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  • 1. Business ModelingThe Bridge business innovators
  • 2. business modeling
  • 3. Business model as the backbone ofhow teams plan and act Business plan Strategic Financial 1 3 planning planning Business Business model Case Team Rollout Aspects Plan Knowledge Project planning 2 4 planning Business modeling as a guidance creates: !   a business “mindset” from day one consistency between teams  a customer focus Business modeling 14
  • 4. Analysis of the term ‘business model’… “The activity of buying and selling goods and services, or a particular company that does this, or work you do to earn money.” BUSINESS… …MODEL “A representation of something, either as a physical object which is usually smaller than the real object, or as a simple description of the object which might be used in calculations”. What is a business model? 15
  • 5. From marketing segments tostrategic segments 1 most valuable customer: on which customers are we focussing? 2 what we offer: What do we deliver and how unique is this? 3 how we deliver Searching for strategic segments  value drives  asks for different value concepts Strategic segments 16
  • 6. The challenge ! Choose the most important customers and organize around them WHO? WHAT? HOW?  Unsatisfied customers  Higher value  Lower costs  Non customers (yet)  Lower prices The Challenge 17
  • 7. Who is the most valued customer?businessman who doesn’t pay his own bill Everyone who’s paying for their own ticket Case 18
  • 8. How unique is the value curve?* Value attributes Low Medium High worldwide network wide choice in distribution new airplanes punctuality seat selection business class seat spacing in-flight meals frequent flyer miles refunds if plane is late flexibility to change flight refund for missed flight price attractiveness*based on ‘marketing as strategy’, nirmalya kumar Case 19
  • 9. Different segments asks for a different of realization of the value model flexibel single fare WHAT? full-service “no frills” high prices Low prices Purchasing Integrated outsourced Operations Multiple type of planes Single type aircraft Short- and long-haul routes point-2-point routes Prime airports (hubs) Rapid turnaround Assigned seating No 0n-flight meals HOW? Marketing Segmented customers Everyone is equal Varied meal services no frequent flyer programs Frequent flyer program one way ticket only Variable pricing Distribution Travel agents/worldwide systems direct sales*based on ‘marketing as strategy’, nirmalya kumar Case 20
  • 10. Business modeling in all it’s aspectsWHO? WHAT? HOW? Target group Proposition Delivery model distribution product / service partner network target group core processes communication revenue model coorporation model €sources: G. Hamel - Leading the Revolution – 2000; A. Osterwalder - How to Describe and Improve yourBusiness Model to Compete Better – 2005; N. Kumar - Marketing as Strategy - 2004 Business model 23
  • 11. From dream to business model WHO? WHAT? HOW? Target group Proposition Delivery model Correlation between definitions distribution WHAT? product / service HOW? partner networkgroup target group Proposition Delivery model core processes Business model communication revenue model coorporation model  What value do we offer? distribution product / service € partner network  How do we realize it? core processes communication revenue model coorporation model Earning model €  How do we earn money with this business model? Business case  What is the size of the target group?  How much are they willing to pay?  What are the cost to deliver?  Is the P&L positive, or are there other advantages? Business model 24
  • 12. Valued Customer Who are our valued customers? Are there customers who are unhappy with all the current offerings of the industry? Are there customers who have a need but are not being currently served by the industry? Are we trying to reach customers who are unaware that they need our product? If so, how are we going to create the need? Who is the user? The buyer? The influencer? The payer? What are the preferred criteria of each and their power in the buying decision? Is the target segment large enough to meet our sales objectives? What is the growth rate of the target segment? 3V’s 25
  • 13. Value Proposition What are the core needs we are trying to address with our value proposition? Does the value proposition fit the needs of our valued customers? What benefits are we actually delivering to the customers? Is our value proposition differentiated from the competitors or are we positioning in a crowded space? Are our value proposition claims reinforced by underlying product and service features? Are we positioning on attributes that we can defend against competitive attacks? 3 V’s 26
  • 14. Value Network Can we serve the valued customers with the value propositions at a profit? Do we have the necessary capabilities to deliver the value proposition? If not, could we acquire or partner with them? Would serving the valued customers have negative consequences on our existing customers of businesses? If so how are we going to control for this? Which high-cost or low-value-added activities could be eliminated, reduced, or outsourced in our value network? Where are the advantages of scale in our value network? Can we maintain scale while not losing flexibility? How different is our value network from the rest of the industry? What is our break-even point? Could we lower it by slightly varying the value network? 3V’s 27
  • 15. Examples of earning models time spent & fees subscription performance based spot market (share of) value creation % of revenues/profits generated % of cost cutting sales minus purchase web & portal related hardware & consumable software add on services Earning models 28
  • 16. More information about innovation Stationsplein 1 P.O. Box 907 3800 AX AmersfoortColofon The Netherlands +31 33 467 74 70 woutervanderburg@thebridge.nl www.thebridge.nl colofon 34