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Business Model
Innovation

Emmanuel Junio
M110059
Topics
I. Business Model (BM)
II. Business Model Innovation (BMI)
Business Model
Business Model describes the rationale
of how an organization creates, delivers,
and captures value (econom...
BM Canvas
Used to describe,
challenge, design, and
invent business models
more systematically
The BM canvas – a blank space

HOW?

WHAT?

HOW MUCH?

WHO?
9 Building Blocks of the BM
Internal

External
Client
segments

Key activities

Partner
network
Key
resources

Cost struct...
BM Block - Who?
Client
segments
Value
proposition

Client
relationships
Distribution
channels

Revenue streams
BM Block – How?
Key activities

Partner
network
Key
resources

Cost structure

Value
proposition
Business Model Framework
Client
segments

Key activities

Partner
network
Key
resources

Cost structure

Value
proposition...
Customer Segments

Describing who a company is offering a value to
Value Propositions

Describing a company’s offer
Channels

Describing how a company reaches its customers
Customer Relationships

Describing the relationships a company builds
Revenue Streams

Describing how a company makes money
Key Resources

Describing what capabilities are required
Key Activities

Describing what activities are required
Key Partners

The partners that leverage the business model
Cost Structure

Describing the cost of the business model
BM Framework - Illustrated
BM Canvas
BM Canvas
BM Canvas

http://www.businessmodelgeneration.com/canvas
BM Sample: Coca Cola
BM Sample: Financial Times

http://www.businessmodelgeneration.com/canvas
BM Sample: Techno Cake
BM Conclusion
NO Business Model = No Business at all!
Innovation
Innovation (from Latin “Innovare”)
is the application of better
solutions that meet new
requirements, inarticul...
Business Model Innovation
Business Model Innovation
The process of envisioning and
successfully implementing new
ways of doing anything that
creates...
Business Model Innovation
Have you ever wondered why
hyper successful companies
like Nokia or Kodak suddenly
lose their ed...
Business Model Innovation
How can firms like Comodore
computers, Nakamichi,
Newsweek, or Polaroid
possibly fail?
Business Model Innovation
Do they not have abundant
R&D resources, top employees
and profound knowledge of
their markets?
Business Model Innovation
But, they had another thing in
common, they all missed the
moment when they should
have left the...
Business Model Innovation
They missed out on radical
innovation because they were
too busy managing daily
business and ser...
Business Model Innovation
..instead of envisioning future
opportunities
Business Model Innovation
In other words, today's success
is the enemy of tomorrow's
success.
Business Model Innovation
The innovation cycle spins
faster than ever in nearly all
industries
Business Model Innovation
Innovation either increases the
customer value of a product or
service
Business Model Innovation
..or it lowers their cost
Business Model Innovation
.. and therefore creates a
competitive advantage
Business Model Innovation
Apple for example creates a
high perceived customer value
with its innovative new
products
Business Model Innovation
and Dell reduces its cost and
working capital through build
to order processes.
Business Model Innovation
Some misconceptions on
innovation..
Business Model Innovation
1. Innovation stems from an
idea that nobody has had
before
Business Model Innovation
2. Big success requires big
resources
Business Model Innovation
3. Innovation breakthroughs
are always based on fascinating
technologies
Business Model Innovation
Luckily they are all wrong!
Business Model Innovation
1. IBM did not invent the
personal computer,
Apple did not invent the MP3
technology,
Amazon did...
Business Model Innovation
2. Successful innovators learn
and recombine, as the
pioneers get eaten by the
wolves
Business Model Innovation
Cisco had virtually non-existent
R&D resources but out-innovated
the largest research lab in the...
Business Model Innovation
14 out of 25 most innovative
firms have innovated their
business model, and not just
their techn...
Business Model Innovation
..take firms such as google,
amazon or eBay..
Business Model Innovation
.. great algorithms, Yes.
Business Model Innovation
But it is the business model,
not just the technology that is
responsible for their success
Business Model Innovation
So, what exactly is a business
model innovation?
Business Model Innovation
A Business Model provides
answers to 4 questions..
Business Model Innovation
1. Who is your target
customer?
Business Model Innovation
2. What do you offer to the
customer?
Business Model Innovation
3. How do you create the value
proposition?
Business Model Innovation
4. And, how do you generate
revenue?
Business Model Innovation
And a Business Model
Innovation, changes at least 2
of these dimensions
Business Model Innovation
For the past 50 years,
companies, BMI have
revolutionized one or several
industries.
Business Model Innovation
For Instance, IKEA has
redefined how we buy
furniture.
Business Model Innovation
Tomtom has transformed the
navigation business.
Business Model Innovation
or Ebay has changed the world
of trade
Business Model Innovation
..yet only 10% of these BM
innovations were novel and
introduced NEW BM patterns
Business Model Innovation
.. the other 90%..
Business Model Innovation
..merely adapted, refined or
combined these patterns
Business Model Innovation
for instance, innovative
companies often apply creative
imitation
Business Model Innovation
they ask themselves, how can
a BM innovation from another
industry revolutionize our own
industr...
Business Model Innovation
..there are ~55 BM's that are
responsible for all BM
innovations..
Business Model Innovation
Examples are:
•
•
•
•
•
•

