The core social media business operates on engagement metrics and advertising optimization—fast feedback loops with clear revenue attribution. Meanwhile, the AI division works on foundational models and research with uncertain commercial applications. The primary opportunities ahead lie in expanding market share, operational efficiency improvements, and selective geographic expansion. The key risks to monitor include competitive pressure from established peers and new entrants, macroeconomic headwinds, and regulatory developments in McDonald’s’s core markets. The biggest surprise in the data was not the success we saw in the top performers, but what we did not see in organizations across the board.
Companies must remain adaptable, continuously improving and adjusting their strategy based on real-world performance and feedback. Engaging stakeholders, including employees, partners, and customers throughout the process, is also crucial as their insights can significantly refine the expansion strategy. It’s about finding new avenues to increase the customer base, enhance product or service offerings, and enter new markets. A systematic approach to expansion not only streamlines the process but also improves the chances of success.
Key Principles Of Successful Business Model Transformation
The choice to pursue product, process, or business model innovation will largely depend on the company’s customer and industry. Executives running a product firm, for example, need to constantly think about how they plan to innovate their product. Embarking on business model transformation can seem daunting, yet a structured approach ensures progress and clarity. This roadmap breaks down the process into four actionable steps, each designed to help organizations navigate complexity and achieve lasting results.
It details how the company creates and delivers value to customers, and how it generates greater profit by earning more revenue than the costs incurred. Our research shows that top-performing companies don’t just chase novelty for its own sake. Instead, they configure business models that strike a deliberate balance between value creation and value capture. They tailor those models to fit their strategy, size, industry dynamics, and the maturity of the technologies they use. AI is fundamentally reshaping IT and software development services outsourcing by shifting engagements from labor-based models to intelligence-driven, outcome-focused partnerships.
From 2010 to 2020, many biopharma companies targeted development of biologics and novel modalities such as CAR-T, siRNA, and gene therapy, that targeted diseases affecting smaller populations. Since 2020, there has been a re-emergence of therapeutics targeting diseases affecting large populations with high unmet need, such as GLP-1s for obesity and monoclonal antibodies for Alzheimer’s. For example, there are more than 100 obesity compounds in the industry pipeline, and more than 35 have a GLP-1 component. Meta’s AI unit problems signal a broader shift coming to Big Tech innovation models. Companies will either need to spin off these units as independent entities with their own business models, or integrate them directly into revenue-generating divisions.
The more profit relative to costs that can be earned, the better the business model. Yet, this factor can only be evaluated precisely after implementing and testing the business model. From the quantitative perspective, several industry business models seem to be very good and attractive, as shown in this figure. The business model perspective provides a compiled answer to who the target audience is and how a company’s value proposition addresses their needs.
The result is a resilient, adaptive business model that meets evolving regulatory and market demands. Companies that resist change often lose market share to more adaptive competitors. Without business model innovation, organizations struggle to meet evolving customer expectations and miss out on emerging opportunities in fast-moving markets. The Lean Startup methodology, created by Eric Ries, emphasizes the importance of rapid prototyping, validated learning, and other iterative product and service development techniques.
Supporting Hubs
The pace of change in today’s business environment is relentless, with technology, markets, and regulations evolving faster than ever. For organizations aiming to remain relevant, business model transformation is no longer optional. Triggers include declining margins, changing customer needs, disruptive competitors, and new technologies. These shifts often reveal that the current business model is no longer aligned with the market. Recognizing these signs early helps companies respond strategically before performance is seriously impacted.
Lego’s adaptation to the digital age helped it to remain relevant and grow in a market where digital entertainment increasingly competes with physical toys. This might include considering geographical expansion, either internationally or into new regions within the current market, and analyzing various factors like regulatory, cultural, and economic conditions. Additionally, gathering feedback from environmental scanning provides valuable insights into risks and opportunities emerging outside the firm’s boundaries. This step identifies the components that need to change, given the risks and opportunities from outside. In this group, the first tool, Designing from Lists, is similar to a morphological box.
What makes Tesla’s journey even more remarkable is how the company nearly collapsed multiple times before 2018. Yet through strategic vision, relentless innovation, and a unique business model, Tesla didn’t just survive—it thrived. Today, Tesla stands as a testament to how the right business strategy, combined with commitment to sustainability and corporate social responsibility (CSR), can create lasting competitive advantages.
This broader impact makes it a strategic lever for growth beyond product-level improvements. Creating or adding a new business model to an existing one is a strategic approach that can help a company diversify its revenue streams, reach new customer segments, and enhance its resilience against market fluctuations. Business model innovation is the result of changing how a company creates, delivers, and captures value, through modifying or reinventing its business model. It can involve pricing, products, delivery, operations, or customer segments.The degree of innovativeness depends on the number of changes and disruptiveness to the existing business model.
This vertical integration enables the company to innovate faster and maintain technological leadership. Tesla’s mission is clear and ambitious to accelerate the world’s transition to sustainable energy. This isn’t just marketing speak; it’s the foundation of everything the company does, from manufacturing electric vehicles to developing energy storage solutions. Get business results quickly with Strategyzer’s proven processes, guided workflows and expert tools. Make strategy, growth, commercialization/GTM, and more practical for everyone in your team.
