Business model-design-and-innovation-for-competitive-advantage

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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
  • http://www.flickr.com/photos/andidfl/205895059/ CC Attribution-NonCommercial-NoDerivs License Andreas Reinhold
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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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  • http://www.netjets.com/
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  • http://www.bellumconcepts.net/
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  • http://en.wikipedia.org/wiki/Image:Brueghel-tower-of-babel.jpg
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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.
  • http://www.flickr.com/photos/framesniper/153464496/ CC Attribution-NoDerivs License Jeff Ryan
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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 .......
  • http://www.flickr.com/photos/shutr/505866600/ CC Attribution License Lucy
  • 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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Transcript

  • 1. Management2.0:Competitive Advantage through BusinessModel Design & InnovationGuadalajara, June 2007Alexander Osterwalder, PhDalex@arvetica.com
  • 2. change is the process bywhich the future invades ourlives-> Alvin Toffler
  • 3. first of all: whatare YOURconcerns?(buzz groups)
  • 4. what are YOUR biggest issues andfears you face in strategic managementtoday?
  • 5. where do YOU see the largestopportunities to improve strategicmanagement today?
  • 6. your expectations fortoday?
  • 7. what isinnovation?
  • 8. tell me about the mostimportant innovations in yourcompany
  • 9. types ofinnovation?
  • 10. technologyinnovation
  • 11. processinnovation
  • 12. product &serviceinnovation
  • 13. business modelinnovation
  • 14. four rings of innovationbusiness model innovationproduct & service innovationprocess innovationtechnology innovation
  • 15. which one of yourexamples qualify asbusiness modelinnovation?
  • 16. “Business model innovation matters” and it isa top priority of CEOs
  • 17. Operating Margin Growth in Excess ofCompetitive Peerscompound annual growth rate over five years[Source: IBM, CEOs are expanding the innovation horizon: important implications for CIOs]
  • 18. Benefits Cited by Business ModelInnovatorspercent of respondents[Source: IBM, Global CEO Study 2006]
  • 19. some examples
  • 20. NetJets: FractionalOwnership
  • 21. Zopa.com: Peer-to-Peerlending
  • 22. Bellum Concepts
  • 23. why talk aboutbusiness models?
  • 24. how do you describe abusiness model?
  • 25. without a common language
  • 26. how do youcommunicate abusiness model?
  • 27. 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 sitamet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quismolestie 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. Infacilisis 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, consectetueradipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donecornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a eliteu 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.• Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequatfringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio aclibero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Utlacinia 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 nequedignissim sodales. Aenean non justo nec magna lobortis volutpat.StrategyLorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper,risus 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 necdiam. 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.Nam 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.WordsTextTextText18%300%12%1%through inappropriatemeans
  • 28. HereCEOs10°Managers60°HereStaff360°Ok
  • 29. how do you implement a businessmodel?
  • 30. with outdated methods
  • 31. how do you measure thesuccess of a business model?
  • 32. we don’t
  • 33. how do you change abusiness model andinnovate?
  • 34. we re-invent thewheel
  • 35. what is a businessmodel?
  • 36. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSACTIVITYCONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSINFRASTRUCTURE CUSTOMEROFFERFINANCEa business model describes the value an organization offers tovarious customers and portrays the capabilities and partnersrequired for creating, marketing, and delivering this value andrelationship capital with the goal of generating profitable andsustainable revenue streamsDISTRIBUTIONCHANNELS[Osterwalder (2004) The Business Model Ontology]business model framework
  • 37. case study
  • 38. you become the new owner of asoccer club …
  • 39. describe YOURclub’s businessmodel
  • 40. describing how a wealth management bank acquires its clientswhat value proposition do you offer,to which customer segments?
  • 41. VALUEPROPOSITIONCUSTOMERSEGMENTSvalue proposition 1value proposition 2…target customer 1target customer 2…CUSTOMEROFFERwhat value proposition do you offer,to which customer segments?(model)
  • 42. what value proposition do you offer,to which customer segments?(example)spectacularoffensive footballfansCUSTOMEROFFERadvertising space &high visibilityadvertisers… …
  • 43. how do you reach your customers?
