Business model Strategy Design Process

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This presentation was developed for the Australian Innovation Festival 2010. It is a model used in consulting activities where we support clients in the development and assessment of alternate business models. Consider using key assessment parameters.

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Business model Strategy Design Process

  1. 1. Innovate your business model<br />An Innovation Catalyst™ Seminar<br />Presented 06/05/10 at 10am<br />Prepared and Presented by <br />Marcus Tarrant<br />Managing Director<br />Mission HQ Pty. Ltd. ATF the Innovate Trust<br />Guest Presenter:<br />Simon Crean<br />Online Manager<br />Hallmark Cards<br />
  2. 2. Contact Details<br />Marcus Tarrant<br />Managing Director<br />Mission HQ Pty. Ltd. ATF the Innovate Trust<br />Marcus.tarrant@missionhq.com.au<br />+61 3 9005 9710<br />www.missionhq.com.au<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />2<br />
  3. 3. Copyright ©2010 Mission HQ. <br />The content, format, structure and communication technique utilised in this document are the intellectual property of Mission HQ Pty. Ltd.<br />This document is strictly classified as “Commercial in Confidence” and intended only for recipients expressly authorised by Mission HQ. Any modification or distribution under altered expression, by any means, in its entirety or in parts, to any person without written approval from Mission HQ is expressly prohibited. <br />Natural Persons or bodies corporate may not copy, retransmit, distribute, publish or otherwise transfer any copyrighted material to third parties or contractors without the express permission of Mission HQ.<br />This document is intended to reflect MISSION HQ’s high-level overview of the Business Model Design Framework. It does not constitute formal professional advice or a recommendation to potential licensors, tax advisors, inventors or other third parties as to a course of action in respect of the processes addressed, and should not be relied on as such. All care is taken in the preparation of this document but MISSION HQ bears no responsibility as to the contents of this document and disclaims any liability with respect to its use or misuse.<br />Intellectual Property & Disclaimer<br />
  4. 4. Seminar Agenda<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />4<br />
  5. 5. There are three kinds of companies, those that make new things happen, those that watch new things happen, and those that wonder what happened<br />Anonymous<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />5<br />
  6. 6. About Mission HQ Pty. Ltd.<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />6<br />Some recent past clients of Mission HQ and the team:<br />
  7. 7. So what can we use a business model for?<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />7<br />
  8. 8. We have used business model design to...<br />Underpin the business planning process<br />Provide an absolutely IDEAL starting point for the creation of a financial model.<br />Create a deeper understanding of you plans with collaborators, partners and suppliers<br />Provide a clear picture of a planned business to investors or internal stakeholders<br />Develop business cases for market entry<br />Optimise the value obtainable for a given business concept<br />Assist in evaluating alignment with organisational strategy<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />8<br />
  9. 9. Designing your business model<br />The business model matrix<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />9<br />
  10. 10. The 9 Element business model Matrix<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />10<br />
  11. 11. The business model matrix<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />11<br />Value Proposition – What are you offering? <br />Capabilities/Resources – What skills and capacity do you require?<br />Partnership – Who do you need to work with?<br />Activities – What will you do?<br />Costs – What are your significant costs likely to be?<br />Relationship – What formal and informal relationships are required<br />Channel – What are our channels to market?<br />Revenues – What will our customers pay for?<br />Customers – Who are our customers?<br />
  12. 12. A real world example.<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />12<br />
  13. 13. 1. The Value Proposition<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />13<br />
  14. 14. Defining the value proposition<br />-14-<br />Value can occur in any of the following elements<br />
  15. 15. Mapping out your value proposition<br />-15-<br />
  16. 16. -16-<br />Evaluation Process<br />Simplify a customer’s evaluation process<br />Example: ISELECT<br />
  17. 17. -17-<br />Value Co-Creation<br />Through various technological advances the integration and participation of the customer in the value creation process is increasingly possible. <br />Together with the knowledge and networks of customers additional value can be created and facilitated.<br />Examples: Ebay & Amazon<br />
  18. 18. -18-<br />Purchasing Process<br />Customers highly value an efficient, simple and convenient purchase process.Example: Creative Mobile Technologies back-seat swipe and entertainment for Taxi Cabs<br />
  19. 19. -19-<br />Set-Up/Installation<br />In some cases set-up or installation is necessary. The simplification of this process is of enormous value to the customer.<br />Example: Dick Smith: Mobile Techxphert Services<br />
  20. 20. -20-<br />Use/Operation<br />In many cases most of the value in a value proposition comes from the use or operation of an actual product or service. However, to differentiate themselves companies try to create value beyond a simple product or service.<br />Salesforceis carefully creating additional value by offering continuous updating "behind the scenes" and providing easy access to complementary products by third party vendors.<br />
  21. 21. -21-<br />Maintenance & aftersales support<br />Value is often created during the maintenance and after-sales phase. This can be either by offering high quality service or by offering a value proposition that minimizes the need for maintenance & after-sales.<br />Example: The attractiveness of salesforce.com’s value proposition essentially comes from the fact that the hosted software model (application service provider - ASP) minimizes the need of software maintenance by the customer.<br />
  22. 22. -22-<br />Ending and value transfer<br />In many cases once a customer does not need a product or service anymore he has to terminate the service or dispose of the product.Example: BMW Recycling Programme<br />
  23. 23. 2. Capabilities/Resources<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />23<br />
  24. 24. 2. Capabilities/Resources<br />What physical assets does our business model require?<br />Factory<br />Machinery<br />Etc.<br />Intellectual Assets<br />Trademarks (licensed or owned)<br />Patents<br />Processes<br />Systems<br />Human Resources<br />Skills<br />Team structures<br />Financial<br />Access to finanance<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />24<br />
  25. 25. 3. Partnerships<br />Describes the network of suppliers and partners that will make the business model work<br />Joint Ventures<br />Strategic Alliances<br />License agreements<br />Service agreements<br />Outsourcing arrangements<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />25<br />
  26. 26. 4. Activities<br />The activities outline the most important things that the organisation will do.<br />Production<br />Problem Solving<br />Platform management<br />License mangement<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />26<br />
  27. 27. 5. Costs<br />Outlines the primary areas of cost under the business model<br />Fixed Costs<br />Variable Costs<br />Economies of scale<br />Key cost rachet points<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />27<br />
  28. 28. 6. Relationships <br />What relationships other than partnerships may be required.<br />Particularly relevant in web 2.0 companies, where a customer has data vested with the company.<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />28<br />
  29. 29. 7. Channel<br />What channels to market with the model employ?<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />29<br />
  30. 30. 8. Revenue<br />What element of our value proposition will our customers actually pay for?<br />Asset Sales<br />Usage fees<br />Subscription<br />Advertising revenue<br />Renting or leasing<br />Licensing<br />Financing<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />30<br />
  31. 31. 9. Customers <br />The different groups of people or organisation that the organisation hopes to reach and serve.<br />Segmenting requires:<br />Distinct groups and value segments<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />31<br />
  32. 32. How can Mission HQ help?<br />Business Model Design Training<br />Facilitating business model design workshops<br />Evaluating alternative business models<br />Financial modelling and business planning for alternate business models<br />© Mission HQ Pty. Ltd. All Rights Reserved<br />32<br />

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