Business model innovation is the process of developing new business models or changing existing ones in order to deliver better value to customers, achieve competitive advantage and increase profitability. Mark Johnson (2010) defined the concept in more detail as follows.
Source review Business model innovation defined – Johnson (2010: 20)
Business model innovation (BMI) refers to the creation or reinvention of a business. Though innovation is more often seen in the form of a new product or service offering, a business model innovation results in an entirely different type of company that competes not only on the value proposition of its offerings, but aligns its profit formula, resources, and processes to enhance that value proposition, capture new market segments, and alienate competitors.
He also observed that: ‘Business model innovation thrives in cultures of inquiry, environments in which new value propositions and ideas for new business models are met with interest and encouragement’ (ibid: 177).