Chapter 4 shows how firms can use four different levers—technology, management practices, organizational forms, and co-creation—for business model innovation, and questions which combinations of levers are the most successful. The chapter starts by showing how Polaroid’s strong focus on developing technological skills was not accompanied by the development of new markets and distribution channels. The case demonstrates that mediocre technology with a superior business model can deliver more value than superior technology with a mediocre business model. Research on the firms Ericsson, Muji, Oticon, and Zara to see how they use the four levers to innovate their business model reveals that adjusting management practices is the most important in both renewal and replication. Examples of firms using different combinations of levers are TomTom’s technologically oriented renewal (combining new technologies with entrepreneurial management practices), Ericsson’s internally oriented renewal (through technology, agile management practices, and organizational forms), Procter & Gamble’s externally oriented renewal (through co-creation, new management practices, and organizational forms), and DSM’s integrated renewal (using all four levers).