  • 44. VALUEPROPOSITIONCOMMUNICATION& DISTRIBUTIONCHANNELSvalue proposition 1value proposition 2…channel 1channel 2…OFFERhow do you reach your customers?(model)CUSTOMERSEGMENTStarget customer 1target customer 2…CUSTOMER
  • 45. spectacularoffensive footballstadium & box officeCUSTOMEROFFERhow do you reach your customers?(example)club owned TVchannelfansmobile phone TVadvertising space &high visibilitysales force advertisers
  • 46. how do you build relationships?
  • 47. VALUEPROPOSITIONCUSTOMERRELATIONSHIPvalue proposition 1value proposition 2…mechanism 1mechanism 2…OFFERCUSTOMERSEGMENTStarget customer 1target customer 2…CUSTOMERhow do you buildrelationships with yourcustomers? (model)
  • 48. spectacularoffensive footballpersonalized website(ticketing)CUSTOMEROFFERteam blog (RSS) fans…how do you buildrelationships with yourcustomers? (example)
  • 49. how do you earn your moneywith this business model?
  • 50. VALUEPROPOSITIONREVENUESTREAMSvalue proposition 1value proposition 2…revenue stream 1revenue stream 2…OFFERCUSTOMERSEGMENTStarget customer 1target customer 2…FINANCEhow do you earn your moneywith this business model?(model)
  • 51. spectacularoffensive footballticket salesFINANCEOFFERTV channelsubscriber feesfansmobile phone TVsubscriber feesadvertising space &high visibilityadvertising revenues advertisershow do you earn your moneywith this business model?(example)
  • 52. the businessmodels place in acompany
  • 53. the business model’s place in thecompanyBUSINESS MODELORGANIZATIONSTRATEGYTECHNOLOGY
  • 54. external forces
  • 55. 5 forcesBUSINESS MODELlegalenvironmentsocialenvironmentcompetitioncustomerneedstechnologicalchange
  • 56. the big picture (businessmodel)
  • 57. • team management• event management• venue management• ticketing• VIP relationshipmanagement• video crew• …• attractive soccer• 360º event (match,dining, shopping)• exclusive VIP lounges• merchandising• renting out stadium• …• stadium• POS networks• club website (+online TV)• club cable TV channel• mobile phone TV channel• …• play attractive & wingames• brand management• video images• channel management• fans (families, etc.)• fan groups• companies• event/concert organizers• advertisers• …• team & maintenance• infrastructure management• marketing• video• Ticket fees & season tickets• online TV subscription revenues• revenue sharing cable & mobile phone TV• renting out stadium for events• advertising revenues• merchandising revenues• food & beverages• ticketing services• promoters• ad placement• telecom operator• TV operator• …• personalized web profile• newsletter• team blog (RSS)• VIP events with team• …Value Proposition Distribution Channel Target CustomerCustomer RelationshipPartner NetworkActivity ConfigurationCore CapabilityCost Structure Revenue Modelthe bigpicture
  • 58. • team management• event management• venue management• ticketing• VIP relationshipmanagement• video crew• …• attractive soccer• 360º event (match,dining, shopping)• exclusive VIP lounges• merchandising• renting out stadium• …• stadium• POS networks• club website (+online TV)• club cable TV channel• mobile phone TV channel• …• play attractive & wingames• brand management• video images• channel management• fans (families, etc.)• fan groups• companies• event/concert organizers• advertisers• …• team & maintenance• infrastructure management• marketing• video• Ticket fees & season tickets• online TV subscription revenues• revenue sharing cable & mobile phone TV• renting out stadium for events• advertising revenues• merchandising revenues• food & beverages• ticketing services• promoters• ad placement• telecom operator• TV operator• …• personalized web profile• newsletter• team blog (RSS)• VIP events with team• …Value Proposition Distribution Channel Target CustomerCustomer RelationshipPartner NetworkActivity ConfigurationCore CapabilityCost Structure Revenue Modelvalue createsrevenues
  • 59. • team management• event management• venue management• ticketing• VIP relationshipmanagement• video crew• …• attractive soccer• 360º event (match,dining, shopping)• exclusive VIP lounges• merchandising• renting out stadium• …• stadium• POS networks• club website (+online TV)• club cable TV channel• mobile phone TV channel• …• play attractive & wingames• brand management• video images• channel management• fans (families, etc.)• fan groups• companies• event/concert organizers• advertisers• …• team & maintenance• infrastructure management• marketing• video• Ticket fees & season tickets• online TV subscription revenues• revenue sharing cable & mobile phone TV• renting out stadium for events• advertising revenues• merchandising revenues• food & beverages• ticketing services• promoters• ad placement• telecom operator• TV operator• …• personalized web profile• newsletter• team blog (RSS)• VIP events with team• …Value Proposition Distribution Channel Target CustomerCustomer RelationshipPartner NetworkActivity ConfigurationCore CapabilityCost Structure Revenue Modelcreating value requiresinfrastructure
