Visualizing Business Models and Value Propositions In Private Banking And Wealth Management

Slide 1: Visualizing Business Models and Value Propositions in Wealth Management Dr. Alexander Osterwalder - alex@arvetica.com April 2007

Slide 2: Objectives of this Workshop LEARN APPLY  Learn about 2 simple tools to  Learn by applying the tools to model, visualize and understand different wealth managers wealth managers (beyond traditional analysis)  value proposition visualization and comparison  business model visualization

Slide 3: Agenda 11:00 11:10 12:30 12:45 13:45 BREAK OUT S ES S ION I INTRO “COURS E” BREAK OUT S ES S ION II WRAP-UP warm-up CHAN NEL Awareness Evaluation Purchase After sales inform evaluate sell assist Stores evaluate Web assist inform G roups, Spread buzz be positive Lists, etc. Blogs praise admire ple nary pre s e ntatio n ple nary pre s e ntatio n g ro up wo rk ple nary g ro up wo rk take - o bje c tive s & vis ual bus ine s s c lie nt ac quis itio n vis ual value away ag e nda e xample s mo de l c hanne ls e xample s pro po s itio n g ro up g ro up g o ing be yo nd draw a bank’s g ro up draw the dis c us s io n pre s e ntatio n & the value c lie nt ac quis itio n pre s e ntatio n & value vis ual pro po s itio ns s trate g y dis c us s io n pro po s itio n c o mparis o n o f a bank E xa m ple s CHANNEL Awareness Evaluation Purchase After sales Stores inform evaluate sell assist Web assist evaluate inform Groups, Spread buzz be positive Lists, etc. Blogs praise admire

Slide 4: crafting value propositions

Slide 5: Working Definition Value Proposition  a customer value proposition gives an overall view of a company's bundle of products, services and client advice.  it is the sum of the total benefits a customer is promised to receive in return for a payment (or other value transfer)

Slide 6: Group Warm-up what are the 8 most important competitive attributes that characterize a bank’s wealth management value proposition? (e.g. price, investment performance, private equity access, …) attribute 1 e.g. performance attribute 2 e.g. price

Slide 7: 8 Attributes to Describe a Bank’s 1 WM Offer 2 1. most important attribute 2. second most important 3. … 3 4. … 4 - -

Slide 8: Break-out 1: Draw a Value Proposition (i) each group describes the value proposition of “their” bank by rating the 8 attributes we selected together . min 30 5 - high bank’s performance 3 - medium 1 - low 2 3 8 1 e e e e ut ut ut ut … ib ib ib ib ttr ttr ttr ttr a a a a [Kim & Mauborgne (2002) Charting Your Company's Future]

Slide 9: Break-out 1: Draw a Value Proposition (ii) describe the value proposition of each group’s bank by using the identified 8 attributes let’s go

Slide 10: Comparing Offers Visually Strategy Canvas Wealth Management CH banks' performance 5 4 Bank A 3 Bank B 2 Bank C 1 0 1 2 3 4 5 6 7 8 e e e e e e e e ut ut ut ut ut ut ut ut b b b b b b b b tri tri tri tri tri tri tri tri at at at at at at at at competitive attributes (factors of competition) [Kim & Mauborgne (2002) Charting Your Company's Future]

Slide 11: business models

Slide 12: 18% 1% 300% Strategy Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper, Text risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felis pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec Text diam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod. Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor. Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibus vulputate. Proin dignissim eros at augue. Text Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulum condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae purus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque. Development plan Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit  amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci. Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing  elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem. 12% Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat  fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac Words libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat.

Slide 13: Beyond the Value Proposition: Business Models INFRASTRUCTURE OFFER CUSTOMER PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMER CAPABILITIES PROPOSITION SEGMENTS ACTIVITY CLIENT ACQUISITION CONFIGURATION CHANNELS COST REVENUE FINANCE STRUCTURE STREAMS a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams [Osterwalder (2004) The Business Model Ontology]

Slide 14: crafting client acquisition channels

Slide 15: Client Acquisition Channels OFFER CUSTOMER VALUE CLIENT ACQUISITION CUSTOMER PROPOSITION CHANNELS SEGMENTS value proposition 1 channel 1 target customer 1 value proposition 2 channel 2 target customer 2 … … … describing how a wealth management bank acquires its clients

Slide 16: Break-out 2: A Bank’s Acquisition Channels each group draws the client acquisition channel strategy of a specific bank for each customer segment in. ’s go: 30 m let Example OFFER CUSTOMER Targeted Advertising VALUE Referrals Retail HNWI PROPOSITION Banking Partner Referrals by own Investment Bank UHNWI “Platinum Club” Referrals by Existing Clients

Slide 17: Wrap-Up  questions  take-away ?  thoughts  inputs  follow-ups  alex@arvetica.com  www.arvetica.com