A New Business Model: To Accelerate Growth, Manufacturers Must Innovate Beyond Their Products – Forbes

by | Aug 18, 2022 | Business

To mitigate this risk, manufacturers must put themselves in a better position to respond quickly to … [+] changing market conditions. This means building on their existing business models to consider how every element of their operations can be positioned to drive value for the company. Agility and flexibility — or “optionality” as Nyquist puts it — are the new pillars of success.

Renowned American entrepreneur Steve Blank describes a business model as how your company creates, delivers and captures value. And for decades, the manufacturing industry has defined that value through its ability to create, deliver and innovate products.

This will always be high on the list of any manufacturer’s core competencies — they are, after all, in the business of making things. But how can they accelerate growth? As the world and marketplace evolve, their products must also become just part of the story when it comes to the full value they can bring. In fact, rather than focusing only on features and functions, the firms that adopt a growth focus in the future will be the ones that broaden their view beyond their products to become truly business model centric instead.

Room for improvement

There is work to be done. According to the recent EY CEO Imperative study, only 30% of manufacturing leaders identify business model innovation as a top growth and transformation driver, well behind sectors such as technology (55%) and finance (38%). This, in turn, limits their ability to seize new opportunities in an ever more dynamic marketplace.

As Ernst & Young LLP Principal, Stephen Nyquist, puts it …

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