Flat Rate
Supermaket
Rent instead of buy
Experience Selling
E-commerc...
Business Model Innovation
“Razor and Blade”
..since 1904 Gillette has been giving
away razors to next to nothing
but selli...
Business Model Innovation
“Razor and Blade”
.. Nespresso creatively imitated this
pattern, selling cheap coffee
machines a...
Business Model Innovation
“Razor and Blade”
.. and many other companies apply
the razor and blade pattern too!
• Apple's i...
Business Model Innovation
Now, what do you have to do
to innovate your business
model?
Business Model Innovation
I advise you to follow 4 steps:
•
•
•
•

Initiation
Ideation
Integration
Implementation
Business Model Innovation
1. During initiation, you
analyze your current BM
Business Model Innovation
Again, you ask the questions:
• Who is your target customer?
• What do you offer to the
customer...
Business Model Innovation
2. During Ideation, you
confront this BM with the 55
BM innovation patterns and
develop new mode...
Business Model Innovation
how would Nespresso conduct
your business?
Business Model Innovation
is there a match between your
product and the experienced
selling pattern?
Business Model Innovation
challenge your basic
assumptions and the dominant
logic of your industry..
Business Model Innovation
but don't try to re-invent the
wheel, instead use analogies
and learn from other industries
Business Model Innovation
3. During Integration, you need
to check the consistency of the
BM
Business Model Innovation
..this is important detail work,
wherein you examine all 4
questions regarding
Organizational Fi...
Business Model Innovation
4. Finally, during
Implementation, it is time to
awaken the beast! But be
careful!
Business Model Innovation
In INNOVATIVE CYCLES:
1. You design a BM
2. Build a Pilot
3. Test the Pilot
and return to the
de...
Business Model Innovation
It is important to not
only gain Qualitative
and Quantitative data
Business Model Innovation
..to verify or falsify your
assumptions about your
new BM
Business Model Innovation
..but also not to forget
about the SOFT factors
of innovation
Business Model Innovation
.. thanks to incorrect
Management behavior
Business Model Innovation
.. and organizational
resistance more than
70% of all change
initiatives fail!
Business Model Innovation
Therefore, keep a few
rules in mind!
Business Model Innovation
First, only implement 1
BM at a time
Business Model Innovation
Second, clearly
communicate the BM
and the need for change
Business Model Innovation
Third, don't over
emphasize short term
KPIs (innovation needs
time)
Business Model Innovation
Fourth, get top
management commitment.
without their sponsorships
BM innovation is doomed
to fai...
Business Model Innovation
Finally, overcome the NOT
INVENTED here syndrome
Business Model Innovation
Let's wrap it up then!
Business Model Innovation
Innovation is the key factor..
Business Model Innovation
to defeat path dependency..
Business Model Innovation
and stay competitive in today's economy..
Business Model Innovation
yet, innovation is not necessarily about new technologies,
excessive R&D, or about creating comp...
Business Model Innovation
most of the time, innovation is learning from others..
Business Model Innovation
or re-inventing your BM, not just your technology..
Business Model Innovation
this can be done in a structured process of..
Business Model Innovation
Initiation..
Business Model Innovation
Ideation..
Business Model Innovation
Integration..
Business Model Innovation
and Implementation..
Business Model Innovation
•
•
•
•
•

