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Business model design and innovation

Business model design and innovation

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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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  • 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.
  • http://creativecommons.org/about/licenses
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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."
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Business model-design-and-innovation-for-competitive-advantage-19352 Business model-design-and-innovation-for-competitive-advantage-19352 Presentation Transcript

  • Management2.0: Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD [email_address]
  • change is the process by which the future invades our lives -> Alvin Toffler
  • first of all: what are YOUR concerns? (buzz groups)
  • what are YOUR biggest issues and fears you face in strategic management today?
  • where do YOU see the largest opportunities to improve strategic management today?
  • your expectations for today?
  • what is innovation?
  • tell me about the most important innovations in your company
  • types of innovation?
  • technology innovation
  • process innovation
  • product & service innovation
  • business model innovation
  • four rings of innovation business model innovation product & service innovation process innovation technology innovation
  • which one of your examples 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: Fractional Ownership
  • Zopa.com: Peer-to-Peer lending
  • Bellum Concepts
  • why talk about business models?
  • how do you describe a business model?
  • without a common language
  • how do you communicate a business model?
    • 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.
    • 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 libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat.
    Strategy Lorem 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 felis pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec diam. 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 faucibus vulputate. 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 vestibulum condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae purus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque. Words Text Text Text 18% 300% 12% 1% through inappropriate means
  • Here CEOs 10° Managers 60° Here Staff 360° Ok
  • how do you implement a business model?
  • with outdated methods
  • how do you measure the success of a business model?
  • we don’t
  • how do you change a business model and innovate ?
  • we re-invent the wheel
  • what is a business model?
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURE CUSTOMER OFFER FINANCE 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 DISTRIBUTION CHANNELS [Osterwalder (2004) The Business Model Ontology] business model framework
  • case study
  • you become the new owner of a soccer club …
  • describe YOUR club’s business model
  • describing how a wealth management bank acquires its clients what value proposition do you offer, to which customer segments ?
  • VALUE PROPOSITION CUSTOMER SEGMENTS value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMER OFFER what value proposition do you offer, to which customer segments? (model)
  • what value proposition do you offer, to which customer segments? (example) spectacular offensive football fans CUSTOMER OFFER advertising space & high visibility advertisers … …
  •  
  • how do you reach your customers ?
  • VALUE PROPOSITION COMMUNICATION & DISTRIBUTION CHANNELS value proposition 1 value proposition 2 … channel 1 channel 2 … OFFER how do you reach your customers? (model) CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER
  • spectacular offensive football stadium & box office CUSTOMER OFFER how do you reach your customers? (example) club owned TV channel fans mobile phone TV advertising space & high visibility sales force advertisers
  • how do you build relationships?
  • VALUE PROPOSITION CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … mechanism 1 mechanism 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER how do you build relationships with your customers? (model)
  • spectacular offensive football personalized website (ticketing) CUSTOMER OFFER team blog (RSS) fans … how do you build relationships with your customers? (example)
  • how do you earn your money with this business model?
  • VALUE PROPOSITION REVENUE STREAMS value proposition 1 value proposition 2 … revenue stream 1 revenue stream 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … FINANCE how do you earn your money with this business model? (model)
  • spectacular offensive football ticket sales FINANCE OFFER TV channel subscriber fees fans mobile phone TV subscriber fees advertising space & high visibility advertising revenues advertisers how do you earn your money with this business model? (example)
  • the business models place in a company
  • the business model’s place in the company BUSINESS MODEL ORGANIZATION STRATEGY TECHNOLOGY
  • external forces
  • 5 forces BUSINESS MODEL legal environment social environment competition customer needs technological change
  • the big picture (business model)
    • team management
    • event management
    • venue management
    • ticketing
    • VIP relationship management
    • video crew
    • attractive soccer
    • 360 º 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 & win games
    • 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 Customer Customer Relationship Partner Network Activity Configuration Core Capability Cost Structure Revenue Model the big picture
