Business model innovation


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Business model innovation

  1. 1. Key concepts inBusiness Model Innovation<br /><ul><li>What is Business Model Innovation?
  2. 2. What is a Business Model?
  3. 3. What are the key search approaches to come up with a Business Model Innovation?</li></ul>August 2010<br />
  4. 4. What Business Model Innovation is NOT – Remember the dot.coms?<br />Start-ups can easily overthrow corporate behemoths<br />Classic management / financials are not relevant<br />Substitute currencies e.g. „share of eyeballs“ count<br />Corporate executives need to operate like Venture Capitalists<br />Corporations are obsolete<br />In the Internet era, networks count and everyone is a free agent<br />Go ahead and destroy your business. If you don‘t, someone else will<br />2<br />
  5. 5. Whatis a Business Model?<br />A „canvas“ of several elements answeringkey questions:<br />Customer segmentsWho are our customers?<br />Value PropositionWhat are the convincing benefitsour product / service offers?<br />Customer RelationshipHow do we contact and interact with our customers?<br />Distribution Channels: How do we get our products / services to the customers?<br />Revenues: What is the level of payment, what type of pricing is best?<br />Cost: What are the main cost factors?<br />Strategic Partners: What are the strategic partners we need to produce our product / service?<br />Key Activities: What are the key value-adding steps we have to manage?<br />Key Resources: What are the key assets we have and are needed for serving the customers?<br />3<br />Source: Business Model Generation: A Handbook forVisionaries, Game Changers, andChallengersby A. Osterwalder and Y. Pigneur<br />
  6. 6. Example: Apple‘s Business Model in thehandhelddevicesmarket<br />4<br />Customer segments<br /><ul><li>Massmarket
  7. 7. Design-oriented</li></ul>Customer relationship<br /><ul><li>Brand loyalty
  8. 8. Switcingcosts</li></ul>Key activities<br /><ul><li>Hardware design
  9. 9. Supply Chain Management
  10. 10. Marketing
  11. 11. Platformdeve-lopment</li></ul>Strategic partners<br /><ul><li>Music labels
  12. 12. Content providers
  13. 13. Key suppliers (Foxconn,..)
  14. 14. Mobile operators (T-Mobile,..)</li></ul>Value proposition<br /><ul><li>Seamlessandeffortlessinte-grationofbuyingandmanagingdigital contentandsoftware
  15. 15. „Cool“ devices</li></ul>Distribution channels<br /><ul><li>Apple stores
  16. 16. Retail stores
  17. 17.
  18. 18. iTunes store</li></ul>Key resources<br /><ul><li>Apple brand
  19. 19. iTunes software
  20. 20. People</li></ul>Revenues<br /><ul><li>Hardware revenues
  21. 21. Share ofmusicdownloadsrev.
  22. 22. Share ofappdownloadsrev.
  23. 23. Share ofcontentrev.
  24. 24. Share of ad rev.</li></ul>Costs<br /><ul><li>People
  25. 25. Manufacturing
  26. 26. Marketing & Sales
  27. 27. iTunes storeoperation</li></li></ul><li>Business Model innovation: 5 approaches<br />5<br />Blue Ocean strategies<br />Identify customer segments with a specific value set; Target this market by adjusting the other pieces of the canvas accordingly<br />Unbundling<br />A business can consist of several sub-businesses, e.g. Customer Relationship / Product Innovation / Infrastructure business. Unbundle these into separate entities.<br />Long Tail<br />Business Model innovation<br />Focus on a large number of niche products with infrequent sales. Aggregate sales of niche items can be attractive. <br />Multi-sided platforms<br />Creating value by connecting different groups and facilitating interactions between them<br />FREE Business Models<br />Non-paying customers are financed by another customer segment; non-paying customers are lured into paid products<br />
  28. 28. About …<br />Frank<br />More than 15 years of experience in managing projects and innovation<br />Worked for medium-sized national consulting companies as well as for The Boston Consulting Group<br />Worked at C-level for an IT and a Professional Services company<br />Author of several books and articles<br />Currently working at<br />Contact<br />+49-(0)171-6866774<br /><br />6<br />