Clayton Christensen – Innovation Day 2
Ten Types of Innovation – Category 1
Innovation type 1: Business Model
Description of Type: How you make money
How do you innovate in this type: By fundamentally reconsidering how the company and its offerings are structured to obtain revenue.
Business example: DELL revolutionized the personal computer business model by collecting money before the consumer’s PC was even assembled and shipped (resulting in net positive working capital of seven to eight days)
Innovation type 2: Networks and Alliances
Description of Type: How you join forces with other companies for mutual benefit
How do you innovate in this type: No company can or should do everything by itself. Networks provide a way for companies to leverage each other’s offerings, customers and capabilities.
Business Example: Consumer goods company Sara Lee realzed that its core competencies were in consumer insight, brand management, marketing and distribution. Thus it divested itself of a majority of it manufacturing operations and formed alliances with manufacturing and supply chain partners.