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East African Business Summit - business model session

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East African Business Summit - business model session

  1. 1. BUSINESS MODEL competitive advantage through innovation Dr. Alexander Osterwalder, July ‘08 East African Business Summit
  2. 3. William CEO Regional Retail Bank Focus: stay ahead of competition WAIT
  3. 4. Eddie Entrepreneur Music & Film Industry Focus: reach global markets and strive WAIT
  4. 5. Charlene Senior Investment Specialist Africa Advisor to Pension Funds Focus: find institutions that stand out WAIT
  5. 6. they’re all looking for …
  6. 7. the most competitive BUSINESS MODEL
  7. 10. global CEO survey
  8. 11. In the operations area, much of the innovation and cost savings that could be achieved has already been achieved. Our greatest focus is on business model innovation, which is where the greatest benefits lie. IBM Global CEO Study 2006 “ ”
  9. 13. Nearly all CEOs are adapting their business models — two-thirds are implementing extensive innovations. More than 40 percent are changing their enterprise models to be more collaborative. IBM Global CEO Study 2008 “ ”
  10. 14. is business model innovation on your agenda?
  11. 15. CONCLUSION focusing on business model innovation pays off 1
  12. 18. iPod + iTunes
  13. 19. CONCLUSION business model innovation leverages product innovation 2
  14. 22. low cost short haul fractional jet ownership business class only low cost long haul high-speed trains
  15. 23. CONCLUSION multiple business models compete in one industry - which one’s right for you? 3
  16. 24. ♯ 1 focusing on business model innovation pays off ♯ 3 multiple business models compete in one industry ♯ 2 business model innovation leverages product innovation
  17. 25. how can we get a grasp of business models? ?
  18. 26. so how do YOU describe a business model?
  19. 27. <ul><li>A business model is nothing else than a representation of how an organization makes (or intends to make) money </li></ul>“ ”
  20. 28. yet, that is not enough to work with…
  21. 29. 90’000 views 11’500+ downloads http://business-model-design.blogspot.com
  22. 30. WHAT? WHO? HOW? $? € ? CUSTOMER CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS KEY RESOURCES KEY ACTIVITIES REVENUE FLOWS DISTRIBUTION CHANNELS PARTNER NETWORK
  23. 31. Apple’s iPod & iTunes CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS Offer CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS KEY ACTIVITIES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY RESOURCES “ high-end” consumer Apple stores & dealer networks mac.com lifestyle brand lasting ;-) hardware revenues stylish MP3 player hardware suppliers hard- & software design brand management IT platform management hard- & software development marketing Brand & People iTunes software multi-media rights iTunes multi-media revenues multi-media content IT platform management partners resources activities costs revenues offer relationship clients channels digital rights costs content producers
  24. 32. business model CANVAS how do you work with the
  25. 33. what is your business model? http://business-model-design.blogspot.com OFFER what do you offer your customers in terms of products and services? what do your customers pay for? why do customers come to your company? how does your offer differ from that of other service providers? DISTRIBUTION CHANNELS how do you reach customers and acquire them? through which channels do you interact with customers? CUSTOMER RELATIONSHIPS what type of relationships do you build with your customers? do you have a customer relationship management strategy? CUSTOMER SEGMENTS who are your customers? can you describe the different types of customers you are targeting? how is each of your customer segments different? REVENUE STREAMS / PRICING what is your revenue structure? how do you earn money? what type of revenues do you earn? (transaction fees, subscriptions, service fees, …) COST STRUCTURE how does your cost structure look like? what are the most important costs of running your business model? KEY ACTIVITIES what are the key activities and key processes in your business model? PARTNER NETWORK who are your most important strategic partners? who assists you with strategic resources and activities? which internal activities could you externalize at higher quality and lower costs? KEY RESOURCES what are the most crucial and costly resources in your business model? (people, networks, locations, skills, …)
  26. 35. POWERFUL what’s so about this?
  27. 36. visual it is
  28. 37. visual blueprint
  29. 38. holistic it is
  30. 39. strategic fit
  31. 40. co-creation it fosters
  32. 41. participation
  33. 42. prototyping it allows
  34. 43. creativity
  35. 44. what about the PROCESS ?
  36. 45. <ul><li>describe existing business model </li></ul><ul><li>assess strengths and weaknesses </li></ul><ul><li>brainstorm on improvements & opportunities </li></ul><ul><li>turn new model into a project roadmap </li></ul>1 2 4 3 VISUALIZE ASSESS INNOVATE PLAN 5 IMPLEMENT <ul><li>communicate & implement </li></ul>The 5 steps of business model design & innovation
  37. 46. example of an innovative BUSINESS MODEL
  38. 49. CLIENT SEGMENTS Offer CLIENT SEGMENTS OFFER CLIENT SEGMENTS DISTRIBUTION CHANNELS rural villagers ? mobile phone connectivity CLIENT SEGMENTS CLIENT SEGMENTS PARTNER NETWORK KEY RESOURCES Telenor Network
  39. 50. <ul><li>1138 branches </li></ul><ul><li>12’801 employees </li></ul><ul><li>2.3 million borrowers </li></ul><ul><li>39’172 villages covered </li></ul><ul><li>$33 million lent monthly </li></ul><ul><li>94% of borrowers female </li></ul>Grameen Bank (microfinance)
  40. 51. $ $ $
  41. 52. $ $ $
  42. 53. CLIENT SEGMENTS Offer CLIENT SEGMENTS OFFER CLIENT SEGMENTS DISTRIBUTION CHANNELS rural villagers ? mobile phone connectivity CLIENT SEGMENTS CLIENT SEGMENTS PARTNER NETWORK KEY RESOURCES Telenor Network phone ladies Grameen Bank Grameen Bank Telenor CLIENT SEGMENTS KEY ACTIVITIES loans & billing CLIENT SEGMENTS REVENUE FLOWS call revenues CLIENT SEGMENTS CLIENT RELATIONSHIP CLIENT SEGMENTS COST STRUCTURE
  43. 54. RESULTS
  44. 55. there are about 250’000 women retailing telephone services in 60’000 villages giving access to about 100 million people
  45. 56. the 250’000 telephones are producing revenues at an annual rate of well over $100 million for GrameenPhone
  46. 57. each entrepreneur makes about $2 in profits per day or about $700 per year
  47. 58. CLIENT SEGMENTS Offer CLIENT SEGMENTS OFFER CLIENT SEGMENTS DISTRIBUTION CHANNELS rural villagers ? mobile phone connectivity CLIENT SEGMENTS CLIENT SEGMENTS PARTNER NETWORK KEY RESOURCES Telenor Network phone ladies Grameen Bank Grameen Bank Telenor CLIENT SEGMENTS KEY ACTIVITIES loans & billing CLIENT SEGMENTS REVENUE FLOWS call revenues CLIENT SEGMENTS CLIENT RELATIONSHIP CLIENT SEGMENTS COST STRUCTURE electricity electricity ladies utility fees power power generator
  48. 59. ♯ 1 business models are a priority of many business people today ♯ 3 new powerful business models are possible to create ♯ 2 we need a common language to describe & manage business models
  49. 60. thank you!
  50. 61. business-model-design.blogspot.com Business Model Innovation Book

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