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  • http://www.flickr.com/photos/dnevill/141809815/ CC Attribution-NoDerivs License Dan Nevill
  • people will go into buzz groups to get to know each other and to discuss issues, fears, hopes and opportunities they face in strategic management today
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  • The ATLAS detector under construction, Nov 2006  http://www.flickr.com/photos/giustino/307903073/ CC Attribution License Justin Clements
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  • In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
  • LIFT presentation on Literacy, Communication & Design http://www.janchipchase.com/blog/archives/2007/02/00.html
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  • In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
  • 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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  • http://www.flickr.com/photos/69875617@N00/3425464/ CC Attribution-ShareAlike License John Seb Barber Amazon S3 Here are the facts: This is a web service, and so Amazon is not releasing a customer facing service. They are offering standards-based REST and SOAP web services interfaces for developers. Entire classes of companies can be built on S3 that would not have been possible before due to infrastructure costs for the developer. Virtually any file type is allowed, up to 5 GB. Files may be set as public, shared or private and will have a unique URL. Pricing is cheaper than anything else I’ve seen: $0.15 per GB of storage per month, and $0.20 for each GB of data transferred up or downstream. This translates to $15 per month for 100 GB of storage, net of any transfer fees (to move that much data on to S3 would be a one time cost of $20). These prices are going to be significantly below the development and ongoing costs for small or medium sized storage projects - meaning a lot of the front end services I’ve previously profiled will be much better off moving their entire back end to S3.
  • Amazon S3 Here are the facts: This is a web service, and so Amazon is not releasing a customer facing service. They are offering standards-based REST and SOAP web services interfaces for developers. Entire classes of companies can be built on S3 that would not have been possible before due to infrastructure costs for the developer. Virtually any file type is allowed, up to 5 GB. Files may be set as public, shared or private and will have a unique URL. Pricing is cheaper than anything else I’ve seen: $0.15 per GB of storage per month, and $0.20 for each GB of data transferred up or downstream. This translates to $15 per month for 100 GB of storage, net of any transfer fees (to move that much data on to S3 would be a one time cost of $20). These prices are going to be significantly below the development and ongoing costs for small or medium sized storage projects - meaning a lot of the front end services I’ve previously profiled will be much better off moving their entire back end to S3.
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  • value innovation is at the centre of the concept of “Blue Ocean Strategy” which combine cost and differentiation W. Chan Kim is The BCG Chair Professor of Strategy and International Management at INSEAD. He was a professor at the University of Michigan Business School. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union and a Fellow of the World Economic Forum...... Full Bio   Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management at INSEAD, France. Mauborgne is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review .......
  • W. Chan Kim is The BCG Chair Professor of Strategy and International Management at INSEAD. He was a professor at the University of Michigan Business School. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union and a Fellow of the World Economic Forum...... Full Bio   Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management at INSEAD, France. Mauborgne is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review .......
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  • In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
  • 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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  • http://www.ahouseforallseasons.com/ Rocksure Property has launched an aspirational new investment and lifestyle vehicle, The Rocksure Property Alpha Fund, which provides investors with the opportunity to own a share in six exclusive properties located in some of the most glamorous locations in the world. The “House for All Seasons”, portfolio will consist of six exclusive properties, worth an average of £800,000 each. The innovation behind this portfolio is that through a commitment of £159,000, up to 36 investors gain access to the properties for an average of four rent-free weeks every year over the fund’s seven year lifecycle as well as benefiting, as owners, from gains accrued through the properties’ appreciation , which will be returned to investors at the end of the fund’s life. The six locations that have been identified are: Buzios in Brazil; Phuket in Thailand; Marrakech in Morocco; The Algarve coast in Portugal; Breckenridge, Colorado and New York City. This range of locations ensures that all tastes are catered for and provides investors with a variety of holiday options, from the year-round sunshine of Thailand and Morocco to the world-class skiing and snowboarding terrain of Colorado, which they can enjoy themselves, make available to friends and family or rent out to provide an income. Each of the properties is to be bought outright by the fund and, with no gearing to affect costs, all but a fraction of subscription funds will go directly into purchasing the properties and their furnishings. Running costs of the properties, including cook/housekeepers, maids, gardeners and pool cleaners, are covered from two sources, an annual management and maintenance contribution paid to the fund by each unit holder (£1,500 in 2007/8) and the net proceeds of renting a proportion of the available weeks. Around £2.5 million has already been raised by the fund, which is expected to have its first closing during January. The fund will have a life of seven years (plus six months for the acquisition and six months for the disposal of the properties) after which the capital and appreciation will be returned to shareholders. Strutt & Parker Real Estate Financial Services will be promoting the fund in the UK. David Rogers, of Rocksure, told WealthBriefing : "A House for All Seasons has been designed to give high net worth investors the best of both the investment and luxury travel worlds by combining competitive returns with a unique lifestyle offer. The fully staffed properties handpicked for the fund will answer the needs of the most demanding travellers. We have carefully selected their location in exclusive holiday hotspots, with each investor benefiting from an average of four rent-free weeks each year at their choice of properties."