you analyze your BM
apply the 55 BM innovation patterns
check for inconsistencies and...
Business Model Innovation
Are you ready then to revolutionize your own industry?
Business Model Innovation
Try to creatively learn from the Giants who shoulders your
standing on
Business Model Innovation
Think BIG, and think DIFFERENT!
Business Model Innovation
Steve Jobs did it, so why can't you!?
References
BusinessModelsInc.com
BMI, Prof. Dr. Oliver Gassman
http://www.item.unisg.ch/en/Chairs/Innovation+Mgmt/Research...
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Transcript of "SPENTREP - Business Model Innovation (reported by Emmanuel Junio)"

  1. 1. Business Model Innovation Emmanuel Junio M110059
  2. 2. Topics I. Business Model (BM) II. Business Model Innovation (BMI)
  3. 3. Business Model Business Model describes the rationale of how an organization creates, delivers, and captures value (economic, social, cultural, or other forms of value). A set of interconnected activities and processes designed to deliver a proposition to the customers. Note: The process of business model construction is part of business strategy.
  4. 4. BM Canvas Used to describe, challenge, design, and invent business models more systematically
  5. 5. The BM canvas – a blank space HOW? WHAT? HOW MUCH? WHO?
  6. 6. 9 Building Blocks of the BM Internal External Client segments Key activities Partner network Key resources Cost structure Design Value proposition Client relationships Distribution channels Revenue streams Insight
  7. 7. BM Block - Who? Client segments Value proposition Client relationships Distribution channels Revenue streams
  8. 8. BM Block – How? Key activities Partner network Key resources Cost structure Value proposition
  9. 9. Business Model Framework Client segments Key activities Partner network Key resources Cost structure Value proposition Client relationships Distribution channels Revenue streams
  10. 10. Customer Segments Describing who a company is offering a value to
  11. 11. Value Propositions Describing a company’s offer
  12. 12. Channels Describing how a company reaches its customers
  13. 13. Customer Relationships Describing the relationships a company builds
  14. 14. Revenue Streams Describing how a company makes money
  15. 15. Key Resources Describing what capabilities are required
  16. 16. Key Activities Describing what activities are required
  17. 17. Key Partners The partners that leverage the business model
  18. 18. Cost Structure Describing the cost of the business model
  19. 19. BM Framework - Illustrated
  20. 20. BM Canvas
  21. 21. BM Canvas
  22. 22. BM Canvas http://www.businessmodelgeneration.com/canvas
  23. 23. BM Sample: Coca Cola
  24. 24. BM Sample: Financial Times http://www.businessmodelgeneration.com/canvas
  25. 25. BM Sample: Techno Cake
  26. 26. BM Conclusion NO Business Model = No Business at all!
  27. 27. Innovation Innovation (from Latin “Innovare”) is the application of better solutions that meet new requirements, inarticulated needs, or existing market needs. This is accomplished through more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society.
  28. 28. Business Model Innovation
  29. 29. Business Model Innovation The process of envisioning and successfully implementing new ways of doing anything that creates value for an enterprise and it’s customers.
  30. 30. Business Model Innovation Have you ever wondered why hyper successful companies like Nokia or Kodak suddenly lose their edge?
  31. 31. Business Model Innovation How can firms like Comodore computers, Nakamichi, Newsweek, or Polaroid possibly fail?
  32. 32. Business Model Innovation Do they not have abundant R&D resources, top employees and profound knowledge of their markets?
  33. 33. Business Model Innovation But, they had another thing in common, they all missed the moment when they should have left their successful path to rethink their business model.
  34. 34. Business Model Innovation They missed out on radical innovation because they were too busy managing daily business and serving current clients
  35. 35. Business Model Innovation ..instead of envisioning future opportunities
  36. 36. Business Model Innovation In other words, today's success is the enemy of tomorrow's success.