  • 60. • team management• event management• venue management• ticketing• VIP relationshipmanagement• video crew• …• attractive soccer• 360º event (match,dining, shopping)• exclusive VIP lounges• merchandising• renting out stadium• …• stadium• POS networks• club website (+online TV)• club cable TV channel• mobile phone TV channel• …• play attractive & wingames• brand management• video images• channel management• fans (families, etc.)• fan groups• companies• event/concert organizers• advertisers• …• team & maintenance• infrastructure management• marketing• video• Ticket fees & season tickets• online TV subscription revenues• revenue sharing cable & mobile phone TV• renting out stadium for events• advertising revenues• merchandising revenues• food & beverages• ticketing services• promoters• ad placement• telecom operator• TV operator• …• personalized web profile• newsletter• team blog (RSS)• VIP events with team• …Value Proposition Distribution Channel Target CustomerCustomer RelationshipPartner NetworkActivity ConfigurationCore CapabilityCost Structure Revenue Modelinfrastructure generatescosts
  • 61. • team management• event management• venue management• ticketing• VIP relationshipmanagement• video crew• …• attractive soccer• 360º event (match,dining, shopping)• exclusive VIP lounges• merchandising• renting out stadium• …• stadium• POS networks• club website (+online TV)• club cable TV channel• mobile phone TV channel• …• play attractive & wingames• brand management• video images• channel management• fans (families, etc.)• fan groups• companies• event/concert organizers• advertisers• …• team & maintenance• infrastructure management• marketing• video• Ticket fees & season tickets• online TV subscription revenues• revenue sharing cable & mobile phone TV• renting out stadium for events• advertising revenues• merchandising revenues• food & beverages• ticketing services• promoters• ad placement• telecom operator• TV operator• …• personalized web profile• newsletter• team blog (RSS)• VIP events with team• …Value Proposition Distribution Channel Target CustomerCustomer RelationshipPartner NetworkActivity ConfigurationCore CapabilityCost Structure Revenue Modelthe profitzone<
  • 62. the process ofdesigning innovativebusiness models
  • 63. the focus of thebusiness modelinnovator &designer
  • 64. user-centered
  • 65. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSACTIVITYCONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSDISTRIBUTIONCHANNELS
  • 66. Nokia: JanChipchase
  • 67. creativity & exploration
  • 68. Googleplex
  • 69. 70:20:10
  • 70. API
  • 71. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSACTIVITYCONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSDISTRIBUTIONCHANNELS
  • 72. continuousinnovation
  • 73. interdisciplinaryapproach
  • 74. Grameen PhoneBangladesh
  • 75. villagetelephonytelecominfrastructurecustomerrelationshipsvillageractivityconfigurationmicro-creditGrameenBankmobile phonerevenuessource ofrevenuemobiletelephonybillingtelecomoperatorsGrameenBank (billing)phone ladiesphone ladies
  • 76. holisticdesign
  • 77. Apple iTunes &iPod
  • 78. iPodcost structurelifestyle brand“high-end”consumerprod. & softw.designhardware &softw. dev.hardwarerevenuesiTunesmultimediadownloadse-commercemultimediarights mgmtiBookcontentproducersApple storesdealernetworkmultimediarevenueshardwaresuppliersbrandmanagementhardwaredistributioncontentdistributioncontent
  • 79. strategic fit
  • 80. the Amazon.com youknow
  • 81. Amazon Simple Storage Services(S3)
  • 82. selling stuffon the WebIT infracustomerrelationshipsmasscustomerdata servicesAmazon.comdata gridpartnersselling stuffAmazon S3Amazon.comInternet APIWeb2.0companieswarehousing& distributiondistributioncontentmanagementproductselectionA9 productsearchdata storagefeesproductsearchsearch enginerevenuese-commercesitesInternetmarketing
  • 83. the businessmodeler’s toolbox
  • 84. co-creation
  • 85. ideation
  • 86. visualization
  • 87. prototyping
  • 88. the designprocess
  • 89. 1. identify interdisciplinarystakeholders-> set-up team
  • 90. do you have to get the ITteam out of their cubicles?
