How to Describe and Improve your Business Model Openinnovation, Dublin, 24 Oct 2007 ©  Arvetica, September  2007
photos are from flickr under a « creative commons » license - authors are referenced in the comment section
IBM Global CEO Survey “ Business model innovation matters” and it is a top priority of CEOs
How Do We Describe Business Models Today?
Going to War without a Map…  Karl von Clausewitz (~1800)
Insufficiently Well Here CEOs 10° Managers 60° Here Staff 360° Ok
The Result
Could it Be Different?
It Exists in Business Process Modeling
A Management Toolbox for Business Model Design and Innovation
A Template to Describe Business Models 42’941 downloads
Describe a Business Model: 9 Building Blocks  CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIE...
Example: Bizner Bank CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMEN...
Xerox 914 Business Model CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SE...
Multis Example REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS total remanufacturi...
The Process
find a way to play poker to unlock these models Prof Henry Chesbrough, Berkeley “ ”
5 Steps to Business Model Design & Renewal <ul><li>describe existing business model </li></ul><ul><li>assess strengths and...
Visualize
 
Visualizing
Visualizing Amazon.com
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra ...
Assess, Design & Renew
good ideas are widely distributed, nobody has a monopoly on innovation Prof Henry Chesbrough, Berkeley “ ”
Assessing Amazon.com <ul><li>where are some of Amazon.com‘s highest  costs  located? </li></ul><ul><li>what are some of Am...
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra ...
Leveraging IT at Amazon.com
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra ...
Changing the Business Model: Examples
Building on Existing Customer Relationships: Walmart Clinics CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIEN...
Changing the Game: Cirque de Soleil CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENT...
Demand-Creating Alliances: Intel Processor Platform CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENT...
Planning & Implemention
Introducing a Family Office Service through a Partnership CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT S...
Project Roadmap OFFER CLIENT RELATIONSHIPS CLIENT SEGMENT ACTIVITIES PARTNER REVNUE STREAMS ACQUISITION CHANNELS family of...
the only thing that’s not designed is nature Dave Kelly, IDEO  “ ”
business people don’t just need to understand designers better; they need to  become  designers Roger Martin, Dean Rotman ...
Thank You
www.arvetica.com business-model-design.blogspot.com
Alexander Osterwalder <ul><li>Before joining Arvetica Alex founded Business Model Design, a consulting boutique specialize...
Waster Water Treatment Example
offer customer segment revenue stream distribution channel waste water treatment system Canadian mining sites one time sal...
sell waste water treatment system Canadian mining sites one time sales fee sales force total waste water treatment managem...
sell waste water treatment system Canadian mining sites one time sales fee sales force core activities core capabilities c...
build treatment systems water treatment knowledge production costs suppliers follow-up total waste water treatment managem...
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Describe and Improve your Business Model

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Here the slides for the talk I am giving at an event organized by Enterprise Ireland. I am quite honored to speak together with Prof Henry Chesbrough, author of Open Business Models... He is opening the conference with his talk, while I am concluding.

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  • http://www.flickr.com/photos/wrote/1496412666/ creative commons attribution license Mathias Klang
  • Describe and Improve your Business Model

