Defining the Business Model Key partners Key processes Value Customer Customer proposition relationships segmentsWho are your key What are your key What is your value What relationships are Which customerpartners – consider processes – consider proposition? Why will you building with your segments are you goingstrategic alliances, co- product customers buy from customers – acquisition, to deal with – massopetitors, joint ventures development, revenue you? retention and cross- market, nicheand key suppliers. generation, order selling or upselling? market, segmented? fulfillment and after- sales support. Key resources Channels What are your key What are your channels resources – consider to market? Direct or physical, financial, intell indirect – stores and ectual, human and offices or web based? information based resources.Cost structure Revenue streams What are the major drivers for your cost structure? What scope for What are the revenue streams – sale of assets, usage economies of scope and scale? Can fixed costs be converted to fees, subscription fees, leasing or rental variable? fees, licensing, brokerage, advertising? Osterwalder, A. and Pugneur, Y. (2010) Business Model Generation, John Wiley & Sons.
PESTLE – what are the key drivers?PoliticalEconomicSocialTechnologicalLegalEnvironmental
So where and how do we start? New ventureFamily business – diversification New projectSocial need New DivisionPersonal experience Spin offResearch output Acquisition Idea Validate Implement New ventureResearch groups Due diligence LicenceIndividual academics Market research Joint venture withIndustry research Business plans industry Adapted from Shane and Venketaraman, 2000
Frameworks and Tools
Where are we now?
Examples of environmental influences Economic Capital Labour factors and Markets Market restructuring Competition Economic Financial Labour policy & Forecasting policy industrial relations Marketing Policy DemographicDemographics Lobbying forecasting ENTERPRISE Government Purchasing Policy Environmental sensing R&D policy Supplies Socio- cultural Technology Ecology Source: Johnson & Scholes,
The SWOT framework Strengths and Weaknesses Opportunities and Threats VRIO worksheet in handout Resources and capabilities Macro environment Value chain activities Value systems Organizational design PESTEL framework VRIO framework P5F framework Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?” Rarity: "Is control of the resource/capability in the hands of a relative few?” Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?” Organization: "Is the firm organized, ready, and able to exploit the resource/capability?"Sorensen 2012
A model for structural analysis Source: Johnson & Scholes,
Understanding your position in the value chainInfluences the business and operational modelSets the resources and capabilities requiredHelps identify potential customers, suppliers, partnersand competitorsHelps identify barriers to entry
Example: Value Chain for Mobile ServicesContent creation, packaging Advertising Content distribution and Devices, software and Transactions, user and publishing access provision applications experience, management Meta- Content Content content Distribution Airtime, creators packagers creators, develo Media Distribution networks eg User Ad Bandwidth, Delivery Operating Application Transactions management End users and and pers Advertisers planners servers/ networks ISPs, Mobile Purchase devices System s/w s/w developers publishers and and buyers pumps tools Operators credits packagers• Commission • Advertising deals • Licensing of • Developer • Integration deals creation of rich for revenue technology for relationships with with payment media content generation building server O/S vendors gateways, app• Localisation of through portal infrastructure • Agreements with exchanges international • Participation in Ad • Relationships with manufacturers for • Affiliate deals to content networks, interfac suppliers for pre-loading 3G generate traffic• Packaging content es infrastructure VAS apps and promotions for 3G mobile • Affiliate related services • Partnerships/ co- • End user relationships with • Develop/acquire promotion deals management, serv owners of mobile billing engines for with application ice customisation assets tracking, analytics S/W vendors
Example – Semiconductor industry value chain
Example – Pharma industry value chain Drug Sales, New Target Scale up & Lead Identification Development Manufacturing Technology Identification Launch & Optimisation & Supply Marketing & Distribution Pharmaceuticals Product-focused Biotech Technology-focused Biotech
New venture creation stages at the University - modelled on the value chain Generate IPAwareness Interest opportunities negotiation Validation Emerging venture Funding Commercialisation Start-up CfEL CfEL EnterpriseEnterprise Tuesday rs ETECH - MBA ETECH - MBA E - in - R Angel community Local lawyers, accountants et alEnterprise Champions IGNITE Investors IdeaSpace CE Licence Mentors VCs St Johns Innovation Centre Science Parks management CUE CUE Cambridge Angels teams CUTEC iTEAMS Angel communityMOTIDowning College CIKC AlumniPembroke College Students own ideas CE or outside Alumni PGDE is not open to students on other courses
Where we want to go..
Blue Ocean Strategy http://www.blueoceanstrategy.com/index.php Courtesy – S Ansari
Noah’s Arc School of Business
Porter’s Generic Strategies
Market attractiveness – company strengths Strengths and capabilities Long Term Market Attractiveness After - Johnson & Scholes,
Ansoff Matrix as a strategic tool New Plastic Logic Detail in Handout Customers Markets/ ARM Existing Existing New Products/Services Technologies Ansoff
Boston Consulting Group H Market growth rate ? AVR L Market share