#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
Legend	
  
The	
  following	
  topics,	
  which	
  describe	
  elements	
  of	
  a	
  business	
  model	
  on	
  slides	
 ...
Axiom	
  of	
  Business	
  Model	
  Cyberne^cs	
  
CUSTOMER	
  
Hires	
  (Chooses)	
  
OUTPUT	
  (Product/Service)	
  from...
Examples	
  
1-­‐Minute	
  Living	
  System	
  Dashboard	
  
(“Measure-­‐Learn-­‐Build	
  (MLB)”	
  Loop)	
  
Startups	
  
Enjoy	
  Great	
  Success	
  
When	
  They	
  Discover	
  and	
  Solve	
  BUMPs:	
  
(Big	
  Urgent	
  Market...
Measure	
  and	
  Disrupt	
  the	
  Trade-­‐off	
  
of	
  
Red	
  Ocean	
  (Exis^ng)	
  Compe^tors	
  
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
BONUS	
  
Integra^on	
  of	
  	
  
Porter’s	
  5	
  Forces,	
  
Generic	
  Strategies,	
  and	
  
Value	
  Chain	
  	
  
U...
 
#4ROD.	
  Dr.	
  Rod	
  King.	
  rodkuhnhking@gmail.com	
  &	
  h8p://businessmodels.ning.com	
  &	
  h8p://twi8er.com/R...
Legend	
  
The	
  following	
  topics,	
  which	
  describe	
  elements	
  of	
  a	
  business	
  model	
  on	
  slide	
  ...
 
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
COLLABORATORS	
  
COMPETITORS	
  
SUPPLIERS	
...
Business	
  Model	
  Cyberne^cs	
  
Is	
  About	
  
Simply	
  Crea^ng,	
  Delivering,	
  and	
  Sharing	
  
Awesome	
  Cus...
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BUSINESS MODEL CYBERNETICS: Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)

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Holistic System Thinkers as well as Cyberneticians have long postulated the hypothesis that the structure of every living system or organization (including businesses) is the same and different. Yet, models to visualize this hypothesis are complex and difficult to understand, let alone apply in practical business situations. The Cybernetic (Living) System model of the emerging discipline of Business Model Cybernetics presents a simple and multidisciplinary visualization of how every living system or organization works and prospers.

The above Cybernetic (Living) System model can be used to visualize, document, create, improve, and innovate on strategy as well as products, services, brands, and business models. The Goal of Business Model Cybernetics is to simply create, deliver, and share Awesome Customer Experiences (ACEs).

http://goo.gl/h0Yz16

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  • @hudali15: Your view of the above Cybernetic (Living) System model as nested loops is excellent. A similar view was expressed by the late James Grier Miller whose book, 'Living Systems,' is my favorite work on General Systems Theory. Miller proposed that a generalized living system consists of 8 hierarchical levels (nested loops): cell, organ, organism, group, organization, community, society, and supranational systems. Although there are many ways to illustrate multilevel hierarchies such as in tree diagrams, I find the nested loop visualization to be more intuitive to understand and simple to use especially in representing living systems. I'm glad that the representation of nested loops appeals to you. With regard to the feedback between the environment and system, I find your question very deep. To recap, you asked: 'Does the system affect the environment the same way the environment affects the system?' My simple answer is, 'It depends.' In a simple emerging system where many elements are loosely rather than tightly integrated, changes in the system may have little or no impact on the environment. In a tightly integrated ecosystem or networked system, the changes in state of a system have unpredictable impacts on the environment. Sometimes - as in the case of the Butterfly effect in Chaos Theory - the proverbial flutter of a butterfly's wings in the Amazon forest may lead to a proverbial hurricane in Florida, USA. In business, the relationship between a business system and its environment is well explored by W. Chan Kim and Renee Mauborgne in an article, 'How Strategy Shapes Structure'; see http://hbr.org/2009/09/how-strategy-shapes-structure/ar/1 . To summarize, Kim and Mauborgne distinguish between a Structuralist (Red Ocean Strategist using Porter's Competitive Strategy with inherent trade-off of Cost vs. Differentiation) on the one hand and a Reconstructionist (Blue Ocean Strategist using Blue Ocean Strategy that resolves Cost vs Differentiation trade-off) on the other hand. A Structuralist assumes that boundaries of the existing industry/environment are fixed and works within existing boundaries and structure of the industry/environment to find the fittest Red Ocean business model. In contrast, a Reconstructionist implicitly assumes that a Blue Ocean strategy and business model can reconstruct the boundaries and structure of the existing industry/environment. And indeed, Steve Jobs/Apple has repeatedly demonstrated that existing industry boundaries and structure can be reconstructed; in other words, industries can be redefined. Strategy can indeed reshape structure. My own preference is to pursue Blue Ocean Strategy and create Blue Ocean business models especially in today's hypercompetitive environment where industry boundaries and structure are very fluid. In any exercise on strategy, one should ensure that the gap between vision and reality is rapidly closing. If there is a growing gap between vision and reality, then a business may be advised to 'pivot' or change its vision. Refusal to pivot the vision may result in serious waste of resources especially money, time, and manpower. Finally, I'd like to say that a system has impact on both the processor and output. If the system is 'closed', its impact on the processor and output would be greater than that of the environment. In 'open' systems, however, the environment plays a greater role. I hope that I've managed to answer some of your questions. Nevertheless, should you have further comments or questions, let me know.
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  • Rod, I spent the last ten minutes studying your 'living Model'. I can visualize it in many ways. The one that appeals most to me is that it is concentric loops or nested loops. I can follow the logic easily. One point that strikes me is the feedback between the system and the environment. Does the system affect the environment the same way the environment affects the system? How invariant the vision is allowed to be?
    A second point is the feedback between the processor and output. Does the system feedback to both of them? Or is limited to to processor?

