40 minutes-on-business-model-innovation3500
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  • http://www.flickr.com/photos/mgdtgd/134803926/ Creative Commons – Attribution Share Alike License everyone's idle Alchemy (www.wikipedia.org) The common perception of alchemists is that they were pseudo-scientists, who attempted to turn lead into gold, believing that the universe was composed of the four elements of earth, water, fire, air, and spent most of their time concocting miraculous remedies, poisons, and magic potions. Most alchemists were well-meaning and intelligent men and distinguished scientists, such as Isaac Newton and Robert Boyle. These innovators attempted to explore the nature of chemical substances and processes. They had to rely on experimentation, traditional know-how, rules of thumb and speculative thought in their attempts to uncover the mysteries of the physical universe. At the same time, it was clear to the alchemists that "something" was generally being conserved in chemical processes, even in the most dramatic changes of physical state and appearance; that is, that substances contained some "principles" that could be hidden under many outer forms, and revealed by proper manipulation. Throughout the history of the discipline, alchemists struggled to understand the nature of these principles, and find some order and sense in the results of their chemical experiments—which were often undermined by impure or poorly characterized reagents, the lack of quantitative measurements, and confusing and inconsistent nomenclature.
  • http://www.flickr.com/photos/timalamenciak/479780770/ CC Attribution-ShareAlike License Tim Alamenciak
  • http://www.flickr.com/photos/judepics/378329050/ Creative Commons – Attribution License Judith  
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  • http://www.denismartin.ch/Plats/Plat-2.htm Restaurant Denis Martin Le shampoing d'eau de mer aux st.Jacques et Wasabi
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  • Toronto, Ontario's Goldcorp Inc. launched the Internet gold rush… http://www.innovation.gc.ca/gol/innovation/stories.nsf/veng/ss01056e.htm http://www.businessweek.com/innovate/content/feb2007/id20070201_774736_page_2.htm http://www.fastcompany.com/magazine/59/mcewen.html By the mid-1990s, Rob McEwen, Chairman and CEO of Toronto's Goldcorp Inc., was convinced that there was more gold to be found in his company's Red Lake Mine, despite expert opinions to the contrary. Located near Balmertown, Ontario, the mine had been in production since 1948, but was a small, costly and capital-starved operation with a very uncertain future. For Red Lake Mine to survive, big changes were required. Therefore in February 1995, Goldcorp launched a US$7-million exploration program, the most aggressive in its history. Forty-five days later, Goldcorp's geologists made a significant gold discovery at the bottom of the Red Lake Mine and shattered the accepted geological model for the area. Over the next three years, Goldcorp's exploration efforts continued to meet with success. The discovery revealed a deposit that was large enough to be economically mined, despite the fact that the price of gold had fallen to a 20-year low.For McEwen, the big questions were: "How big is this deposit?" and "How long will it take to find out?" To answer these questions, Goldcorp's geologists held a two-day brainstorming session. The open sharing of ideas focussed the exploration efforts. Greatly encouraged by the positive results, McEwen wanted to engage a larger community of experts in a much greater brainstorming session: the "Goldcorp Challenge."For this competition, Goldcorp publicly shared all of its geological data from the past 52 years and offered US$500 000 in prizes for determining where they might find the next 6 million ounces of gold at the Red Lake Mine, regardless of whether gold was found. "I wanted to tap into the intellectual capital of the mining industry and focus it with laser-like precision on our Red Lake Mine," says McEwen. "In this way, I could speed up exploration and improve the odds of discovery."Entry forms were made available via the Internet, with on-line virtual prospecting seen as the fastest and most cost-effective way to run the competition. A CD-ROM package was sent to applicants to allow them access to a valuable proprietary on-line geological database, as well as software to analyse and depict the data graphically in two and three dimensions.Goldcorp's open source code approach to exploration was unprecedented in the worldwide mining industry, where confidentiality and secrecy about reserves and exploration data are the norm. Goldcorp's transparency exposed it to possible industry criticism or rejection of its geological methodology and calculations, and could also have prompted a takeover bid. McEwen, however, believed that the benefits of sharing data — the rapid acquisition of knowledge — would outweigh the risks. The Goldcorp Challenge proved to be a resounding success, attracting 475 000 hits to the Web site and 1400 entries from individuals, corporations, domestic and foreign government geological agencies and universities from 50 countries. The exploration proposals that Goldcorp received identified 110 drilling targets, 50 percent of which were new prospects. The winning entry was a collaboration by two rival groups from Australia: Fractal Graphics, in West Perth, and Taylor Wall and Associates, in Queensland, who had developed a powerful three-dimensional graphic depiction of the mine. Mark O'Dea (Canada) took second place, while George Langstaff (U.S.) and Alexander Yakubchuk (Russia) tied for third.So far, Goldcorp has struck gold on four of the top five targets generated by this process. Today, Goldcorp's Red Lake Mine is considered the richest gold mine in the world with a reserve grade (concentration of gold) of 2.1 ounces per ton of rock. It produces gold at a cost of $60 per ounce, which makes it one of the five lowest-cost gold producers in the world. McEwen notes, "The winners were able to analyse a large, complex database in a short period of time and generate targets without ever visiting the property. It's clear that this process is part of the future."In September 2000, Business Week magazine named Goldcorp one of the 50 most innovative companies on the Web. In February 2002, Fast Company magazine named Goldcorp one of its "Fast 50: Champions of Innovation" based on a worldwide survey of its readers. In March 2002, BHP Billiton of London, England, the world's largest mining company, announced at the Prospectors and Developers Association of Canada conference that it had employed the "Goldcorp principle" to accelerate its own exploration effort.