  • 91. 2. understand (business)environment–> frame problem
  • 92. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSACTIVITYCONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSDISTRIBUTIONCHANNELS[Osterwalder (2004) The Business Model Ontology]various starting points / depending oncontext
  • 93. 3. suspend reality-> ideate
  • 94. 4. bring backreality ->prototype
  • 95. 5. chose suitabledesign-> decide
  • 96. 6. sketch out projects & workload-> draw implementation plan
  • 97. AreaProjectnameEstimatedworkloadValuePropositionProject V110man/daysProject V2120man/daysDistributionChannelsProject C138man/days…
  • 98. 7. outline key indicators tofollow-> choose measures
  • 99. AreaProjectnameEstimatedworkloadKPI(measure)TargetlevelValuePropositionProject V110man/daysProject V2120man/daysDistributionChannelsProject C138man/days…
  • 100. 8. select the right teams andpeople-> make responsible
  • 101. AreaProjectnameEstimatedworkloadKPI(measure)TargetlevelleaderValuePropositionProject V110man/daysMr. JanProject V2120man/daysMs. TeeDistributionChannelsProject C138man/days…
  • 102. 9. execute the plan-> manage implementation &change
  • 103. 10. evaluate, learn andredesign-> manage improvement
  • 104. designing blueoceans
  • 105. > market boundaries arenot given> they are reconstructedby the actions & beliefsof industry players
  • 106. • compete in existing markets• beat the competition• explore existing demand• make the value/cost trad-off• align with differentiation ORlow cost• create uncontested markets• make competition irrelevant• create & capture new demand• break value/cost trad-off• align with differentiationAND low costRED OCEAN BLUE OCEAN
  • 107. differentiate your valueproposition
  • 108. • a customer value proposition gives an overall view of acompanys bundle of products, services and clientadvice.• it is the sum of the total benefits a customer ispromised to receive in return for a payment (or othervalue transfer)working definition valueproposition
  • 109. what are the 5 mostimportant competitiveattributes thatcharacterize a gameconsole’s offer?(e.g. price, performance, design)attribute 2e.g. priceattribute 1e.g. performancegroup warm-up
  • 110. 1234--1. most important attribute2. second most important3. …4. …5 attributes
  • 111. 1. …2. …3. …4. …5. …
  • 112. attribute1attribute2attribute3attribute51 - low5 - high3 - mediumbank’sperformance[Kim & Mauborgne (2002) Charting Your Companys Future]draw a value propositionattribute4
  • 113. liveExcel
  • 114. eliminate raisereduce create
  • 115. strong & valuable approach, but limitedview
  • 116. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSACTIVITYCONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSDISTRIBUTIONCHANNELS
  • 117. examples
  • 118. Goldcorpmininglow costs throughopen explorationCUSTOMERRELATIONSHIPSCUSTOMERSEGMENTSexploitingmines“geology prize”500’000 $USREVENUESTREAMSDISTRIBUTIONCHANNELSGoldcorp publicly shared all of its geological data andoffered US$ 500’000 in prizes for determining where theymight find the next 6 million ounces of goldresearch
  • 119. from copyright to creativecommons
  • 120. Skypefree VoIP & valueadded servicessoftwaredevelopmentwebsiteglobal(non segmented)deliver voice &video quality“eBay”large scalelow margininternetsoftwaredevelopmentfree voice-over-IP VoIP telephony &value-added services
  • 121. 1291 Cityhomeslow costaccommodationNew Yorklow costCUSTOMERRELATIONSHIPSthe costsensiblerenting outroomskeep downcostsapartmentownersrentsDISTRIBUTIONCHANNELSfind demandyoungcuriousSwisslow-cost hotel/rental in New York City
  • 122. Tecnovatelow-cost multi-lingual callcenteroutsourcinglow costCUSTOMERRELATIONSHIPSEuropeancorporationsACTIVITYCONFIGURATIONkeep downcosts“import” youngcuriousEuropeans toIndia to workREVENUESTREAMSDISTRIBUTIONCHANNELSbusiness process outsourcing “up-side down” in India
  • 123. Netflix(niche) moviesover theInternetCOSTSTRUCTUREprofilespecializedclienteleACTIVITYCONFIGURATIONlarge moviedatabaseindependentfilmsREVENUESTREAMSWebonline movie rental (with large niche movie database)
  • 124. from bloated head to the longtail
  • 125. Alexander Osterwalder, PhDalex@arvetica.comwww.arvetica.com
  • 126. all photos from Flickrunder a creative commons licenseauthors indicated in comment page of ppt
  • 127. we co-createNobody knows your business environment better thanyourself. We co-design your strategic vision by buildingon your knowledge. Through group thinking we find theright answers to the right questions togetherwe operationalizeHaving a great vision is not sufficient - implementationcounts. We help you reconcile long term views with shortterm actions. We make strategy everyones job bytranslating it into pragmatic and prioritized projects.we manage changeChange does not happen accidentally it has to bemanaged. We help you align strategy, people andprocesses with respect to your organizational culture andvalues.we build knowledgeWhen you stop learning, you stop competing. We scan theknowledge universe for you, across disciplines andindustries. We transfer the best methods, tools andtheory in business to your organization.we connectSpecific problems require specific skills that you do notnecessarily dispose of in-house. Through ourinterdisciplinary network we connect you with leadingdomain experts.
