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“!The competition of the  future is between business  models not just products or  solutions.”!            6 Thesis on the...
“How can you dare to buy pet food at Aldi? !!I buy my personal grocery at Aldi, but never for my dog.”!                   ...
Agenda!!  The economics of the pet food industry!!  Shift happens!    !  Innovation in Pets Industry!    !  More choice is...
A word of warning!I’m not a pet industry expert.I am an expert for theprocess of re-thinking andre-inventing businessmodel...
My childhood pets !   Dr. Patrick Stähler!                      !  Partner @fluidminds – the                         busine...
Humanization inmarketing atthe extreme
Your customers !   Your consumers !(they pay)!        (they eat and use)!
Your customers!                Your consumers!    !  Marketing &                  !  extreme high variety       communicat...
fThe application o                  ingconsumer market                   ionwas a big innovatsome years ago.              ...
The humanization                                                                 of pet                                   ...
Large pet food firms are !Masters of branding &                                1!channel management!not of customer experie...
but…!Shift!happens…!
Disruptive Innovation in the pet industry came  from the retail side!!  The pets industry is following other industries wh...
Business Model Innovation so far:!Disruptive innovation in                                     2!the pet industry camefrom...
Getting the right balance of nutrients is notentirely simple and depends on a seeminglyendless amount of variables such as...
The tyranny of choice!Consumers find too manyoptions troubling because of the “risk ofmisperception and miscalculation, of ...
Distributionas thebottle neck!
Customer Insight to build upon!Consumer want !                                  3!the right choice!not more choice!
theAnother challenge:                      ofecological footprintpets
otDon‘t w orry! We do n                 . Wefo llow the hype                   scov  er the basic
Electrification at        We can learn from other the end of the 19th       general purpose century                   tech...
It took 40 years betweenthe of diffusion of electricityand …!         At the beginning, steam         engines were replace...
... and new processes and businessmodels that were based onelectricity like the assembly line!    It much easier to    dis...
Tradition is not a business model!The Internet will spark                                     4!business modelinnovations ...
The internet isnot facebook!The Internet isnot Twitter.!
Failed business models                                                    due to lack of                                  ...
More failure                             The Internet is not just                             another distribution        ...
New Media are!1.  active (can act by themselves)!2.  ubiqutious (space & time)3.  interactiv (human can interact with and ...
Tradition is not a business model!The Internet has very                                     5!special idiosyncrasies.Build...
technology!                               X!                       value / utility!                                       ...
To develop a business model, is   "To Do the "right things "And   Not to do things right!
„What is a  business  model?“!
Are you                            aware o                                    f                            your DN        ...
The business model givesmeaning to your employeesand customers!
4 key questions for a successful business:       What                How do we            How do we       Who is on       ...
4 key questions for a successful business:       What                How do we            How do we       Who is on       ...
4 key questions for a successful business:       What                How do we            How do we       Who is on       ...
4 key questions for a successful business:       What                How do we            How do we       Who is on       ...
„ What industry are !  we in? Who are  our competitors?!                  “   !
„ In which industry !  are we in?!            “!
„That was the job                             !                             the customer                             wante...
Value Proposition  Customers  Who are our customers?  What job do we solve for our  customers?  Customer Benefit  What bene...
Value ArchitectureO er                                 Distribution & CommunicationWhat is our o er?                    Ch...
Revenue Model Cost Structure                    Revenue Sources Cost structure is defined by the   With what do we earn mon...
Team & Values  Team                           Values  Who is on our team?            What values do we pursue?  What compe...
Questions for successful Business Model Innovation      Value Architecture                                                ...
Questions for successful Business Model Innovation      Value Architecture                                                ...
If you are in a market forgiants...!
.. and you play with theirrules you will getnowhere…!
„…but if you can create your own rules of engagement than you can compete even in a market for giants. “!
Innovation is all about beingdifferent!
But if everybody is doing hesame, you have to findsomething else!
Path to business model innovationLead, don’t follow. Break                                    6!rules. Create markets.Thro...
If you want to find a disruptive businessmodel innovation you just have tofollow the prescription to the right.""Your succe...
Sorry, life is not a fairy tale."You can find sustaining innovation witha structured process, but not disruptivebusiness mo...
Your Head!THE greatest working tool "
Creating Business modelinnovations is a creative andanalytical process "There is a reason why god gave ustwo brain hemisph...
