New Business Models in the Digital Ecosystem
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New Business Models in the Digital Ecosystem

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New Business Models in the Digital Ecosystem New Business Models in the Digital Ecosystem Presentation Transcript

  • Irene C L Ng Professor of Marketing & Service Systems, WMG Director, International Institute of Product & Service Innovation Adjunct Professor, NUS ISS New Business Models in the Digital Ecosystem irene.ng@warwick.ac.uk @ireneclng http://uk.linkedin.com/in/ireneclng bit.ly/vcssblog www.warwick.ac.uk/go/sswmg www.ireneng.com
  • Copyright Irene Ng, 2012. All rights reserved. Value was exchange (what I got for what I gave) $$$ 15 January 2013
  • Copyright Irene Ng, 2012. All rights reserved. Value-in use We buy because of the service of the object, even if it was an emotional ‘service’ 15 January 2013
  • Copyright Irene Ng, 2012. All rights reserved. Value created is Contextual. Resources are therefore also Contextual. This camera is available so it is a resource in context This camera is not Things become more valuable in context because they enable resources for value creation Value is created in CONTEXT 15 January 2013
  • Copyright Irene Ng, 2012. All rights reserved. Two functionally the SAME cameras but not the same value for the user in context. Because one camera is less competent in context, one is a lesser service avatar (or is just simply not around!) COMPETENCY OF OFFERING IN CONTEXT IS KEY TO NEW MARKETS Why context is important 15 January 2013
  • Copyright Irene Ng, 2012. All rights reserved. Ownership/Possession was the only way to get the ‘service’ of an object • Previously, the only route to service/outcomes was through ownership e.g. music CDs • Firms have talked, promoted and sold on the basis of benefit and use of things but benefit (outcomes) and use is not aligned to revenues – we still only buy ownership and not outcomes • But outcomes/benefits come only in the context of use and experience • If firms found a way to serve contexts, ownership may not be the dominant biz model • Case study: Music 15 January 2013
  • WMG THE BUSINESS MODEL- traditional loosely coupled system and relationship with the market and customer 1/15/13 33 Value Creation (Experience) Value prop (Offering) Valuecapture (Revenuestreams) Customer Consumption space (in context) The Firm Design, create, deliver (channel) space Exchange space Supply Chain Marketing Manufacturing Strategy HRM, Finance Consumption culture Consumer research The market
  • WMG THE BUSINESS MODEL- digital economy 1/15/13 33 Value Creation (Experience) Value prop (Offering) Valuecapture (Revenuestreams) Customer Design, Create, deliver (channel) space Exchange space Tightly coupled service systems (Change one, change all) The market The Firm Consumption space (in context)
  • WMG THE BUSINESS MODEL- e.g. Music 1/15/13 33 Value Creation (Experience) Value prop (Offering) Valuecapture (Revenuestreams) EMI, Sony BMG Customer MUSIC ENJOYING MUSIC Money fr access e.g. spotify Money fr ownership e.g. CD Money fr eyeballs The Firm Design, Create, deliver (channel) space CHANGES CHANGES CHANGES The market The Firm
  • WMG Value Constellation and potential disruption 1/15/13 33 Value Creation (Experience) Value prop (Offering) Valuecapture (Revenuestreams) EMI, Sony BMG Customer MUSIC ENJOYING MUSIC Money fr access e.g. spotify Money fr ownership e.g. CD Money fr eyeballs The Firm Design, Create, deliver (channel) space CHANGES CHANGES CHANGES The market The Firm Value Creation (Experience) Value Creation (Experience) Connected Products
  • WMG THE BUSINESS MODEL to the Economic model 1/15/13 33 Value Creation (Experience) Value prop (Offering) Valuecapture (Revenuestreams) EMI, Sony BMG Customer MUSIC ENJOYING MUSIC Tightly coupled BUT non- linear or sequential Relationship with the customer changes Where market exchanges occur could also change The market The Firm Value Creation (Experience) Value Creation (Experience) Connected Products
  • WMG THE BUSINESS MODEL- implications on material products 1/15/13 33 Value Creation (Experience) Value prop (Offering) Customer The nature of the offering Experience in high variety of contexts Design, Create, deliver space CHANGES The Firm The Incomplete Product Completed in the 'high contextual variety' customer space by (A) digital interface (B) 3D printing
  • Serving Contexts (the kinetic) • Current market platforms - tablets and mobiles • More platforms for context-based markets now need to be created e.g. Internet-of-Things at home, in buildings • A revolution in the way we think about manufacturing for contexts - modularity and boundaries • Fragmentation of the material from the information • boundary of customer resource, material resource, information resource in value creation.material
  • Copyright Irene Ng, 2012. All rights reserved. Future innovation • Separate user experiences come together, new affordances • exchanges held at different time/space – pervasive platforms • Industry verticals become members of same constellation – land grab/jumping verticals for revenues • Combinatorial innovation – ‘mashing’ software, hardware, materials • Incomplete products, constrained serendipity (emergent use, emergent contexts) • Decomposition, modularity, user-experience, business model – this is a new world for all of us 20 February 2013
  • Markets are forming at where service creates most wealth – in context
 •Serving contexts demand a rethink about how we research, design, innovate •Question for every offering: what contexts do you serve (value creation), where is exchange (value capture) and how do you design for contextual experience (value prop) i.e. how should you innovate your business model
  • The new world Collapse of boundaries Changes in industry dynamics - giant killers abound Green field for all nations Connectivity is direct driver of wealth creation (jobs, markets) Innovation and Speed will prevail
  • The new world Disruption is only enabled by technology. It happens because of the market and customer adoption and when lived lives are improved from it. Technology does not disrupt businesses. People do.
  • Copyright Irene Ng, 2012. All rights reserved. For more information..... Read the book! Value & Worth: Creating New Markets in the Digital Economy - Now out on Amazon Kindle and PDF 15 January 2013 * www.valueandmarkets.com
  • Multi-sided Market Platform for New Economic and Business Models http://www.hubofallthings.org
  • Copyright Irene Ng, 2012. All rights reserved. Thank you 15 January 2013