RETHINKING INNOVATION AND VALUE CREATION IN THE ERA OF AI

by Dushyanthie William PhD Candidate Liverpool Hope University Business School

a buzzword; it’s a game-changer that’s revolutionising industries and business models. Creating new value propositions transforms how businesses operate, innovate, and compete.

Imagine a world where AI handles mundane tasks, freeing up human talent for more strategic roles. AI’s process automation, cognitive insights, and cognitive engagement significantly enhance operational efficiency, analytical capabilities, and customer interactions. This transformation is not just theoretical; it’s happening now. Netflix and Amazon, for example, use AI to refine customer segmentation, offering highly personalised recommendations that keep users coming back for more. In professional services firms and the manufacturing industry, AI is raising the bar by offering strategic advice through chatbots and enabling predictive maintenance by establishing outcomebased business models.

AI is also revolutionising customer relationships. Hilton uses cognitive computing to elevate guest services, while Sephora employs sentiment analysis to tailor engagement strategies. Companies are investing in multiskilling and gig workers to stay agile, with Siemens leveraging AI for advanced manufacturing processes. AI fosters coopetition, where competitors collaborate to form value networks, and with JPMorgan’s COIN platform for legal document review. Uber’s dynamic pricing strategy, powered by AI, optimises revenue and service availability, showcasing AI’s potential to transform business models.

AI redefines value co-creation by enhancing customer engagement through service robots and AI-powered chatbots, streamlining operations, and optimising supply chain management. It enables personalised interactions, immediate support, and the development of new products, services, and data monetisation. AI processes vast amounts of data to facilitate strategic decision-making and promotes organisational agility by predicting equipment failures and optimising supply chains.

While large companies are already reaping the benefits of AI, SMEs face challenges such as limited technological know-how, insufficient government support, and high costs.

The potential rewards of AI-driven business model innovation are immense. Successful AI implementation requires investment and addressing ethical considerations like data privacy and bias. Integrating AI into business models represents a strategic shift, necessitating a reevaluation of the principles governing the incorporation of AI technologies into value-offering mechanisms.

The journey may be challenging, but the rewards are well worth the effort.

AI redefines value co-creation by enhancing customer engagement through service robots and AI-powered chatbots, streamlining operations, and optimising supply chain management. It enables personalised interactions, immediate support, and the development of new products, services, and data monetisation.

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