  • http://www.flickr.com/photos/currybet/76007884/ Creative Commons – Attribution Share Alike License Martin Belam http://www.myfootballclub.co.uk/
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Business model-design-and-innovation-for-competitive-advantage Business model-design-and-innovation-for-competitive-advantage Presentation Transcript

  • Management2.0:Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD alex@arvetica.com
  • change is the process bywhich the future invades our lives -> Alvin Toffler
  • first of all: what are YOUR concerns? (buzz groups)
  • what are YOUR biggest issues andfears you face in strategic managementtoday?
  • where do YOU see the largestopportunities to improve strategicmanagement today?
  • your expectations fortoday?
  • what isinnovation?
  • tell me about the mostimportant innovations in your company
  • types ofinnovation?
  • technology innovation
  • processinnovation
  • product &serviceinnovation
  • business modelinnovation
  • four rings of innovation business model innovation product & service innovation process innovation technology innovation
  • which one of yourexamples qualify as business model innovation?
  • “Business model innovation matters” and it is a top priority of CEOs
  • Operating Margin Growth in Excess of Competitive Peers compound annual growth rate over five years[Source: IBM, CEOs are expanding the innovation horizon: important implications for CIOs]
  • Benefits Cited by Business Model Innovators percent of respondents[Source: IBM, Global CEO Study 2006]
  • some examples
  • NetJets: FractionalOwnership
  • Zopa.com: Peer-to-Peerlending
  • Bellum Concepts
  • why talk aboutbusiness models?
  • how do you describe abusiness model?
  • without a common language
  • how do you communicate abusiness model?
  • 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 through inappropriate 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 dignissim sodales. Aenean non justo nec magna lobortis volutpat. means
  • Here Ok HereCEOs 10° Managers 60° Staff 360°
  • how do you implement a businessmodel?
  • with outdated methods
  • how do you measure thesuccess of a business model?
  • we don’t
  • how do you change abusiness model andinnovate?
  • we re-invent thewheel
  • what is a business model?
  • business model frameworkINFRASTRUCTURE OFFER CUSTOMER PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMERCAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS 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 [Osterwalder (2004) The Business Model Ontology]
  • case study
  • you become the new owner of asoccer club …
  • describe YOURclub’s business model
  • what value proposition do you offer,to which customer segments? describing how a wealth management bank acquires its clients
  • what value proposition do you offer,to which customer segments?(model) OFFER CUSTOMER VALUE CUSTOMER PROPOSITION SEGMENTS value proposition 1 target customer 1 value proposition 2 target customer 2 … …
  • what value proposition do you offer,to which customer segments?(example) OFFER CUSTOMER spectacular fans offensive football advertising space & advertisers high visibility … …
  • how do you reach your customers?
  • how do you reach your customers?(model) OFFER CUSTOMER COMMUNICATION VALUE CUSTOMER & DISTRIBUTION PROPOSITION SEGMENTS CHANNELS value proposition 1 channel 1 target customer 1 value proposition 2 channel 2 target customer 2 … … …
  • how do you reach your customers?(example) OFFER CUSTOMER stadium & box office spectacular club owned TV fans offensive football channel mobile phone TV advertising space & sales force advertisers high visibility
  • how do you build relationships?