  37. 37. Business Model Innovation The innovation cycle spins faster than ever in nearly all industries
  38. 38. Business Model Innovation Innovation either increases the customer value of a product or service
  39. 39. Business Model Innovation ..or it lowers their cost
  40. 40. Business Model Innovation .. and therefore creates a competitive advantage
  41. 41. Business Model Innovation Apple for example creates a high perceived customer value with its innovative new products
  42. 42. Business Model Innovation and Dell reduces its cost and working capital through build to order processes.
  43. 43. Business Model Innovation Some misconceptions on innovation..
  44. 44. Business Model Innovation 1. Innovation stems from an idea that nobody has had before
  45. 45. Business Model Innovation 2. Big success requires big resources
  46. 46. Business Model Innovation 3. Innovation breakthroughs are always based on fascinating technologies
  47. 47. Business Model Innovation Luckily they are all wrong!
  48. 48. Business Model Innovation 1. IBM did not invent the personal computer, Apple did not invent the MP3 technology, Amazon did not invent the online bookstore
  49. 49. Business Model Innovation 2. Successful innovators learn and recombine, as the pioneers get eaten by the wolves
  50. 50. Business Model Innovation Cisco had virtually non-existent R&D resources but out-innovated the largest research lab in the world, AT&T's Bell labs
  51. 51. Business Model Innovation 14 out of 25 most innovative firms have innovated their business model, and not just their technology
  52. 52. Business Model Innovation ..take firms such as google, amazon or eBay..
  53. 53. Business Model Innovation .. great algorithms, Yes.
  54. 54. Business Model Innovation But it is the business model, not just the technology that is responsible for their success
  55. 55. Business Model Innovation So, what exactly is a business model innovation?
  56. 56. Business Model Innovation A Business Model provides answers to 4 questions..
  57. 57. Business Model Innovation 1. Who is your target customer?
  58. 58. Business Model Innovation 2. What do you offer to the customer?
  59. 59. Business Model Innovation 3. How do you create the value proposition?
  60. 60. Business Model Innovation 4. And, how do you generate revenue?
  61. 61. Business Model Innovation And a Business Model Innovation, changes at least 2 of these dimensions
  62. 62. Business Model Innovation For the past 50 years, companies, BMI have revolutionized one or several industries.
  63. 63. Business Model Innovation For Instance, IKEA has redefined how we buy furniture.
  64. 64. Business Model Innovation Tomtom has transformed the navigation business.
  65. 65. Business Model Innovation or Ebay has changed the world of trade
  66. 66. Business Model Innovation ..yet only 10% of these BM innovations were novel and introduced NEW BM patterns
  67. 67. Business Model Innovation .. the other 90%..
  68. 68. Business Model Innovation ..merely adapted, refined or combined these patterns
  69. 69. Business Model Innovation for instance, innovative companies often apply creative imitation
  70. 70. Business Model Innovation they ask themselves, how can a BM innovation from another industry revolutionize our own industry?
  71. 71. Business Model Innovation ..there are ~55 BM's that are responsible for all BM innovations..
  72. 72. Business Model Innovation Examples are: • • • • • • Flat Rate Supermaket Rent instead of buy Experience Selling E-commerce Razor and Blade pattern
  73. 73. Business Model Innovation “Razor and Blade” ..since 1904 Gillette has been giving away razors to next to nothing but selling its blades to exceedingly high prices..
  74. 74. Business Model Innovation “Razor and Blade” .. Nespresso creatively imitated this pattern, selling cheap coffee machines and expensive coffee and revolutionized the coffee industry
  75. 75. Business Model Innovation “Razor and Blade” .. and many other companies apply the razor and blade pattern too! • Apple's i-Tunes • Amazon's kindle or • HP's inkjet printers
  76. 76. Business Model Innovation Now, what do you have to do to innovate your business model?
  77. 77. Business Model Innovation I advise you to follow 4 steps: • • • • Initiation Ideation Integration Implementation
