help with a MGT101 question

[amospaul]

Which of the following is an example of a business model innovation? A. A firm introducing a new model of its smartphone B. A firm introducing “ready to install” software C. A firm introducing a range of meals that can be cooked instantly D. A firm introducing its new range of accessories to go with its clothesline E. A firm introducing a new social networking website to connect with its customers

my test bank says D but D is product innovation. i asked chatgpt and it said : The correct answer for an example of a business model innovation is:

**C. A firm introducing a range of meals that can be cooked instantly**

Business model innovation involves changing the way a company creates, delivers, and captures value. In the case of option C, introducing a range of meals that can be cooked instantly represents a change in the business model by entering a new market or creating a new revenue stream related to food products. This goes beyond just introducing a new product or service and involves innovating the overall business model.

but why is C not process innovation? i dont understand the difference between process & business model innovation and my midterm is tomorrow so id really appreciate some help

 

[godisalivevii]

@amospaul Coming from someone who understands what innovation is, this is a dumb question.

Ask your classmates and professor or teacher's assistant before the test tomorrow if you care.

101 classes tend to be junk classes anyhow.

Read Innovation & Entrepreneurship by Peter Drucker to learn something real.

However, if you want my help today, I'll give you my opinion.

D is the correct answer because it is the only one that can be intuited as BUSINESS MODEL innovation.

A is just a new model of a phone; so it is probably just product innovation. The business model didn't change. Just an updated product.

B is the same as A, because you are just introducing a product. Nothing can change with the model itself because it is new.

C is the same as A with multiple versions of the same product; say a spaghetti and lasagna version of a microwave meal. Nothing changes with the business model because it's a new product or different SKUs of the same product.

E is the same as A with a website instead; essentially a digital version of a product. Nothing changes with the business model because it is a new product being introduced.

D is the answer because the business model CAN change. To understand this, think about the Brita Water Filter Pitchers. You sell the pitchers at cost or near cost because you know people will buy the filters; where you'll mark them up in price to create the profits in your business model. This is the classic razor / razorblades model you hear about with Gillette and Dollar Shave Club. In the D example, the clothesline is the product and the accessories are added to the clothesline to make it more useful to the customer. So an example might be that the company sells the clothesline at a discount or at break even so that people will buy the accessories to make the clothesline more useful. Maybe special clips that are made for the clothesline that make things simpler to hang and take off. Or a pulley system that works with this specific clothesline.

And if you don't understand why D is correct so far, take a step back. What was the business model before the accessories were created for the clothesline? Was the business model just selling the clothesline at a profit? Was it selling the clothesline and clips bundled? If so, doesn't adding the new accessories allow them to change the business model?

By the way, ChatGPT is a dumb box. You can't rely on it for everything.

Good luck with your test. And remember to think through things more. Because once you figure it out and it clicks you can easily remember it for a long time.

 

[amospaul]

@godisalivevii thank you so much you just helped me for tomorrows exam and later on

 

[godisalivevii]

@amospaul You're welcome