Amazon – whose offerings evolved from online book retailer to Hollywood studio – maintained its success and growth to become a global giant, not by merely improving on what it initially did, but by dominating every digital business area imaginable. Johnson shows companies how they can emulate this dynamism, enshrining permanent revolution as their status quo.
In “Reinvent Your Business Model,” Johnson outlines the four business models that enable digital transformation:
- E-commerce: Selling products online
- Digital platforms: Digitally connecting customers with services
- Models that turn data into assets: Providing free services in exchange for data, to be sold for targeted marketing
- Automation-enabled services: Replacing human labor with software
Many companies have built their success on one of these models, but Amazon is unique in having diversified into nearly all of them. In doing so, the powerhouse minimized its own risks and vulnerability to disruption. Amazon’s different business models allow it to innovate for the future while extracting value in the present, says Johnson, who also cites Microsoft, General Electric and Netflix as prime examples of continuous business model reinvention.
Remember: the core products or services that make you successful today may not save you from disruption tomorrow. In his speaking and writing, Johnson emphasizes the need to institutionalize perpetual motion in a company’s approach to business models; the alternative is organizational demise.
For your summer reading list, grab a copy of “Reinvent Your Business Model,” now available in hardback and e-book.