The fluidminds Way to Business Model Innovation           1                                                                ...
What is a good strategy?!                                    trend!                                                    dif...
It’s about finding the righttrend to surf! !
„Business model innovation is about being!!DIFFERENT!“!
NO,   REALLY            !               DIFFERENT!
Dr. Patrick Stähler | 63!
DOING!not learning to do,!is the essence of   !entrepreneurship!                       Guy Kawasaki, The Art of the Start ...
„Scary to be this nail. Wherewill the hammer hit nexttime?“!
More information http://blog.business-model-innovation.comDr. oec. Patrick Stähler!fluidminds GmbH!Seefeldstrasse 5a!CH-800...
Rethinking the pets industry - a revolution in the coming
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Rethinking the pets industry - a revolution in the coming

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Pets are great companion for humans. Therefore the market for pet food and accessories is a very special market. The current industry structure is driven by innovation in the channels, but the internet will allow new and fresh business models.
The slides are from a presentation I held at the annual PETS INTERNATIONAL conference, Berlin January 26-27, 2012

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Transcript of "Rethinking the pets industry - a revolution in the coming"

  1. 1. “!The competition of the future is between business models not just products or solutions.”! 6 Thesis on the Pets Industry! by Dr. Patrick Stähler! fluidminds GmbH, Zürich!!
  2. 2. “How can you dare to buy pet food at Aldi? !!I buy my personal grocery at Aldi, but never for my dog.”! ! Quote from a dog owner to a friend of mine who buys his dog food at Aldi!
  3. 3. Agenda!!  The economics of the pet food industry!!  Shift happens! !  Innovation in Pets Industry! !  More choice is not better!!  The Internet is more than a channel!!  Reinventing your industry. That is your job!!!
  4. 4. A word of warning!I’m not a pet industry expert.I am an expert for theprocess of re-thinking andre-inventing businessmodels!!
  5. 5. My childhood pets ! Dr. Patrick Stähler! !  Partner @fluidminds – the business innovators, Zurich! !  Expert on Business Model Design & Innovation! !  Passion for customer experience & authenticity ! !  Passionate mystery shopper! !  Managing Director of Internet Firm Experteer (90 FTEs)! !  2 pets in my lifetime (Hannibal, turtle and Arpat, dog )! !  First website 1996, digerati ever since!
  6. 6. Humanization inmarketing atthe extreme
  7. 7. Your customers ! Your consumers !(they pay)! (they eat and use)!
  8. 8. Your customers! Your consumers! !  Marketing & !  extreme high variety communication of breeds/sizes and aimed at needs of therefore of needs! the human being! Offer! !  Humanization of pet !  life stage products! food and pet !  therapy food for accessories ! better joints food or !  Highly emotional! for weight reduction! !  Ideologies regarding !  special food for all what pets need breeds! (BARF, Vegan, no preservatives, etc.)! Complex market with two different stakeholders with different needs
  9. 9. fThe application o ingconsumer market ionwas a big innovatsome years ago. !  4 pet food manufacturers control 80% of the market*! Procter & !  Originally, they are all fast-moving Gamble, consumer goods companies that Nestlé, Mars, have transferred their skills to the and Colgate- pet food market! Palmolive! !  logic consequence: humanization! *Source: Wikipedia!
  10. 10. The humanization of pet food is the logic st ep. That is the core b usiness of FMCG companie sThe market leaders are champions!!  to deal with big retailers like " Carrefour, Metro, Tesco, Aldi or Rewe!!  to build brands like Frolic, Royal Carnin!!  to attract customers to retailers by traditional advertising!But they are still mass production firmsthat have no direct contact to their endcustomers or end consumers (the pets).They know almost nothing about the individualconsumer (pet)! *Source: Wikipedia!
  11. 11. Large pet food firms are !Masters of branding & 1!channel management!not of customer experience orproduction economics
  12. 12. but…!Shift!happens…!
  13. 13. Disruptive Innovation in the pet industry came from the retail side!!  The pets industry is following other industries where category killers like Toys “R” US, Home Depot, Media Markt, Globetrotter or Ikea revolutionized their industries!!  Fressnapf or Qualipet are disruptive innovators or category killers in the pets industry!!  Due to strong retailers, trade and private label pet food is doing well not only at Fressnapf & Co but also at Aldi and other discounters!!  Private label became brands in their own rights!