    Thanks for your elaboration, Rod
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Transcript of "BUSINESS MODEL CYBERNETICS: Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)"

  1. 1.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   Living  System  Dashboard   ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)  
  2. 2.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR   (Tool/Org.;   Func@onality)   INPUT   (Ideas/   Resources)   OUTPUT   (Trade-­‐off/   Experience)   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard  
  3. 3.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   INPUT   (Ideas/   Resources)   Feedback(Strategy/TacIcs)   OUTPUT   (Trade-­‐off/   Experience)   +   -­‐   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   PROCESSOR   (Tool/Org.;   Func@onality)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard  
  4. 4.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   INPUT   (Ideas/   Resources)   Learn  (Strategy/TacIcs)   OUTPUT   (Trade-­‐off/   Experience)   +   -­‐   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   PROCESSOR   (Tool/Org.;   Func@onality)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   “Fake  XP”/Build   Living  System  Dashboard   Test  XP/Measure  
  5. 5.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   INPUT   (Ideas/   Resources)   Learn  (Strategy/TacIcs)   OUTPUT   (Trade-­‐off/   Experience)   +   -­‐   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   PROCESSOR   (Tool/Org.;   Func@onality)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  6. 6.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   Learn  (Strategy/TacIcs)   INPUT   (Ideas/   Resources)   +   -­‐   OUTPUT   (Trade-­‐off/   Experience)   SUPPLIERS   CUSTOMERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   PROCESSOR   (Tool/Org.;   Func@onality)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  7. 7.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   SUPERSYSTEM   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  8. 8.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  9. 9.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  10. 10.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  11. 11.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  12. 12.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   Present:  RED  OCEAN   +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   (AWFUL  FINAL  RESULT/VISION/GOAL/FAILURE  CRITERIA)   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  13. 13.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   Future:  BLUE  OCEAN   Living  System  Dashboard   “Fake  XP”/Build   Test  XP/Measure  
  14. 14. Legend   The  following  topics,  which  describe  elements  of  a  business  model  on  slides  7  to  13  are   obtained  from  the  book,  “Business  Model  Genera@on”  by  Alexander  Osterwalder  and   Yves  Pigneur.     q  Key  Partners  (KP)   q  Key  Resources  (KR)   q  Key  Ac@vi@es  (KA)   q  Value  Proposi@on  (VP)   q  Channels  (CH)/Customer   Rela@onships  (CR)   q  Customer  Segments  (CS)   q  Cost  Structure  (C$)   q  Revenue  Streams  (R$)   The  above  topics  are  also  visually  presented  on  the  Business  Model  Canvas  which  can   be  obtained  here:    h`p://www.businessmodelgenera@on.com/downloads/business_model_canvas_poster.pdf       PESTLIED  is  an  acronym  for  Poli@cal;  Economic;  Social;  Technological;   Legal;  Interna@onal;  Environmental;  Demographic  
  15. 15. Axiom  of  Business  Model  Cyberne^cs   CUSTOMER   Hires  (Chooses)   OUTPUT  (Product/Service)  from   PROCESSOR  (Organiza@on/Tool)   In  Order  to  Achieve   SYSTEM’S  “Job  To  Get  Done”  
  16. 16. Examples   1-­‐Minute  Living  System  Dashboard   (“Measure-­‐Learn-­‐Build  (MLB)”  Loop)  
  17. 17. Startups   Enjoy  Great  Success   When  They  Discover  and  Solve  BUMPs:   (Big  Urgent  Market  Problems)   &   Deliver  ACEs   (Awesome  Customer  Experiences)  
  18. 18. Measure  and  Disrupt  the  Trade-­‐off   of   Red  Ocean  (Exis^ng)  Compe^tors  
  19. 19.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS  for  Apple’s  iPod     Living  System  Dashboard  for  Apple’s  iPod   ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Red  Ocean  DisrupIon  (ROD)  Strategy/TacIcs)   INPUT   Apple’s  System:  Listen  to  Music   +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   “Insanely  Great  Customer  Experience”;  Extraordinary  Profitability   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   Digital  Music   Player   “Fake  XP”/Build   Test  XP/Measure  