    • team management
    • event management
    • venue management
    • ticketing
    • VIP relationship management
    • video crew
    • attractive soccer
    • 360 º 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 & win games
    • 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 Customer Customer Relationship Partner Network Activity Configuration Core Capability Cost Structure Revenue Model value creates revenues
    • team management
    • event management
    • venue management
    • ticketing
    • VIP relationship management
    • video crew
    • attractive soccer
    • 360 º 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 & win games
    • 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 Customer Customer Relationship Partner Network Activity Configuration Core Capability Cost Structure Revenue Model creating value requires infrastructure
    • team management
    • event management
    • venue management
    • ticketing
    • VIP relationship management
    • video crew
    • attractive soccer
    • 360 º 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 & win games
    • 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 Customer Customer Relationship Partner Network Activity Configuration Core Capability Cost Structure Revenue Model infrastructure generates costs
    • team management
    • event management
    • venue management
    • ticketing
    • VIP relationship management
    • video crew
    • attractive soccer
    • 360 º 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 & win games
    • 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 Customer Customer Relationship Partner Network Activity Configuration Core Capability Cost Structure Revenue Model the profit zone <
  • the process of designing innovative business models
  • the focus of the business model innovator & designer
  • user-centered
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • Nokia: Jan Chipchase
  • creativity & exploration
  • Googleplex
  • 70:20: 10
  • API
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • continuous innovation
  • interdisciplinary approach
  • Grameen Phone Bangladesh
  • village telephony telecom infrastructure customer relationships villager activity configuration micro-credit Grameen Bank mobile phone revenues source of revenue mobile telephony billing telecom operators Grameen Bank (billing) phone ladies phone ladies
  • holistic design
  • Apple iTunes & iPod
  • iPod cost structure lifestyle brand “ high-end” consumer prod. & softw. design hardware & softw. dev. hardware revenues iTunes multimedia downloads e-commerce multimedia rights mgmt iBook content producers Apple stores dealer network multimedia revenues hardware suppliers brand management hardware distribution content distribution content
  • strategic fit
  • the Amazon.com you know
  • Amazon Simple Storage Services (S3)
  • selling stuff on the Web IT infra customer relationships mass customer data services Amazon.com data grid partners selling stuff Amazon S3 Amazon.com Internet API Web2.0 companies warehousing & distribution distribution content management product selection A9 product search data storage fees product search search engine revenues e-commerce sites Internet marketing
  • the business modeler’s toolbox
  • co-creation
  • ideation
  • visualization
  • prototyping
  • the design process
  • 1. identify interdisciplinary stakeholders -> set-up team
  • do you have to get the IT team out of their cubicles?
  • 2. understand (business) environment –> frame problem
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS [Osterwalder (2004) The Business Model Ontology] various starting points / depending on context
  • 3. suspend reality -> ideate
  • 4. bring back reality -> prototype
  • 5. chose suitable design -> decide
  • 6. sketch out projects & workload -> draw implementation plan
  • … 38 man/days Project C1 Distribution Channels 120 man/days Project V2 10 man/days Project V1 Value Proposition Estimated workload Project name Area
  • 7. outline key indicators to follow -> choose measures
  • … 38 man/days Project C1 Distribution Channels 120 man/days Project V2 10 man/days Project V1 Value Proposition Target level KPI (measure) Estimated workload Project name Area
  • 8. select the right teams and people -> make responsible
  • … 38 man/days Project C1 Distribution Channels Ms. Tee 120 man/days Project V2 Mr. Jan 10 man/days Project V1 Value Proposition leader Target level KPI (measure) Estimated workload Project name Area
  • 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
    • compete in existing markets
    • beat the competition
    • explore existing demand
    • make the value/cost trad-off
    • align with differentiation OR low cost
    • create uncontested markets
    • make competition irrelevant
    • create & capture new demand
    • break value/cost trad-off
    • align with differentiation AND low cost
    RED OCEAN BLUE OCEAN
  • differentiate your value proposition
    • a customer value proposition gives an overall view of a company's 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)
    working definition value proposition
  • what are the 5 most important competitive attributes that characterize a game console’s offer? (e.g. price, performance, design) attribute 2 e.g. price attribute 1 e.g. performance group warm-up
  • 1 2 3 4 - -
    • most important attribute
    • second most important
    5 attributes
  •  
  • attribute 1 attribute 2 attribute 3 attribute 5 1 - low 5 - high 3 - medium bank’s performance [Kim & Mauborgne (2002) Charting Your Company's Future] draw a value proposition attribute 4
  • live Excel
  •  
  • eliminate raise reduce create
  •  
  •  
