Business World

Why Do You Need A Model?

By Nabankur Gupta

'Seizing The White Space' lays out a credible framework to make business models work and presents a practical approach to implement business model innovation.

Strategy guru Mark W. Johnson’s new book Seizing The White Space not only lays out a credible framework to make business models work, but presents a practical approach to implement business model innovation.

The book is divided into three logical and smooth-flowing segments in which the first part addresses what Johnson calls the new model for growth and renewal. The strategy guru defines white space as the range of potential activities not defined or addressed by a company’s business model — opportunities outside its core and beyond its adjacencies that require a different business model to exploit.

He says many firms have not been able to develop and make good use of a business model due to their ignorance of what a business model is (and what it is not). They don’t even know the model they are operating under. Not only has Johnson covered well-documented cases such as the Apple iPod, he has also picked Indian examples such as the Nano from Tata Motors and its ability to occupy a ‘white space’ through an innovative business model. Johnson explains his four-box business model, which focuses on customer value proposition (CVP). It is an offering that helps customers solve a key problem effectively and in an affordable manner.

Johnson’s cases reinforces his theory. For instance, he talks about the advent of BlackBerry from RIM, which offered a new CVP to an entirely different “job to be done” with a relevant profit formula and revamping its key resources. He talks about Irish airline Ryanair’s ability to provide a low-cost value proposition that hinges on its choice of servicing secondary airports with standardised fleet. Another interesting case is of Whole Foods. This model could do wonders for corporates in India by bringing a new dimension to our strategic thinking.

In the second part, ‘When New Business Models Are Needed’, Johnson shows how firms are using innovative business models to seize the white space and achieve qualitative growth. This, he says, is fulfilled by meeting customer needs in their current markets; serving new customers and creating new markets; and responding to tectonic shifts in market demand, government policy and technologies. Through in-depth studies on Tata Nano and Hindustan Unilever’s Shakti Initiative, Johnson shows how they successfully exploited the white space.

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