headlines again because it started Sunday package deliveries in several large cities. This offering follows the company’s recent strategic decision to offer same day delivery to most US addresses. As a part of this strategy, the company is drastically increasing the number of warehouses all around the US. As we discussed in our forthcoming book, and this recent post on the HBR bloggers network. Amazon is in a class of its own when it comes to thinking about its business model. We are all accustomed to new offerings from Amazon.com: in fact, since its inception in 1995, Amazon has fundamentally changed its business model several times. At its inception, Amazon’s operation was organized around a “sell all, carry few” business…
Why Large Companies Struggle With Business Model Innovation
Serguei Netessine
Posted on September 28, 2013
After a brief summer hiatus, we are b
ack and blogging! As we describe in the recent blog post on HBR Network, innovation success stories are all strikingly similar: a bright idea, supported by a zealot-innovator who sees it through. The windfall of goodies follows. But failures happen for all sorts of reasons, and they often occur even when the idea is sound.
Two weeks back, Tesla Motors, the company behind the Tesla Model S, arguably the most promising all-electric challenger to the century-long domination of fossil-fuel cars, announced an innovative switching station based infrastructure that would bring its flagship product one step closer to being the first all-electric no-compromises luxury sedan. We were delighted to hear of this latest move by Tesla. Almost four months back, on this blog, we called for Tesla to complement the path-breaking technology in the Model S sedan with an innovative business model to match (Tesla’s Model S: Technology Outruns the Business Model). The proposed battery-swap system will allow a driver to replace a depleted battery with a fully charged battery in less than 90 seconds — faster than filling up a tank of gas…
In a recent post on Harvard Business Review bloggers network, we discuss the extreme focus business model of Germany’s famed Mittlestand: Quick test: name one company that does one thing and does it very well. The companies that occupy the limelight are typically diversified giants that achieve growth through constant expansion into new markets and the introduction of additional product lines (just think P&G, GE, and Microsoft). But the truth is that the really successful companies are highly focused, achieving unprecedented efficiencies by designing a business model with a razor-thin focus and learning to do the one thing really well. Many of us academics still teach an old case about Shouldice Hospital, which only treats simple cases of hernias and nothing else but does it…
In a recent blog post on the Harvard Business Review bloggers network, we discuss the sustainability of the advantage that come from innovating the business model. With the Winter holiday shopping season, fashion apparel retailer Zara has been the focus of media attention — the New York Times recently profiled the innovative fast fashion business model pioneered by Zara, while Elizabeth Cline’s book on the costs of fast fashion has climbed up the sales charts. Despite this very recent popularity, the novel business model of Zara has gone virtually unnoticed for over 30 years, allowing Zara’s parent company, Inditex, to grow from zero to almost $20B in revenues. Why wasn’t it copied immediately? How can it be so sustainable and continue growing? The answer lies in a different type…
MIT Sloan Management Review just came out with the latest 2012 picks for the world’s most innovative companies. This is a great list which includes 50 very interesting companies (mostly young) in a number of industries. While I enjoyed reading about these innovative companies, I could not help but be once again disappointed with the exclusive focus on product and technology innovators on the list and the lack of Business Model Innovators. Why? I think first and foremost, it is very easy to “see” new products and technologies: when one sees a new iPhone or iPad it is quite easy to tell that this is a new product. On the other hand, new Business Models can be operated by companies for many years before…
Cardiac surgery is a sophisticated, dangerous and delicate procedure; but an Indian surgeon and his hospital group have successfully transformed it into a factory style mass operation, bringing high quality care to the many millions who could never before afford it. Dr. Devi Shetty’s Bangalore based flagship, 1,000-bed Narayana Hrudayalaya Hospital, charges $2,000, on average, for open-heart surgery, compared with hospitals in the U.S. that are paid between $20,000 and $100,000, depending on the complexity of the surgery. Narayana Hrudayalaya reports a 1.4% mortality rate within 30 days of coronary artery bypass graft surgery, one of the most common procedures, compared with an average of 1.9% in the U.S. in 2008, according to data gathered by the Chicago-based Society of Thoracic Surgeons. This despite the fact…
The Renaissance Innovator joins the INSEAD bloggers network!
Karan Girotra
Posted on January 22, 2012
From today, our blog, The Renaissance Innovator, is part of the official INSEAD bloggers network. So if you arrived here through the INSEAD blog, Welcome to our blog and read on for what this blog is about. For our loyal regular readers, nothing changes, you can read our blog posts exactly as you did before, and we’d also recommend checking out some of the other excellent posts on the INSEAD blog. I often open my industry engagements on innovation with a simple thought experiment for our participants — I ask them to think of the most innovative organizations and identify what exactly they did that made them so innovative. The answers we hear are very predictable– no matter if we pose this question to…
The world is full of problems– poverty, malnutrition, medical access, climate change, natural disasters, etc. It is also full of many tenacious do-gooders with solutions, and thankfully many generous souls who would like to financially support these do-gooders. Unfortunately, the “marketplace” that matches the do-gooders with solutions is what economists would call very inefficient, that is many matches that are in the interest of everyone involved are not made. GlobalGiving, GiveIndia and a new breed of startup donation platforms are attacking these inefficiencies with a new business model for charitable giving and forever changing the way people give. More interestingly, how can we apply some of the renaissance innovation techniques that we talk about on this blog to take giving to the next level? Read…
The Renaissance Innovator 