  • how do you buildrelationships with yourcustomers? (model) OFFER CUSTOMER VALUE CUSTOMER CUSTOMER PROPOSITION RELATIONSHIP SEGMENTS value proposition 1 mechanism 1 target customer 1 value proposition 2 mechanism 2 target customer 2 … … …
  • how do you buildrelationships with yourcustomers? (example) OFFER CUSTOMER personalized website (ticketing) spectacular team blog (RSS) fans offensive football …
  • how do you earn your moneywith this business model?
  • how do you earn your moneywith this business model?(model) OFFER FINANCE VALUE REVENUE CUSTOMER PROPOSITION STREAMS SEGMENTS value proposition 1 revenue stream 1 target customer 1 value proposition 2 revenue stream 2 target customer 2 … … …
  • how do you earn your moneywith this business model?(example) OFFER FINANCE ticket sales spectacular TV channel fans offensive football subscriber fees mobile phone TV subscriber fees advertising space & advertising revenues advertisers high visibility
  • the businessmodels place in a company
  • STRATEGY BUSINES S MODELORGANIZATION TECHNOLOGYthe business model’s place in thecompany
  • external forces
  • 5 forces customer technological needs change BUSINES S MODEL legal socialenvironment environment competition
  • the big picture (businessmodel)
  • the bigpicture Partner Network Customer Relationship • food & beverages • personalized web profile • ticketing services • newsletter • promoters • team blog (RSS) • ad placement • VIP events with team • telecom operator • … • TV operator • … Core Capability Activity Configuration Value Proposition Distribution Channel Target Customer• play attractive & win • team management • attractive soccer • stadium • fans (families, etc.) games • event management • 360º event (match, • POS networks • fan groups• brand management • venue management dining, shopping) • club website (+online TV) • companies• video images • ticketing • exclusive VIP lounges • club cable TV channel • event/concert organizers• channel management • VIP relationship • merchandising • mobile phone TV channel • advertisers management • renting out stadium • … • … • video crew •… •… Cost Structure Revenue Model • team & maintenance • Ticket fees & season tickets • infrastructure management • online TV subscription revenues • marketing • revenue sharing cable & mobile phone TV • video • renting out stadium for events • advertising revenues • merchandising revenues
  • value createsrevenues Partner Network Customer Relationship • food & beverages • personalized web profile • ticketing services • newsletter • promoters • team blog (RSS) • ad placement • VIP events with team • telecom operator • … • TV operator • … Core Capability Activity Configuration Value Proposition Distribution Channel Target Customer• play attractive & win • team management • attractive soccer • stadium • fans (families, etc.) games • event management • 360º event (match, • POS networks • fan groups• brand management • venue management dining, shopping) • club website (+online TV) • companies• video images • ticketing • exclusive VIP lounges • club cable TV channel • event/concert organizers• channel management • VIP relationship • merchandising • mobile phone TV channel • advertisers management • renting out stadium • … • … • video crew •… •… Cost Structure Revenue Model • team & maintenance • Ticket fees & season tickets • infrastructure management • online TV subscription revenues • marketing • revenue sharing cable & mobile phone TV • video • renting out stadium for events • advertising revenues • merchandising revenues
  • creating value requiresinfrastructure Partner Network Customer Relationship • food & beverages • personalized web profile • ticketing services • newsletter • promoters • team blog (RSS) • ad placement • VIP events with team • telecom operator • … • TV operator • … Core Capability Activity Configuration Value Proposition Distribution Channel Target Customer• play attractive & win • team management • attractive soccer • stadium • fans (families, etc.) games • event management • 360º event (match, • POS networks • fan groups• brand management • venue management dining, shopping) • club website (+online TV) • companies• video images • ticketing • exclusive VIP lounges • club cable TV channel • event/concert organizers• channel management • VIP relationship • merchandising • mobile phone TV channel • advertisers management • renting out stadium • … • … • video crew •… •… Cost Structure Revenue Model • team & maintenance • Ticket fees & season tickets • infrastructure management • online TV subscription revenues • marketing • revenue sharing cable & mobile phone TV • video • renting out stadium for events • advertising revenues • merchandising revenues
