Alar Kolk EIA Business ModelPresentation Transcript
Business Model Innovation… Alar Kolk President, European Innovation Academy
Grow Fast or Die
ARE YOUSOLVING THE RIGHTPROBLEM?Most firms are not and that undermines theirinnovation efforts…Indeed, when developing new products, processes, or even businesses, mostcompanies aren’t sufficiently rigorous in defining the problems they’re attemptingto solve and articulating why those issues are important. Without that rigor,organizations miss opportunities, waste resources, and end up pursuing innovationinitiatives that aren’t aligned with their strategies.“If I were given one hour to save the planet, I wouldspend 59 minutes defining the problem and oneminute resolving it,” Albert Einstein said.
Traditional Value Chain vs. Modern Value Chain
Who?Which new customer segments will emerge inthe next 5 years?YUPPIES Youg Urban ProfessionalsYUFFIES Young Urban FailuresMOBY/DOBY Mom/Dad Older – Baby YoungerWOOFS Well Off Older FolksSKIPPIES School Kids with Income + Purchaing PowerSANDWICHERS Adults caught between caring their children and their older parents
Customer & Idea Discovery
Customer Discovery, Phase One:State Your Business Model
Customer Discovery, Phase Two:"Get Out of the Building" to Test theProblem: "Do Customers Care?"Get your team "out of the building" to test the problem andto answer three key questions:•Do we really understand the customers problem?•Do enough people really care enough about the problemfor this to become a huge business?•And will they care enough to tell their friends?
Customer Discovery, Phase Three:"Get out of the Building" and Test theProduct/Service Solution
Value Valueproposition? proposition?
What are value propositons for the products?
Business Model Business Model Determines Value of the Product or Service. Business Model Innovation Transforms Technology into Money Business Model Functions: 1.Value Creation 2.Value Capture
Focus in Business Model A business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm. It is adescription of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams. Osterwalder, Pigneur and Tucci (2005)
how much did the coffee pricechange for Swiss householdsover the last couple of years?
Nespresso changed thebusiness model for coffee
The business model system PARTNERSHIP CAPABILITIES OFFER – VALUE CUSTOMER TARGETED NETWORK PROPOSITION RELATIONSHIPS CUSTOMER marketing offee SEGMENTS Nespresso c production machines club distribut Nespresso ion householdsmachine manufacturer KEY DISTRIBUTION RESOURCES CHANNELS patents espresso Nespres es so faciliti capsules stores business production retail outeets tl c pr c en r Nesall esso.com distribution channels COST STRUCTURE REVENUE MODEL retail logis machine marketing production tics capsule sales sales
35% growth p.a. for the last 7 consecutive years
fastest-growing business in the Nestlé group
Nespresso has a 26.6 %global share in Espresso machine sales