The Xerox Business Model

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that a great technology exploited via a mediocre business model.] Unless a suitable model can be found, these technologies will yield less value to the firm than they otherwise might e and if others, outside the firm, uncover a business model more suited for a given technology, they may realize far more value from it than the firm that originally discovered the technology. To begin at the beginning e what is a business model? In previous work with my colleague Richard Rosenbloom we have suggested that a business model fulfils the following functions: • Articulates the value proposition (i.e., the value created for users by an offering based on technology); • Identifies a market segment and specify the revenue generation mechanism (i.e., users…show more content…
This research examined in detail the activity history surrounding more than 35 technology projects throughout Xerox’s five research laboratories around the world. By design, I selected projects that were judged not worth pursuing internally within Xerox, and were either pushed outside the company, or allowed to leave if a researcher wanted to continue the project after Xerox terminated its support internally. I then followed the subsequent experience of each of these projects after their departure from Xerox. It eventually became clear that the many research projects that remained within Xerox’s R&D system (and proved to be quite valuable economically) differed from those that left Xerox in one important respect: the former fitted well with Xerox’s business model, while those that ‘went outside’ did not. Thus, to understand Xerox’s technology innovation successes and failures, one has to grapple with Xerox’s business…show more content…
CD unit sales are down substantially from just a few years ago, while alternative formats for music distribution like iTunes have grown more important. It is in times like these - when it is clear that the ‘old’ business model is no longer working - that business model experimentation becomes so important:, but it is not at all clear what the eventual ‘new’ business model will turn out to be. Only experimentation can help identify it and create the data needed to justify it. In Radiohead’s case, the experiment is widely considered to have been a success. The band’s website registered over 3 million visits during the first 60 days after the release while about 1/3 choose to pay nothing, the remaining 2/3 paid an average of £4. The net revenue to the band thus came in at around £2.67 pounds on average far more than the band’s share would have been under their normal business agreement. But here is where it gets interesting. ‘In Rainbows’ was then taken off the website, licensed to a publisher for sale in the US, UK and elsewhere and released through the regular commercial distribution channels. Even though it had been available for downloaded for over 60 days at low prices (even for free), the CD debuted at #1 in both the US and the UK, and sold over 1.7 million CDs through commercial channels in the subsequent

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