  14. 14. Business Model Innovation so far:!Disruptive innovation in 2!the pet industry camefrom the channels!and more will come due to theInternet
  15. 15. Getting the right balance of nutrients is notentirely simple and depends on a seeminglyendless amount of variables such as breed,activity level, age and medical condition.*!! Why is the pet food g industry not providin ? this individual food *Source: http://www.k9magazine.com/life-stage-dog-food/ #ixzz1ic35kWAS!
  16. 16. The tyranny of choice!Consumers find too manyoptions troubling because of the “risk ofmisperception and miscalculation, of misunderstanding the availablealternatives, of misreading one’s own tastes, of yielding to amoment’s whim and regretting it afterwards”, combined with “thestress of information acquisition”*! *Source: Daniel McFadden, The Economist, The tyranny of choice, Dec 16th, 2010!
  17. 17. Distributionas thebottle neck!
  18. 18. Customer Insight to build upon!Consumer want ! 3!the right choice!not more choice!
  19. 19. theAnother challenge: ofecological footprintpets
  20. 20. otDon‘t w orry! We do n . Wefo llow the hype scov er the basic
  21. 21. Electrification at We can learn from other the end of the 19th general purpose century technologies like electricity!Dr. Patrick Stähler | 21
  22. 22. It took 40 years betweenthe of diffusion of electricityand …! At the beginning, steam engines were replaced by electric motors and power was transported by converter belts. Dr. Patrick Stähler | 22
  23. 23. ... and new processes and businessmodels that were based onelectricity like the assembly line! It much easier to distribute electricity than mechanical energy
  24. 24. Tradition is not a business model!The Internet will spark 4!business modelinnovations "but it will take time!
  25. 25. The internet isnot facebook!The Internet isnot Twitter.!
  26. 26. Failed business models due to lack of understand what the The Internet is not Internet is all about TV , just a bit better!!The Internet is not anewspaper, with someinteractive features!!
  27. 27. More failure The Internet is not just another distribution channel, this time electronic!The Internet is not atelephone, just with musicand video.!
  28. 28. New Media are!1.  active (can act by themselves)!2.  ubiqutious (space & time)3.  interactiv (human can interact with and through the medium, but also the medium with other media)!4.  interlinked (mashups are possible)!5.  multimedia (text, voice, video)!
  29. 29. Tradition is not a business model!The Internet has very 5!special idiosyncrasies.Build your businessmodels on top of them!"!
  30. 30. technology! X! value / utility! creates! enables! business model! defines! The business modelbusiness strategy! creates value not technology or a product itself !
  31. 31. To develop a business model, is "To Do the "right things "And Not to do things right!
  32. 32. „What is a business model?“!
  33. 33. Are you aware o f your DN A?!The business model is theDNA of your business!
  34. 34. The business model givesmeaning to your employeesand customers!
  35. 35. 4 key questions for a successful business: What How do we How do we Who is on excites our create value earn money? our team? customers? for our custo- What value mers? do we pursue? Value Proposition Value Architecture Revenue Model Culture and Values The core business challeng e
  36. 36. 4 key questions for a successful business: What How do we How do we Who is on excites our create value earn money? our team? customers? for our custo- What value mers? do we pursue? Value Proposition Value Architecture Revenue Model Culture and Values The core business challeng e
  37. 37. 4 key questions for a successful business: What How do we How do we Who is on excites our create value earn money? our team? customers? for our custo- What value mers? do we pursue? Value Proposition Value Architecture Revenue Model Culture and Values The core business challeng e
  38. 38. 4 key questions for a successful business: What How do we How do we Who is on excites our create value earn money? our team? customers? for our custo- What value mers? do we pursue? Value Proposition Value Architecture Revenue Model Culture and Values The core business challeng e
  39. 39. „ What industry are ! we in? Who are our competitors?! “ !
  40. 40. „ In which industry ! are we in?! “!
  41. 41. „That was the job ! the customer wanted to do.!“!Dr. Patrick Stähler | 41!
  42. 42. Value Proposition Customers Who are our customers? What job do we solve for our customers? Customer Benefit What benefit do we create for our customers? What benefit do we create for our partners?
  43. 43. Value ArchitectureO er Distribution & CommunicationWhat is our o er? Channels How do we reach our customers? How do we communicate with our customers?Value ChainWhat are our value creating steps?What is our value chain?Core Capabilities PartnerWhat are the core capabilities Which partners do we need?we need?