  • strong & valuable approach, but limited view
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • examples
  • Goldcorp mining low costs through open exploration CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS exploiting mines “ geology prize” 500’000 $US REVENUE STREAMS DISTRIBUTION CHANNELS Goldcorp publicly shared all of its geological data and offered US$ 500’000 in prizes for determining where they might find the next 6 million ounces of gold research
  •  
  • from copyright to creative commons
  • Skype free VoIP & value added services software development website global (non segmented) deliver voice & video quality “ eBay” large scale low margin internet software development free voice-over-IP VoIP telephony & value-added services
  • 1291 Cityhomes low cost accommodation New York low cost CUSTOMER RELATIONSHIPS the cost sensible renting out rooms keep down costs apartment owners rents DISTRIBUTION CHANNELS find demand young curious Swiss low-cost hotel/rental in New York City
  • Tecnovate low-cost multi-lingual call center outsourcing low cost CUSTOMER RELATIONSHIPS European corporations ACTIVITY CONFIGURATION keep down costs “ import” young curious Europeans to India to work REVENUE STREAMS DISTRIBUTION CHANNELS business process outsourcing “up-side down” in India
  • Netflix (niche) movies over the Internet COST STRUCTURE profile specialized clientele ACTIVITY CONFIGURATION large movie database independent films REVENUE STREAMS Web online movie rental (with large niche movie database)
  • from bloated head to the long tail
  • sodi platforms VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • NetJets VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • house for all seasons VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • WISE VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  • Blyk VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  •  
  • myfootballclub VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS DISTRIBUTION CHANNELS
  •  
  • Alexander Osterwalder, PhD [email_address] www.arvetica.com
  • all photos from Flickr under a creative commons license authors indicated in comment page of ppt
  • When you stop learning, you stop competing. We scan the knowledge universe for you, across disciplines and industries. We transfer the best methods, tools and theory in business to your organization. we build knowledge Change does not happen accidentally it has to be managed. We help you align strategy, people and processes with respect to your organizational culture and values. we manage change Specific problems require specific skills that you do not necessarily dispose of in-house. Through our interdisciplinary network we connect you with leading domain experts. we connect Having a great vision is not sufficient - implementation counts. We help you reconcile long term views with short term actions. We make strategy everyone's job by translating it into pragmatic and prioritized projects. we operationalize Nobody knows your business environment better than yourself. We co-design your strategic vision by building on your knowledge. Through group thinking we find the right answers to the right questions together we co-create
  • annexes
  • annex I business model template
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURE CUSTOMER OFFER FINANCE 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
  • VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS gives an overall view of a company's bundle of products and services portrays the network of cooperative agreements with other companies describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources explains the relationships a company establishes with its customers sums up the monetary consequences to run a business model describes the revenue streams through which money is earned describes the customers a company wants to offer value to outlines the capabilities required to run a company's business model INFRASTRUCTURE CUSTOMER OFFER FINANCE describing a company’s business model
  • VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER describing a company’s offer
  • VALUE PROPOSITION TARGET CUSTOMER value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing who a company offers value to
  • VALUE PROPOSITION TARGET CUSTOMER DISTRIBUTION CHANNEL value proposition 1 value proposition 2 … distribution channel 1 distribution channel 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing how a company reaches its customers
  • VALUE PROPOSITION TARGET CUSTOMER CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … relationship type 1 relationship type 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing the relationships a company builds
  • TARGET CUSTOMER REVENUE STREAM revenue stream 1 revenue stream 2 … target customer 1 target customer 2 … FINANCE VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER CUSTOMER describing how a company makes money
  • CORE CAPABILITIES VALUE PROPOSITION core capability 1 core capability 2 … value proposition 1 value proposition 2 … OFFER INFRASTRUCTURE describing what capabilities are required
  • describing what activities are required VALUE PROPOSITION VALUE CONFIGURATION CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … activity 1 activity 2 … INFRASTRUCTURE OFFER
  • describing the partners that leverage the business model VALUE PROPOSITION PARTNER NETWORK CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … partner 1 partner 2 … INFRASTRUCTURE OFFER
  • VALUE PROPOSITION COST STRUCTURE cost account 1 cost account 2 … value proposition 1 value proposition 2 … FINANCE INFRASTRUCTURE OFFER describing the costs of a business model CORE CAPABILITIES core capability 1 core capability 2 …
  • annex ii other
  •