The process of business model renewal is what is termed ‘strategy innovation’. It is not simply about improvements to a product line or service offering incremental reductions in costs. Strategy innovation constitutes a fundamental innovation in the company's business model; a significant change in the way it makes money that opens up new sources of competitive advantage. This article explores how a company can go about improving its chances of successfully meeting this challenge of continually renewing its business model by creating a flow of profitable strategy innovations launched into the...

The process of business model renewal is what is termed ‘strategy innovation’. It is not simply about improvements to a product line or service offering incremental reductions in costs. Strategy innovation constitutes a fundamental innovation in the company's business model; a significant change in the way it makes money that opens up new sources of competitive advantage. This article explores how a company can go about improving its chances of successfully meeting this challenge of continually renewing its business model by creating a flow of profitable strategy innovations launched into the market at opportune times. The first step towards meeting this challenge is to understand how far and how fast a company's established strategy is decaying and therefore how urgently the launch of a strategy innovation is required.