  44. 44. Revenue Model Cost Structure Revenue Sources Cost structure is defined by the With what do we earn money? value architecture.
  45. 45. Team & Values Team Values Who is on our team? What values do we pursue? What competencies do we have How do we interact with each on the team? other and the customers?
  46. 46. Questions for successful Business Model Innovation Value Architecture Value Proposition O er Distribution & Communication Customers What is our o er? Channels Who are our customers? How do we reach our customers? What job do we solve for our How do we communicate with customers? our customers? Value Chain Customer Benefit What are our value creating steps? What benefit do we create for our What is our value chain? customers? What benefit do we create for our partners? Core Capabilities Partner What are the core capabilities Which partners do we need? we need?Revenue Model Cost Structure Revenue Sources Cost structure is defined by the With what do we earn money? value architecture.Team & Values Team Values Who is on our team? What values do we pursue? What competencies do we have How do we interact with each other on the team? and the customers?
  47. 47. Questions for successful Business Model Innovation Value Architecture Value Proposition O er Distribution & Communication Customers What is our o er? Channels Who are our customers? How do we reach our customers? What job do we solve for our How do we communicate with customers? our customers? Value Chain Customer Benefit What are our value creating steps? What benefit do we create for our What is our value chain? customers? What benefit do we create for our partners? Core Capabilities Partner What are the core capabilities Which partners do we need? we need?Revenue Model Cost Structure Revenue Sources Cost structure is defined by the With what do we earn money? value architecture.Team & Values Team Values Who is on our team? What values do we pursue? What competencies do we have How do we interact with each other on the team? and the customers?
  48. 48. If you are in a market forgiants...!
  49. 49. .. and you play with theirrules you will getnowhere…!
  50. 50. „…but if you can create your own rules of engagement than you can compete even in a market for giants. “!
  51. 51. Innovation is all about beingdifferent!
  52. 52. But if everybody is doing hesame, you have to findsomething else!
  53. 53. Path to business model innovationLead, don’t follow. Break 6!rules. Create markets.Throw away your market studies!
  54. 54. If you want to find a disruptive businessmodel innovation you just have tofollow the prescription to the right.""Your success is guaranteed!!
  55. 55. Sorry, life is not a fairy tale."You can find sustaining innovation witha structured process, but not disruptivebusiness model innovation. "Business model innovation are all abouttry and error under high uncertainty!
  56. 56. Your Head!THE greatest working tool "
  57. 57. Creating Business modelinnovations is a creative andanalytical process "There is a reason why god gave ustwo brain hemispheres !
  58. 58. The fluidminds Way to Business Model Innovation 1 2 3 Understand Unlearn & mobilize Ideate Find fresh customer Unveil tacit assumptions Generate as many ideas as insights via jobs-to-be-done about your industry and possible for: Describe current business your business model Value proposition model Create discomfort with (customers & benefits) Understand market trends current situation Value architecture & mechanisms Secure backing of top Revenue model management for the Values & culture rethinking process and the necessity for change 4 5 6 Design Select & prototype Build & learn Decide on three to four stra- Select the optimal business Execute business model tegic directions to work on models Gather customer data & Design of business models Test prototype with feedback on canvas potential customers Adapt & improve business Check interdependencies Build prototype model of all components of the Write business case designed business model Select the business model Work on uniqueness of your to start with positioning Optimize componentsCreated with the friendly support of Wolfsburg AG | Designed by Gottschalk+Ash Int’l
  59. 59. What is a good strategy?! trend! differenti focus! ation! build on strengths!
  60. 60. It’s about finding the righttrend to surf! !
  61. 61. „Business model innovation is about being!!DIFFERENT!“!
  62. 62. NO, REALLY ! DIFFERENT!
  63. 63. Dr. Patrick Stähler | 63!
  64. 64. DOING!not learning to do,!is the essence of !entrepreneurship! Guy Kawasaki, The Art of the Start 2004, p. xi!
  65. 65. „Scary to be this nail. Wherewill the hammer hit nexttime?“!
  66. 66. More information http://blog.business-model-innovation.comDr. oec. Patrick Stähler!fluidminds GmbH!Seefeldstrasse 5a!CH-8008 Zürich!Patrick.Staehler@fluidminds.ch!www.fluidminds.ch!@business_inno!
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