  78. 78. Business Model Innovation 1. During initiation, you analyze your current BM
  79. 79. Business Model Innovation Again, you ask the questions: • Who is your target customer? • What do you offer to the customer? • How do you create the value proposition? • And, how do you generate revenue?
  80. 80. Business Model Innovation 2. During Ideation, you confront this BM with the 55 BM innovation patterns and develop new models
  81. 81. Business Model Innovation how would Nespresso conduct your business?
  82. 82. Business Model Innovation is there a match between your product and the experienced selling pattern?
  83. 83. Business Model Innovation challenge your basic assumptions and the dominant logic of your industry..
  84. 84. Business Model Innovation but don't try to re-invent the wheel, instead use analogies and learn from other industries
  85. 85. Business Model Innovation 3. During Integration, you need to check the consistency of the BM
  86. 86. Business Model Innovation ..this is important detail work, wherein you examine all 4 questions regarding Organizational Fit
  87. 87. Business Model Innovation 4. Finally, during Implementation, it is time to awaken the beast! But be careful!
  88. 88. Business Model Innovation In INNOVATIVE CYCLES: 1. You design a BM 2. Build a Pilot 3. Test the Pilot and return to the design phase
  89. 89. Business Model Innovation It is important to not only gain Qualitative and Quantitative data
  90. 90. Business Model Innovation ..to verify or falsify your assumptions about your new BM
  91. 91. Business Model Innovation ..but also not to forget about the SOFT factors of innovation
  92. 92. Business Model Innovation .. thanks to incorrect Management behavior
  93. 93. Business Model Innovation .. and organizational resistance more than 70% of all change initiatives fail!
  94. 94. Business Model Innovation Therefore, keep a few rules in mind!
  95. 95. Business Model Innovation First, only implement 1 BM at a time
  96. 96. Business Model Innovation Second, clearly communicate the BM and the need for change
  97. 97. Business Model Innovation Third, don't over emphasize short term KPIs (innovation needs time)
  98. 98. Business Model Innovation Fourth, get top management commitment. without their sponsorships BM innovation is doomed to fail
  99. 99. Business Model Innovation Finally, overcome the NOT INVENTED here syndrome
  100. 100. Business Model Innovation Let's wrap it up then!
  101. 101. Business Model Innovation Innovation is the key factor..
  102. 102. Business Model Innovation to defeat path dependency..
  103. 103. Business Model Innovation and stay competitive in today's economy..
  104. 104. Business Model Innovation yet, innovation is not necessarily about new technologies, excessive R&D, or about creating completely new ideas..
  105. 105. Business Model Innovation most of the time, innovation is learning from others..
  106. 106. Business Model Innovation or re-inventing your BM, not just your technology..
  107. 107. Business Model Innovation this can be done in a structured process of..
  108. 108. Business Model Innovation Initiation..
  109. 109. Business Model Innovation Ideation..
  110. 110. Business Model Innovation Integration..
  111. 111. Business Model Innovation and Implementation..
  112. 112. Business Model Innovation • • • • • you analyze your BM apply the 55 BM innovation patterns check for inconsistencies and start implementing carefully keeping in mind success factors and pitfalls
  113. 113. Business Model Innovation Are you ready then to revolutionize your own industry?
  114. 114. Business Model Innovation Try to creatively learn from the Giants who shoulders your standing on
  115. 115. Business Model Innovation Think BIG, and think DIFFERENT!
  116. 116. Business Model Innovation Steve Jobs did it, so why can't you!?
  117. 117. References BusinessModelsInc.com BMI, Prof. Dr. Oliver Gassman http://www.item.unisg.ch/en/Chairs/Innovation+Mgmt/Research/Business+Model+Innovation http://www.im.ethz.ch/education/HS13/MIS13/VL_BMI___IT_012efl.pdf http://www.wu.ac.at/wutv/other/elgar_fleisch.pdf BusinessModelGeneration.com Wikipedia, Google, WWW..
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