The need to reinvent the business model seems intuitive, but where is the evidence that it is bearing fruit?
In the 28th edition of PwC’s Global CEO Survey, CEOs of approximately 4,700 companies were asked to describe their business model reinvention efforts in five categories: developing innovative products and services, implementing new pricing models, collaborating with other organizations, targeting new customer segments, and defining new routes to market.
The research revealed that companies that engaged in more reinvention also recorded higher profit margins, after adjusting for industry, geography, company size, and other factors. This refutes the idea that business model reinvention is primarily aimed at struggling companies. Quite the opposite. Companies that actively pursue reinvention tend to be more profitable than their competitors.