Industry Evolution : Business Model Co-evolution Framework

Understanding the dynamics of industry evolution is of the utmost importance to business executives. These dynamics dictate the value creation and capture opportunities presented to individual businesses. As business model competition and complexity increase, the pace and dynamics of industry evolution are increasing as well. Although there are some common features of the evolution of industries in general, getting the details right prospectively can mean the difference between exceptional value creation and value destruction. Industry evolution is broadly a three phase process: 1) vertical integration, followed by 2) focused new entrants, followed by 3) recombinant business models. Example industries highlighted in the white paper include information technology, air transportation, and energy.

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