Innovation in the Age of Adaptability: Adapting to the world with business model innovation.

This article is the second in a series I am dedicating to innovation in the age of adaptability. Find the first article here.

IKEA is perhaps on of my most favorite companies. Why? Because when it comes to innovation, IKEA not only talk the talk, they also walk the walk. Since its inception as a company, IKEA has been one of the most human centric companies in the world, creating value for the customer and by the customer.

This video made by IKEA USA clearly shows the level of sophistication of IKEA's business model as well as how its customer is truly at the heart of it.

But even one of the most innovative companies in the world can be outrun by the fast changes in its business model environment.

Looking at IKEA's business model environment, we can see clearly that it is rapidly changing and constituting a possible and very real threat to the existing business model.

How exactly is the environment affecting IKEA's business model?

Desirability (the green space on the business model canvas):

The customer segment is no longer finding what was once a key component of IKEA's value proposition, appealing.

The next generation of Ikea Customers:

1. Live in cities
2. Don’t have cars ( IKEA store location outside the city is not ideal for the customers anymore)
3. Have thin wallets
4. Prefer to buy and own fewer things
5. Prefer finished product (no assembly)
6. Prefer to buy online (delivered to their homes)

We live in a world where More people want to buy and own fewer things. 

This rapid change in Desirability has heavily burdened the Viability of the business model (the grey area on the business model canvas).

Now let us take a look at the Feasibility ( the red area on the business model canvas)

We can easily notice that IKEA has managed to create a very strong infrastructure and organization wide capabilities. Adding to that, IKEA's brand and iconic designs are well known to many around the world.

A quick look at the business model of IKEA, we can notice the following:

1. IKEA's Desirability is increasingly becoming irrelevant to the new generations of customers.
2. IKEA's Viability is heavily being affected as result to that.
3. IKEA's Feasibility is really strong with potential to offer more.

A good question to ask would be: How might we leverage IKEA’s Key resources, activities and partners to create a more desirable and viable future business models? 

In other words, how can IKEA adapt to the fast changing business environment using innovation?