    1. 1. How to Describe and Improve your Business Model Openinnovation, Dublin, 24 Oct 2007 © Arvetica, September 2007
    2. 2. photos are from flickr under a « creative commons » license - authors are referenced in the comment section
    3. 3. IBM Global CEO Survey “ Business model innovation matters” and it is a top priority of CEOs
    4. 4. How Do We Describe Business Models Today?
    5. 5. Going to War without a Map… Karl von Clausewitz (~1800)
    6. 6. Insufficiently Well Here CEOs 10° Managers 60° Here Staff 360° Ok
    7. 7. The Result
    8. 8. Could it Be Different?
    9. 9. It Exists in Business Process Modeling
    10. 10. A Management Toolbox for Business Model Design and Innovation
    11. 11. A Template to Describe Business Models 42’941 downloads
    12. 12. Describe a Business Model: 9 Building Blocks CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE
    13. 13. Example: Bizner Bank CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS entrepreneurs automatized relationship BizBallance (integrated banking and accounting) monthly fee Reeleezee IT infra mgmt account mgmt, transactions, etc. IT infrastructure, marketing, partnership costs DISTRIBUTION CHANNELS Web KEY ISSUES TO SOLVE IT, accounting, banking
    14. 14. Xerox 914 Business Model CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE large companies transactional sales team 1 time sales fee photocopiers R&D manufacturing regular large companies lease high-end photocopiers sales teams lease & 4ct per copy (2k+) financing & billing
    15. 15. Multis Example REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS total remanufacturing solutions of high end IT platforms manufacturing long term deep integration brand manufacturers customers base manufacturing IT brand manufacturers sales commission re-marketing inventory management systems knowledge manage secondary supply chain reverse logistics manufacturing inventory « sales » team brand manufacturers of high end IT platforms flat fee
    16. 16. The Process
    17. 17. find a way to play poker to unlock these models Prof Henry Chesbrough, Berkeley “ ”
    18. 18. 5 Steps to Business Model Design & Renewal <ul><li>describe existing business model </li></ul><ul><li>assess strengths and weaknesses </li></ul><ul><li>brainstorm on improvements & opportunities </li></ul><ul><li>turn new model into a project roadmap </li></ul>1 2 4 3 VISUALIZE ASSESS RENEW PLAN 5 IMPLEMENT <ul><li>implement project roadmap </li></ul>
    19. 19. Visualize
    20. 21. Visualizing
    21. 22. Visualizing Amazon.com
    22. 23. REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon.com warehousing & distribution distribution content management product selection product search marketing affiliates
    23. 24. Assess, Design & Renew
    24. 25. good ideas are widely distributed, nobody has a monopoly on innovation Prof Henry Chesbrough, Berkeley “ ”
    25. 26. Assessing Amazon.com <ul><li>where are some of Amazon.com‘s highest costs located? </li></ul><ul><li>what are some of Amazon.com‘s core competencies ? </li></ul><ul><li>how could they leverage these competencies ? </li></ul><ul><li>how could they leverage investments ? </li></ul>
    26. 27. REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon.com warehousing & distribution distribution content management product selection product search marketing affiliates
    27. 28. Leveraging IT at Amazon.com
    28. 29. REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon S3 Amazon.com Internet API Web2.0 companies warehousing & distribution distribution content management product selection A9 product search data storage fees product search search engine revenues e-commerce sites Internet marketing affiliates
    29. 30. Changing the Business Model: Examples
    30. 31. Building on Existing Customer Relationships: Walmart Clinics CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE shoppers frequent relationship Walmart Clinics health services medical knowledge and staff
    31. 32. Changing the Game: Cirque de Soleil CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE theater & opera visiitors artistic circus without lions stage & manage spectacle & logistics create art & atmosphere higher ticket prices
    32. 33. Demand-Creating Alliances: Intel Processor Platform CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE end users speedy processors partners with ever “heavier” applications
    33. 34. Planning & Implemention
    34. 35. Introducing a Family Office Service through a Partnership CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE affluent clients (100k-1+mio) tight personal relationships branches & bankers local private banking mainly product revenues ultra high net worth individuals family office services revenue sharing agreement local branch of family office tight relationships with UHNWI PARTNER NETWORK PARTNER NETWORK independent multi-family office
    35. 36. Project Roadmap OFFER CLIENT RELATIONSHIPS CLIENT SEGMENT ACTIVITIES PARTNER REVNUE STREAMS ACQUISITION CHANNELS family office services UHNWI relationships UHNWI client trust, internal cooperation mutli-family office partner revenue sharing relationship managers & new office design collaboration process training program develop marketing material internal concept presentation generate prioritized prospect list work out client presentation establish acquisition learning process relationship manager collaboration process team set-up client reception area profit center set-up set-up CRM tool
    36. 37. the only thing that’s not designed is nature Dave Kelly, IDEO “ ”
    37. 38. business people don’t just need to understand designers better; they need to become designers Roger Martin, Dean Rotman School “ ”
    38. 39. Thank You
    39. 40. www.arvetica.com business-model-design.blogspot.com
    40. 41. Alexander Osterwalder <ul><li>Before joining Arvetica Alex founded Business Model Design, a consulting boutique specialized in business model innovation. Besides consulting the private sector he was also involved in building up a globally active NGO based in Thailand in the field of knowledge management, HIV/AIDS and malaria. Prior to consulting, Alex worked at the University of Lausanne, as an entrepreneur in the banking sector and as an online journalist for the major Swiss business magazine BILANZ. He holds a PhD and Masters degree of the HEC Business School of the University of Lausanne, Switzerland. Alex is an active member of the IMD based Open World Initiative (OWI). </li></ul>
    41. 42. Waster Water Treatment Example
    42. 43. offer customer segment revenue stream distribution channel waste water treatment system Canadian mining sites one time sales fee sales force
    43. 44. sell waste water treatment system Canadian mining sites one time sales fee sales force total waste water treatment management Canadian mining sites recurring service fee sales force
    44. 45. sell waste water treatment system Canadian mining sites one time sales fee sales force core activities core capabilities costs partner network client relationship build treatment systems water treatment knowledge production costs suppliers follow-up
    45. 46. build treatment systems water treatment knowledge production costs suppliers follow-up total waste water treatment management Canadian mining sites recurring service fee sales force dispatch repair teams error free systems development call center variable costs of repair services
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