Business Innovation

Business model

The logic through which a firm creates, delivers, and captures value.

Business model innovation

The redesign of one or more elements of a business model to create new value or competitive advantage.

Firm

An organization that coordinates resources to produce goods or services and generate value.

Theory of the firm

The set of economic and managerial theories explaining why firms exist, how they operate, and how they create value.

Value creation

The process of increasing the usefulness or worth of products or services for customers.

Value delivery

The activities through which a company provides its value proposition to customers.

Value capture

The process through which a company earns profits from the value it creates.

Value proposition

The bundle of benefits offered to satisfy customer needs better than competitors.

Customer segment

A distinct group of customers with similar needs, behaviors, or characteristics.

Revenue model

The mechanism through which a business generates income.

Cost structure

The composition of all costs incurred to operate a business model.

Key resources

The assets required to create and deliver value.

Key activities

The most important actions a company performs to operate successfully.

Key partners

External organizations that help the firm create and deliver value.

Distribution channels

The means through which products or services reach customers.

Customer relationships

The ways a company acquires, retains, and grows customers.

Competitive advantage

A condition allowing a firm to outperform competitors through superior value or lower costs.

Sustainable competitive advantage

An advantage that competitors cannot easily imitate or replace.

Resource

Based View (RBV)

VRIO framework

Framework evaluating whether resources are Valuable, Rare, Inimitable, and Organized.

Core competence

A distinctive organizational capability that provides competitive advantage.

Dynamic capabilities

The firm's ability to integrate, build, and reconfigure resources in changing environments.

Transaction Cost Economics

Theory explaining firms as mechanisms to reduce market transaction costs.

Transaction costs

Costs associated with searching, negotiating, monitoring, and enforcing exchanges.

Vertical integration

Ownership of multiple stages of the value chain.

Horizontal integration

Expansion through acquisition or merger with competitors operating at the same stage.

Economies of scale

Cost advantages obtained through increased production volume.

Economies of scope

Cost advantages from producing multiple related products.

Specialization

Concentrating on specific activities to improve efficiency.

Coordination

Organizing resources and activities to achieve common objectives.

Agency theory

Theory examining conflicts between owners (principals) and managers (agents).

Principal

agent problem

Information asymmetry

Situation where one party possesses more information than another.

Corporate governance

Systems that direct and control organizations.

Stakeholder

Any individual or group affected by or affecting a firm's activities.

Shareholder

Owner of equity in a company.

Stakeholder theory

Theory arguing firms should create value for all stakeholders, not only shareholders.

Innovation

Successful implementation of new ideas that generate value.

Invention

Creation of a new idea or technology without necessarily creating market value.

Technological innovation

Innovation driven by advances in technology.

Business innovation

Innovation involving processes, models, or organizational practices.

Incremental innovation

Small improvements to existing products or processes.

Radical innovation

Major breakthroughs that significantly change products, industries, or markets.

Disruptive innovation

Innovation that begins in overlooked markets and eventually displaces established competitors.

Sustaining innovation

Innovation improving existing products for current customers.

Open innovation

Innovation model where firms use both internal and external ideas.

Closed innovation

Innovation relying primarily on internal R&D.

Exploration

Activities focused on experimentation and discovering new opportunities.

Exploitation

Activities focused on refining and improving existing capabilities.

Ambidexterity

Organizational ability to balance exploration and exploitation.

Innovation ecosystem

Network of interconnected organizations contributing to innovation.

Diffusion of innovation

Process through which innovations spread among users.

Technology adoption lifecycle

Model describing how different customer groups adopt innovations over time.

Early adopters

Customers who adopt innovations before the majority.

Crossing the chasm

Transition from early adopters to the early majority.

Digital transformation

Organizational transformation enabled by digital technologies.

Digitalization

Use of digital technologies to improve existing processes.

Digitization

Conversion of analog information into digital form.

Digital strategy

Strategy integrating digital technologies into business objectives.

Digital business model

Business model relying significantly on digital technologies.

Platform business model

Business model facilitating interactions between multiple user groups.

Pipeline business model

Traditional linear model producing and selling products directly.

Multi

sided platform

Network effects

Increase in value as more users join a platform.

Direct network effects

Additional users directly increase value for users of the same group.

Indirect network effects

Growth in one user group increases value for another group.

Critical mass

Minimum number of users required for network effects to become self

Chicken

and

Platform governance

Rules determining participation and interactions on a platform.

Platform owner

Organization controlling platform infrastructure and governance.

Complementors

External firms creating products or services that enhance platform value.

Ecosystem

Community of organizations co

Winner

takes

Data

driven business

Big Data

Extremely large datasets analyzed to generate insights.

Analytics

Techniques used to extract knowledge from data.

Artificial Intelligence (AI)

Systems performing tasks requiring human intelligence.

Machine learning

AI technique enabling systems to learn from data.

Algorithm

Set of rules or procedures for solving problems or making decisions.

Personalization

Tailoring products or experiences to individual users.

Recommendation system

Algorithm suggesting relevant products or content.

Customer experience (CX)

Overall perception formed through interactions with a company.

Customer journey

Sequence of interactions between customer and organization.

Touchpoint

Any interaction between customer and company.

Omnichannel strategy

Integrated customer experience across all channels.

Customer centricity

Organizational focus on customer needs and experiences.

Digital channels

Online media used to interact with customers.

Owned media

Communication channels controlled by the company.

Earned media

Exposure gained through customers or third parties.

Paid media

Advertising purchased by the company.

SEO

Search Engine Optimization aimed at improving organic search visibility.

SEM

Search Engine Marketing using paid search advertising.

Content marketing

Creating valuable content to attract customers.

Social media marketing

Marketing through social networking platforms.

Engagement

Degree of customer interaction with a brand.

Conversion

Desired customer action such as purchase or registration.

Conversion rate

Percentage of users completing a desired action.

Customer acquisition

Process of gaining new customers.

Customer retention

Ability to keep existing customers over time.

Customer lifetime value (CLV)

Total expected profit generated by a customer throughout the relationship.