  • infrastructure generatescosts Partner Network Customer Relationship • food & beverages • personalized web profile • ticketing services • newsletter • promoters • team blog (RSS) • ad placement • VIP events with team • telecom operator • … • TV operator • … Core Capability Activity Configuration Value Proposition Distribution Channel Target Customer• play attractive & win • team management • attractive soccer • stadium • fans (families, etc.) games • event management • 360º event (match, • POS networks • fan groups• brand management • venue management dining, shopping) • club website (+online TV) • companies• video images • ticketing • exclusive VIP lounges • club cable TV channel • event/concert organizers• channel management • VIP relationship • merchandising • mobile phone TV channel • advertisers management • renting out stadium • … • … • video crew •… •… Cost Structure Revenue Model • team & maintenance • Ticket fees & season tickets • infrastructure management • online TV subscription revenues • marketing • revenue sharing cable & mobile phone TV • video • renting out stadium for events • advertising revenues • merchandising revenues
  • the profitzone Partner Network Customer Relationship • food & beverages • personalized web profile • ticketing services • newsletter • promoters • team blog (RSS) • ad placement • VIP events with team • telecom operator • … • TV operator • … Core Capability Activity Configuration Value Proposition Distribution Channel Target Customer• play attractive & win • team management • attractive soccer • stadium • fans (families, etc.) games • event management • 360º event (match, • POS networks • fan groups• brand management • venue management dining, shopping) • club website (+online TV) • companies• video images • ticketing • exclusive VIP lounges • club cable TV channel • event/concert organizers• channel management • VIP relationship • merchandising • mobile phone TV channel • advertisers management • renting out stadium • … • … • video crew •… •… Cost Structure Revenue Model • team & maintenance • Ticket fees & season tickets • infrastructure management • online TV subscription revenues • marketing • revenue sharing cable & mobile phone TV • video < • renting out stadium for events • advertising revenues • merchandising revenues
  • the process ofdesigning innovative business models
  • the focus of thebusiness model innovator & designer
  • user-centered
  • PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMERCAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS
  • Nokia: JanChipchase
  • creativity & exploration
  • Googleplex
  • 70:20:10
  • API
  • PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMERCAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS
  • continuousinnovation
  • interdisciplinaryapproach
  • Grameen PhoneBangladesh
  • Grameen Bank customer relationships telecom operatorsmicro-credit village phone ladies villager telephony mobile activity telephony configuration source of Grameen phone ladies revenue Bank (billing) billing telecom mobile phone infrastructure revenues
  • holisticdesign
  • Apple iTunes &iPod
  • content producers lifestyle brand hardware suppliershardware & prod. & softw.softw. dev. design iPod Apple storese-commerce brand management dealer “high-end” iBook network consumer multimedia hardwarerights mgmt distribution multimedia iTunes downloads content content distribution hardware revenues cost structure multimedia revenues
  • strategic fit
  • the Amazon.com youknow
  • Amazon Simple Storage Services(S3)
  • customer partners relationships product selection content selling stuff mass Amazon.com management on the Web customer distribution warehousing Web2.0 Amazon S3 Internet API & distribution companies product search A9 product e-commerce data services Internet search sitesAmazon.com data grid selling stuff IT infra data storage fees marketing search engine revenues
  • the businessmodeler’s toolbox
  • co-creation
  • ideation
  • visualization
  • prototyping
  • the design process
  • 1. identify interdisciplinary stakeholders -> set-up team
  • do you have to get the ITteam out of their cubicles?
