HBR's 10 Must Reads for the Recession Collection (6 Books)

The Transformative Business Model

by Stelios Kavadias, Kostas Ladas, and Christoph Loch

WE USUALLY ASSOCIATE an industry’s transformation with the adoption of a new technology. But although new technologies are often major factors, they have never transformed an industry on their own. What does achieve such a tranformation is a business model that can link a new technology to an emerging market need.

MP3 technology is a classic case in point. Early MP3 devices represented an order-of-magnitude increase in capacity over magnetic tapes and CDs: Users could carry thousands of songs on a small device. But MP3 players revolutionized the audio devices market only after Apple coupled the iPod with iTunes in a new business model, swiftly moving music-recording ...