The document discusses potential business model innovations that could impact a business and its customers. It provides a matrix listing different business models and the benefits they provide to businesses and customers. Some examples included are freemium models, early payment discounts, and pay online options. The document asks the reader to consider how a competitor implementing these models could affect their business. It prompts selecting three models and reflecting on their impacts and whether elements could be adopted.

1. Improvements to a business model may benefit the business directly (through improved cash
flow and payment schedules) and indirectly (through improved customer relationships or sales
volumes).
In this exercise, you will consider the potential impacts of some financial business model
innovations. You will imagine a new competitor that has implemented some of these business
model innovations, which have a dramatic impact on your business’s market and context. You
will then reflect on whether you can implement any of these changes in your own business to
improve your market position and increase growth.
The matrix on the next page shows a range of potential business model changes, highlighting
their benefits for both the business and its customers. (You should be familiar with some of the
models from earlier in the course, and in your business practice.)
Using the matrix:
 Consider each new model, and reflect on how a fictional competitor using this model
could affect your business. (Think about your pricing strategy and Customer Buying
Process as you do this.)
 Select three models that you think would have a significant impact on your business.
 Answer the reflection questions that follow the matrix.
v
VISUALIZING BUSINESS
MODEL INNOVATION

2. BENEFITS FOR THE BUSINESS BENEFITS FOR CUSTOMERS
It receives
payment
earlier in
the
process
It receives
payment
more
quickly
It receives
recurring
income
It receives
higher
overall
income
It is likely
to receive
more
business
They
spread
the cost
They get a
discount
They
receive
something
for free
They
buy
more
easily
SELECT
THREE
OPTIONS
Surge pricing
Raising prices when demand is
high.
X X X
Retainers
Charging a regular fee for
offering support services.
X X X X X
Early payment discounts
Incentivizing early payments.
X X X X
No win, no fee
Only charging when successful.
X X X
Bundling
Offering a discount for set
groups of products/services.
X X X X X
Freemium
Offering free access, but
charging a premium for
additional features or services.
X X X X X
Value-based pricing
Basing prices on the product or
service’s perceived value.
X X
XaaS pricing
Charging for regular access to a
resource or service.
X X X X X
Pay what you want
Price is set by the customer
based on satisfaction.
X X X
Pay online
Payment online at point of sale.
X X X X
Pay upfront
Payment at point of sale.
X X
Pay in installments
Repeated smaller payments.
X X X

3. Reflection questions:
1. Which business model innovations has your new fictional competitor implemented?
Freemium, Pay Online,
Early payment discounts.
2. What effects will this have on your customers and market? What is it specifically
about these innovations or changes that would be so relevant and transformative to
your sector/circumstances?
This is very effective, right decision at the right
moment is necessary to be sustained in the
competitive market.
3. The changes for the fictional business may not have been entirely realistic, and you
might not be able to fully recreate them. Are there any elements that you could
implement and explore in your own business?
I also like early payment discounts and value based pricing,
online payment for online materials.

4. Next steps
Would you consider any of these innovations for your business? If the innovations make you
stand out from your competition and give you an edge, you might want to consider adding them
to your plans for future growth. You could also discuss them with your team.
If you find something you would like to try, it is important to experiment with your innovation on a
smaller scale first to successfully manage risk (for example, you could try it out in a limited
region, or on certain customers).