  • 2. understand (business) environment –> frame problem
  • various starting points / depending on context PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMERCAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS [Osterwalder (2004) The Business Model Ontology]
  • 3. suspend reality -> ideate
  • 4. bring back reality -> prototype
  • 5. chose suitable design -> decide
  • 6. sketch out projects & workload -> draw implementation plan
  • Project EstimatedArea name workload 10 Project V1Value man/daysProposition 120 Project V2 man/daysDistribution 38 Project C1Channels man/days…
  • 7. outline key indicators to follow -> choose measures
  • Project Estimated KPI TargetArea name workload (measure) level 10 Project V1Value man/daysProposition 120 Project V2 man/daysDistribution 38 Project C1Channels man/days…
  • 8. select the right teams and people -> make responsible
  • Project Estimated KPI TargetArea leader name workload (measure) level 10 Project V1 Mr. JanValue man/daysProposition 120 Project V2 Ms. Tee man/daysDistribution 38 Project C1Channels man/days…
  • 9. execute the plan -> manage implementation & change
  • 10. evaluate, learn and redesign -> manage improvement
  • designing blue oceans
  • > market boundaries are not given> they are reconstructed by the actions & beliefs of industry players
  • RED OCEAN BLUE OCEAN• compete in existing markets • create uncontested markets• beat the competition • make competition irrelevant• explore existing demand • create & capture new demand• make the value/cost trad-off • break value/cost trad-off• align with differentiation OR • align with differentiation low cost AND low cost
  • differentiate your valueproposition
  • working definition valueproposition • a customer value proposition gives an overall view of a companys bundle of products, services and client advice. • it is the sum of the total benefits a customer is promised to receive in return for a payment (or other value transfer)
  • group warm-up what are the 5 most important competitive attributes that characterize a game console’s offer? (e.g. price, performance, design) attribute 1 attribute 2 e.g. performance e.g. price
  • 5 attributes 1 2 1. most important attribute 2. second most important 3. … 3 4. …4 - -
  • 1. …2. …3. …4. …5. …
  • draw a value proposition 5 - high bank’s performance 3 - medium 1 - low 1 2 3 4 5 ut e te te ut e ut e ib ibu ibu rib rib attr attr attr at t at t [Kim & Mauborgne (2002) Charting Your Companys Future]
  • liveExcel
  • eliminate raise reduce create
  • strong & valuable approach, but limitedview
  • PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMERCAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS
  • examples
  • 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
  • from copyright to creativecommons
  • 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
  • 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
  • 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
  • Netflix independent profile filmslarge movie (niche) movies specialized database over the clientele ACTIVITY Internet Web CONFIGURATION COST REVENUE STRUCTURE STREAMS online movie rental (with large niche movie database)
  • from bloated head to the longtail
  • Alexander Osterwalder, PhD alex@arvetica.com www.arvetica.com
  • all photos from Flickrunder a creative commons licenseauthors indicated in comment page of ppt
  • Nobody knows your business environment better than yourself. We co-design your strategic vision by buildingwe co-create on your knowledge. Through group thinking we find the right answers to the right questions together Having a great vision is not sufficient - implementation counts. We help you reconcile long term views with shortwe operationalize term actions. We make strategy everyones job by translating it into pragmatic and prioritized projects. Change does not happen accidentally it has to be managed. We help you align strategy, people andwe manage change processes with respect to your organizational culture and values. When you stop learning, you stop competing. We scan the knowledge universe for you, across disciplines andwe build knowledge industries. We transfer the best methods, tools and theory in business to your organization. Specific problems require specific skills that you do not necessarily dispose of in-house. Through ourwe connect interdisciplinary network we connect you with leading domain experts.
  • annexes
  • annex Ibusiness model template
  • 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
  • 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
  • describing a company’s offer OFFER VALUE PROPOSITION value proposition 1 value proposition 2 …
  • describing who a company offers value to OFFER CUSTOMER VALUE TARGET PROPOSITION CUSTOMERvalue proposition 1 target customer 1value proposition 2 target customer 2 … …
  • 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 … … …
  • 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 … … …
  • 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 … … …
  • describing what capabilities are requiredINFRASTRUCTURE OFFER CORE VALUE CAPABILITIES PROPOSITION core capability 1 value proposition 1 core capability 2 value proposition 2 … …
  • 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 … … …
  • 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 … … …
  • 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 … … …
  • annex ii other