  20. 20.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS  for  Cirque  du  Soleil     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Red  Ocean  DisrupIon  (ROD)  Strategy/TacIcs)   INPUT   Cirque  du  Soleil’s  System:  Experience  Live  Entertainment   +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Awesome  Customer  Experience,  Loyalty,  and  Profitability   Living  System  Dashboard  for  Cirque  du  Soleil   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   Circus-­‐ Theater   “Fake  XP”/Build   Test  XP/Measure  
  21. 21.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS  for  Southwest  Airlines     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Red  Ocean  DisrupIon  (ROD)  Strategy/TacIcs)   INPUT   Southwest  Airline’s  System:  Travel/Commute  (by  Air)     +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   Awesome  Customer  Experience,  Loyalty,  and  Profitability   Living  System  Dashboard  for  Southwest  Airlines   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   Airline   Service   “Fake  XP”/Build   Test  XP/Measure  
  22. 22.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS  for  Zappos   ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Red  Ocean  DisrupIon  (ROD)  Strategy/TacIcs)   INPUT   Zappos’  System:  Buy  Shoes  Online   +   -­‐   OUTPUT   NEW  ENTRANTS  (Startups)   KP   VP  KA  KR   CS   R$   C$   CH   CR   CUSTOMERS   SUPPLIERS   “Insanely  Great  Customer  Experience”;  Extraordinary  Profitability   Living  System  Dashboard  for  Zappos   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   eCommerce   Website   “Fake  XP”/Build   Test  XP/Measure  
  23. 23. BONUS   Integra^on  of     Porter’s  5  Forces,   Generic  Strategies,  and   Value  Chain     Using  the  Living  System  Dashboard  
  24. 24.   #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   BUSINESS  MODEL  CYBERNETICS     ENVIRONMENT   (IDEAL  FINAL  RESULT/VISION/GOAL/SUCCESS  CRITERIA)   PROCESSOR     Learn  (Strategy/TacIcs)   INPUT   +   -­‐   OUTPUT   CUSTOMERS   SUPPLIERS   IL   P  T   HR  FI   O   OL   MS   S   Profit  Margin   Simply  Create,  Deliver,  and  Share  Awesome  Customer  Experiences  (ACEs)   (IN)DIRECT  COMPETITORS  (Subs@tutes/Complements)   NEW  ENTRANTS  (Startups)   Living  System  Dashboard     SYSTEM  (Chain  &  Hierarchy  of  Jobs  To  Get  Done)   “Fake  XP”/Build   Test  XP/Measure  
  25. 25. Legend   The  following  topics,  which  describe  elements  of  a  business  model  on  slide  24  are   based  on  a  descrip@on  of  ac@vi@es  in  Michael  Porter’s  Value  Chain   Firm  infrastructure   Human  Resource  Management   Technology     Procurement   Inbound  Logis@cs    Opera@ons    Outbound  Logis@cs    Marke@ng  &  Sales    Service   IL   P   T   HR   FI   O   OL   MS   S  
  26. 26.                                 COLLABORATORS   COMPETITORS   SUPPLIERS   CUSTOMERS   DifferenIaIon  of  inputs   Supplier  concentraIon   Importance  of  volume  and   speed  to  supplier                                  Cost   relaIve  to     total  purchases   Impacts  of  input  on  cost  &   differenIaIon   Forward  IntegraIon   Presence  of    subsItute     inputs   Backward  IntegraIon   RelaIve  price  performance  of  subsItutes   Switching  costs  Buyer  propensity  to  subsItute   Diversity   Fixed  costs/value  added   Brand  idenIty   Overcapacity   InformaIon  complexity   Entry  barriers   Product  differences   Product  differenIaIon   Buyer  concentraIon   IncenIves  for   decision-­‐makers                              Price/                    Volume/    Total  purchase   Impacts  of  quality/ performance   Switching  costs   Buyer  info’   Backward/Forward   IntegraIon   Buyer   profits   Access  to  distribuIon   Economies  of  scale   Capital  requirements   Government  policy   Exit  barriers   Channel/distributor  concentraIon   DifferenIaIon  of  channels/distributors   Backward  IntegraIon   Forward  IntegraIon   Cost  advantages   Trends/PaYerns   Tipping  point   Virality   ROI   Source:  Based  on  Porter,  M.  (1998)  Compe^^ve  Advantage.  New  York:  The  Free  Press.                            Porter,  M.  (1998)  Compe^^ve  Strategy.  New  York:  The  Free  Press.     #4ROD.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h8p://businessmodels.ning.com  &  h8p://twi8er.com/RodKuhnKing   ENVIRONMENT  (INDUSTRY)   SYSTEM   (Chain  &  Hierarchy  of   Jobs  To  Get  Done)   BUSINESS  MODEL  CYBERNETICS   Checklist  for  Industry  Factors  
  27. 27. Business  Model  Cyberne^cs   Is  About   Simply  Crea^ng,  Delivering,  and  Sharing   Awesome  Customer  Experiences   (ACEs)  
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