How can retailers innovate their business model?

The July 2011 Special Issue of the Journal of Retailing features a paper co-authored by Ruud Frambach on innovations in retail business models.

23-08-2011 | 17:22

Apple, Best Buy, Ikea, Walmart and Zara. These are only a few examples of retailers who have been able to successfully use innovative business models. Increasingly, retailers as well as other organizations understand the importance and power of innovative business models for creating and sustaining competitive advantage.  A business model articulates how an organization creates value for its customers and appropriates value from its markets. For retailers, it entails making choices with respect to the way in which activities are organized (retail format), the type of activities that are executed, and the level of participation of actors involved in performing these activities. As markets are increasingly characterized by unrelenting change, escalating customer expectations and intense competition, a thorough understanding of the effectiveness of the firm’s business model is very important. In their paper, Sorescu, Frambach, Singh, Rangaswamy and Bridges discuss the components of a retail business model and how organizations can effectively innovate their business model to enhance value creation and appropriation beyond traditional methods.

Sorescu, Alina, Ruud T. Frambach, Jagdip Singh, Arvind Rangaswamy, and Cheryl H. Bridges (2011), “Innovations in Retail Business Models”, Journal of Retailing, 87S (1), S3-S16.