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Xerox Corporation's early days in the copy
machine business with its Xerox Model 914 copier illustrate the importance
of the
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Business Model
 and innovative
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Revenue Model.
The Model 914 used the
relatively new electrophotography process, which is a dry process that avoids the use of
wet
chemicals. In seeking potential marketing partners, the company
repeatedly was turned down by the likes of Kodak, GE, and IBM, who had
concluded that there was no future in the technology as seen through the
lens of the then-prevalent business model. While the technology was
superior
to earlier copy methods, the cost of the machine was six to seven times more
expensive than alternative technologies. The model of
selling the equipment
below cost and making up the difference by large margins in the sale of
supplies was not viable because the cost of the supplies was about the same
as that of the alternatives, so there was little room to maneuver.
Xerox then decided to market the new product
itself and developed a
new business model to do so.
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Systemic Innovation:
7 Areas
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