  • 128. annexes
  • 129. annex Ibusiness modeltemplate
  • 130. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPTARGETCUSTOMERDISTRIBUTIONCHANNELVALUECONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSINFRASTRUCTURE CUSTOMEROFFERFINANCEa business model describes the value an organization offers tovarious customers and portrays the capabilities and partnersrequired for creating, marketing, and delivering this value andrelationship capital with the goal of generating profitable andsustainable revenue streams
  • 131. VALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPTARGETCUSTOMERDISTRIBUTIONCHANNELVALUECONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSgives an overall view ofa companys bundle ofproducts and servicesportrays the network ofcooperativeagreements with othercompaniesdescribes the channelsto communicate andget in touch withcustomersdescribes thearrangement ofactivities and resourcesexplains therelationships acompany establisheswith its customerssums up the monetaryconsequences to run abusiness modeldescribes the revenuestreams through whichmoney is earneddescribes thecustomers a companywants to offer value tooutlines the capabilitiesrequired to run acompanys businessmodelINFRASTRUCTURE CUSTOMEROFFERFINANCEdescribing a company’s business model
  • 132. VALUEPROPOSITIONvalue proposition 1value proposition 2…OFFERdescribing a company’s offer
  • 133. VALUEPROPOSITIONTARGETCUSTOMERvalue proposition 1value proposition 2…target customer 1target customer 2…CUSTOMEROFFERdescribing who a company offers value to
  • 134. VALUEPROPOSITIONTARGETCUSTOMERDISTRIBUTIONCHANNELvalue proposition 1value proposition 2…distribution channel 1distribution channel 2…target customer 1target customer 2…CUSTOMEROFFERdescribing how a company reaches its customers
  • 135. VALUEPROPOSITIONTARGETCUSTOMERCUSTOMERRELATIONSHIPvalue proposition 1value proposition 2…relationship type 1relationship type 2…target customer 1target customer 2…CUSTOMEROFFERdescribing the relationships a company builds
  • 136. TARGETCUSTOMERREVENUESTREAMrevenue stream 1revenue stream 2…target customer 1target customer 2…FINANCEVALUEPROPOSITIONvalue proposition 1value proposition 2…OFFER CUSTOMERdescribing how a company makes money
  • 137. CORECAPABILITIESVALUEPROPOSITIONcore capability 1core capability 2…value proposition 1value proposition 2…OFFERINFRASTRUCTUREdescribing what capabilities are required
  • 138. describing what activities are requiredVALUEPROPOSITIONVALUECONFIGURATIONCORECAPABILITIESvalue proposition 1value proposition 2…core capability 1core capability 2…activity 1activity 2…INFRASTRUCTURE OFFER
  • 139. describing the partners that leverage the business modelVALUEPROPOSITIONPARTNERNETWORKCORECAPABILITIESvalue proposition 1value proposition 2…core capability 1core capability 2…partner 1partner 2…INFRASTRUCTURE OFFER
  • 140. VALUEPROPOSITIONCOSTSTRUCTUREcost account 1cost account 2…value proposition 1value proposition 2…FINANCEINFRASTRUCTURE OFFERdescribing the costs of a business modelCORECAPABILITIEScore capability 1core capability 2…
  • 141. annex iiother