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New Paths to Customer Value

Disruptive Business Models in the Digital Vortex

By Michael R. Wade, Jeff Loucks, James Macaulay and Andy Noronha

16 pages

November 2015

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Disruptive Business Models – Providing Customer Value

To understand the workings of digital disruption, the DBT Center examined the business models of more than a hundred top digital disruptors. Whatever their differences, all of them create at least one of three essential types of value for customers: cost value, experience value, and platform value.

Digital disruptors use these customer-value focused business models to undercut the price, improve the customers’ experience, or use platforms to expand their reach exponentially. Each of these three categories of value in turn supports five predominant business models, which are detailed in the report. The emphasis is on the customer – exploring the benefits to them – rather than the gains flowing to the innovator, as this notion of new customer value creation is the unifying trait of all disruptive business models. While the report gives examples for each of the 15 business models, it is worth noting that almost none of the disruptors mentioned employ just one of the business models presented; most are proficient at combinatorial disruption that undercuts incumbents in multiple ways.

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