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40 minutes-on-business-model-innovation3500 Presentation Transcript

  • 1. Your Business Modelhow to identify and improve it La Trobe University, Melbourne, July 2007
  • 2. what’s on the menu today?
  • 3. the alchemy of business modelinnovation
  • 4. first: what are yourexpectations for today?
  • 5. example ofbusiness model innovation
  • 6. waste water treatment systems
  • 7. waste water Canadian distribution customer treatment offer sales force mining channel segment system sites revenue one time stream sales fee
  • 8. idea!
  • 9. total waste water sell waste water Canadian treatment sales forcetreatment system mining sites management recurring one time servicefee sales fee
  • 10. let’s doan exercise to understand
  • 11. offers distribution client channels segments personal banking your clientconsulting your offers your channels network executives segments banking dedicated bankingknowledge website professionals training program
  • 12. partner client suppliers follow-up network relationship sell waste water build core water Canadian treatment core activities treatment sales forcecapabilities treatment mining sitesknowledge systems system production one time costs costs sales fee
  • 13. suppliers follow-up call center water build total waste water error free Canadian treatment dispatch treatment treatment sales force systems mining sitesknowledge repair teams systems managementdevelopment variable costs production recurring of repair costs service fee services
  • 14. business model templateINFRASTRUCTURE OFFER CUSTOMER PARTNER CUSTOMER NETWORK RELATIONSHIP CORE VALUE TARGET CAPABILITIES PROPOSITION CUSTOMER VALUE DISTRIBUTION CONFIGURATION CHANNEL COST FINANCE REVENUE STRUCTURE STREAMS http://business-model-design.blogspot.com
  • 15. the basics of identifying andimproving business models
  • 16. 1. describe it 2. discuss it 3. improve it 4. implement it
  • 17. 1. describe it
  • 18. 1% 18%Strategy 300%Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper, Textrisus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felispulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros necTextdiam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod.Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor.Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibusvulputate. Proin dignissim eros at augue.TextNam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulumcondimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tinciduntet, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitaepurus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tinciduntblandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque.Development plan Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci. Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem.12% Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac Words libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque we don’t really know how to dignissim sodales. Aenean non justo nec magna lobortis volutpat.
  • 19. 2. discuss it
  • 20. but there is no commonlanguage
  • 21. 3. improve it
  • 22. we don’t reallyhave the tools
  • 23. 4. implement it
  • 24. Here Ok Here CEOs 10° Managers 60°everything else than Staff 360°planned
  • 25. the mainchalleng e
  • 26. think outside-of-the box
  • 27. “ insanity: doing the same thing over and over again and expecting different results ” Albert Einstein
  • 28. enabling businessmodel innovation
  • 29. user-centered
  • 30. creativity & exploration
  • 31. interdisciplinaryapproach
  • 32. strategic fit
  • 33. more examples
  • 34. what’s the connection?