In rapidly changing markets, innovating the business model allows companies to stay competitive, unlock new revenue streams, reduce costs, and respond effectively to disruption. It enables sustainable growth beyond traditional product or service innovation. By investing in new products and services, OCP Group supports sustainable food systems while capturing emerging opportunities.
Business model transformation requires more than strategy or technology, it demands a cultural shift. Leadership buy-in is critical, as is empowering middle managers to drive change at every level. Discover actionable insights that will not only spark new ideas but also inspire you to evaluate and transform your business model for the future.
Analysts and investors should watch quarterly earnings releases, management commentary on comparable sales growth, margin trends, and capital allocation for signals of how the investment thesis is progressing. Apart from his marketing expertise, Aditya is also a spiritual speaker, often traveling internationally to share insights on spirituality. His unique blend of digital marketing proficiency and spiritual wisdom makes him a highly respected figure in both fields.
This approach is often applied when an internal capability becomes so significant and valuable that it offers potential benefits to external market players. For example, Apple frequently uses this strategy by regularly updating its hardware and software ecosystems to enhance user experience and integrate new services, thereby maintaining a competitive edge and customer loyalty. The central components are value creation, value delivery and proposition, and revenue capture. Business model innovation can thus be understood as a change in who is the target audience and how a company’s value proposition addresses its needs. The process often begins by identifying shifts in customer needs, market trends, or emerging technologies.
Use your insights and strategic thinking to understand how our clients can reinvent to stay ahead of change. Complexity can drain profits and stifle growth, but AI is the X factor, turning complexity into a strategic advantage that drives margin and market share. To capture its full value, companies must reinvent platforms and align AI, platform and business strategies. “Grant Thornton” is the brand name under which Grant Thornton LLP and Grant Thornton Advisors LLC and its subsidiary entities provide professional services. Grant Thornton LLP is a licensed independent Leadia Solutions OÜ CPA firm that provides attest services to its clients, and Grant Thornton Advisors LLC and its subsidiary entities provide tax and business consulting services to their clients. Grant Thornton Advisors LLC and its subsidiary entities are not licensed CPA firms.
- Databricks Marketplace grew from 1900 listings in Q2’24 to 2200+ by Nov 2024 with 230+ providers.
- For organizations considering this approach, start by mapping your current value network, identifying potential partners, and piloting a minimal viable platform.
- This converts adoption into recurring expansion and proves PAYG as a durable “land small, expand big” engine in enterprise IT.
- A systematic approach to expansion not only streamlines the process but also improves the chances of success.
A business model is a document or strategy which outlines how a business or organization delivers value to its customers. In its simplest form, a business model provides information about an organization’s target market, that market’s need, and the role that the business’s products or services will play in meeting those needs. As you’ve discovered, transforming your business model for 2026 isn’t just about reacting to change—it’s about leading with vision and confidence. By exploring actionable strategies like platform ecosystems, AI integration, and sustainable innovation, you’re already taking the first step toward future proofing your organization. If you’re ready to uncover new opportunities and turn these insights into measurable growth, let’s take the next step together. You can gain a clear, tailored perspective on your business’s potential by booking a Book a Free Opportunity Assessment.
Average deal value rose in 2025 even as volume declined, with growth driven by marketed assets and major players accessing a more globally diverse biotech ecosystem. Preclinical companies have collapsed in value from an average of about $500 million in 2021 to less than $50 million today, a reversal of the 2010–2020 trend that favored early-stage innovation. KFC’s secret to success is its ability to combine a unique product offering with an efficient, scalable business model that has sustained global growth for decades.
Tesla is pioneering a real-time insurance business model that dynamically adjusts premiums based on actual driving behavior. By using data from its vehicles, Tesla can assess driver risk more accurately and offer lower premiums to safe drivers. The primary purpose of a business model is to outline how a company creates, delivers, and captures value, providing a strategic framework for its operations and sustainability. The reusable pallet and packaging firm, Brambles, for example, has developed a share-and-reuse pallet pooling model, where pallets, crates, and containers are collected to be transferred between customers after use.
This defensive positioning explains why these units often feel “soul-crushing” to engineers. The innovation is constrained by the parent company’s need to preserve existing revenue streams. Google integrates AI research directly into product teams—Search, Cloud, YouTube—rather than isolating it in a separate division. This means AI innovations have immediate revenue pathways through existing business lines.
Originally, many companies adjusted their practices in order to put their games in this format, charging consumers a subscription fee or making them pay to unlock new levels. Some of those businesses, however, were able to innovate their business models to make gameplay free to the end-user by incorporating in-app advertising or selling merchandise such as T-shirts and plush toys. This practice, they found, was able to dramatically increase their reach, while also bringing in substantial funds from consumers. More recently, game developers have had to undergo rapid business model innovation in order to meet the evolving demands of customers—many of whom want to be able to play their games right on their smartphones. The video game industry, for example, has gone through a number of periods of business model innovation in recent years, Collier says, by envisioning new ways in which to make money from customers. By embedding a culture of iteration and learning, organizations ensure their business model transformation remains responsive to evolving challenges and opportunities.
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