  • 35. partners client relationship precision mechanical luxury micro- activities channels patients joints watches buyersengineering revenue costs streams
  • 36. Cemex example
  • 37. partners client relationship cement delivered on time core fleet cement by activities during time channels builderscompetencies delivery management cubic meter window revenue costs streams
  • 38. the businessmodel design process
  • 39. 1. identify interdisciplinary stakeholders -> set-up team
  • 40. 2. understand (business) environment –> frame problem
  • 41. 3. suspend reality -> ideate
  • 42. 4. bring back reality -> prototype
  • 43. 5. chose suitable design -> decide
  • 44. 6. execute -> project portfolio
  • 45. 7. evaluate, learn and redesign -> manage improvement
  • 46. Alexander Osterwalder, PhD alex@arvetica.com www.arvetica.com
  • 47. all photos from Flickrunder a creative commons licenseauthors indicated in comment page of ppt
  • 48. annex I other
  • 49. the businessmodeler’s toolbox
  • 50. co-creation
  • 51. ideation
  • 52. visualization
  • 53. prototyping
  • 54. some examples
  • 55. Goldcorp “geology prize” CUSTOMER 500’000 $US RELATIONSHIPSexploiting CUSTOMER mining mines SEGMENTS DISTRIBUTION research CHANNELS low costs through REVENUE open exploration STREAMS Goldcorp publicly shared all of its geological data and offered US$ 500’000 in prizes for determining where they might find the next 6 million ounces of gold
  • 56. from copyright to creativecommons
  • 57. Skype “eBay” website deliver voice & free VoIP & value global video quality added services (non segmented) software internet development software large scale development low margin free voice-over-IP VoIP telephony & value-added services
  • 58. 1291 Cityhomes low-cost hotel/rental in New York City young curious Swiss CUSTOMER RELATIONSHIPS apartment owners keep down low cost costs renting out DISTRIBUTION the cost accommodation rooms CHANNELS sensible New York find demand low cost rents
  • 59. Tecnovate “import” young curious CUSTOMER Europeans to RELATIONSHIPS India to work low-cost multi-keep down ACTIVITY lingual call DISTRIBUTION European costs CONFIGURATION center CHANNELS corporations outsourcing REVENUE low cost STREAMS business process outsourcing “up-side down” in India
  • 60. from bloated head to the longtail
  • 61. PARTNER CUSTOMER NETWORK RELATIONSHIPINFRASTRUCTURE CUSTOMER mobile network regular ad CORE OFFER CAPABILITIES operator that messages via “rents out” mobile phone increasing the capacity to Blyk VALUE TARGET number of mobile PROPOSITION CUSTOMER phone users with DISTRIBUTION FREE advertising the young and the the right profile to CHANNEL supported mobile hip increase the VALUE telephony subscribers fill value for CONFIGURATION advertisers out profile on the advertisers finding and access to a pool Internet contracting of targeted young advertisers advertising public sales force marketing to mobile users with an interesting advertising profile paying mobile phone minutes FINANCE marketing COST advertising fees STRUCTURE REVENUE STREAMS
  • 62. annex IIbusiness model template
  • 63. INFRASTRUCTURE OFFER CUSTOMER PARTNER CUSTOMER NETWORK RELATIONSHIP CORE VALUE TARGET CAPABILITIES PROPOSITION CUSTOMER VALUE DISTRIBUTION CONFIGURATION CHANNEL COST FINANCE REVENUE STRUCTURE STREAMS a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams
  • 64. describing a company’s business modelINFRASTRUCTURE PARTNER CUSTOMER CUSTOMER NETWORK RELATIONSHIP OFFER CORE TARGET portrays the network of explains the CAPABILITIES cooperative relationships a CUSTOMER agreements with other VALUE company establishes companies with its customersoutlines the capabilities PROPOSITION describes the required to run a customers a company companys business wants to offer value to model DISTRIBUTION VALUE gives an overall view of CONFIGURATION a companys bundle of CHANNEL products and services describes the channels describes the to communicate and arrangement of get in touch with activities and resources customerssums up the monetary describes the revenueconsequences to run a COST FINANCE REVENUE streams through which business model STRUCTURE STREAMS money is earned
  • 65. describing a company’s offer OFFER VALUE PROPOSITION value proposition 1 value proposition 2 …
  • 66. describing who a company offers value to OFFER CUSTOMER VALUE TARGET PROPOSITION CUSTOMERvalue proposition 1 target customer 1value proposition 2 target customer 2 … …
  • 67. describing how a company reaches its customers OFFER CUSTOMER VALUE DISTRIBUTION TARGET PROPOSITION CHANNEL CUSTOMERvalue proposition 1 distribution channel 1 target customer 1value proposition 2 distribution channel 2 target customer 2 … … …
  • 68. describing the relationships a company builds OFFER CUSTOMER VALUE CUSTOMER TARGET PROPOSITION RELATIONSHIP CUSTOMERvalue proposition 1 relationship type 1 target customer 1value proposition 2 relationship type 2 target customer 2 … … …
  • 69. describing how a company makes money OFFER FINANCE CUSTOMER VALUE REVENUE TARGET PROPOSITION STREAM CUSTOMERvalue proposition 1 revenue stream 1 target customer 1value proposition 2 revenue stream 2 target customer 2 … … …
  • 70. describing what capabilities are requiredINFRASTRUCTURE OFFER CORE VALUE CAPABILITIES PROPOSITION core capability 1 value proposition 1 core capability 2 value proposition 2 … …
  • 71. describing what activities are required INFRASTRUCTURE OFFER CORE VALUE VALUECAPABILITIES CONFIGURATION PROPOSITIONcore capability 1 activity 1 value proposition 1core capability 2 activity 2 value proposition 2 … … …
  • 72. describing the partners that leverage the business model INFRASTRUCTURE OFFER CORE PARTNER VALUECAPABILITIES NETWORK PROPOSITIONcore capability 1 partner 1 value proposition 1core capability 2 partner 2 value proposition 2 … … …
  • 73. describing the costs of a business modelINFRASTRUCTURE FINANCE OFFER CORE COST VALUE CAPABILITIES STRUCTURE PROPOSITION core capability 1 cost account 1 value proposition 1 core capability 2 cost account 2 value proposition 2 … … …