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SVD 5 Business Models


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SVD 5 Business Models

  1. 1. Business Models Paul Sturrock @PSturrock
  2. 2. G E T O U T O F T H E B U I L D I N G !
  3. 3. What is a Business Model? Photo by Christopher Macsurak
  4. 4. Show me the money
  5. 5. Why bother with a Business Model? 1. Why are we needed? 2. What difference do we make? 3. How do we reach our customers? 4. What is our relationship with customers? 5. Where does our money come from? 6. What is our unfair advantage? 7. How do we make our difference? 8. Whose help do we need? 9. Where does our money go? 10.Focus for innovation and difference ©2013 Paul Sturrock
  6. 6. Image from “Business Model Generation” Osterwalder & Pigneur
  7. 7. Cultivate Random Curiosity ➡Get your head out of your screen ➡Change your routine ➡Turn up! ➡Carry your pencil ➡Make lists ➡Take Pictures ➡Sketch ➡Eavesdrop ➡Ask for stories
  8. 8. ©2013 Slingshot Venture Development
  9. 9. Adoption and Channels EdTechAccelerator January 2014
  10. 10. One Tribe - Same need - Same selection criteria - Same channels image by Dylan Walters
  11. 11. How do we reach them? - Awareness - Evaluation - Purchase - Delivery - After Sales
  12. 12. Purpose Awareness Selection Purchase Delivery After Sales Channels Metrics: Cost, Time, Results Channel Mapping
  13. 13. What relationship do we have with them ?
  14. 14. What relationship will you have with your customers?
  15. 15. What are your revenue streams?
  16. 16. CUSTOMERS X 
  17. 17. TARGET: £100K CUSTOMERS 1 Employer 1000 Followers 12 Disciples 150 Villagers 500 True Fans REVENUE/CUSTOMER £100K £100 (£24 quarterly) £8,333 (£694 month) £667 (£55 month) £200 (£17 month)
  18. 18. CREATIVE REVENUE MODELS PRODUCTS Sell Usage Subscription Rent License SERVICE Teach Consult Curate
  19. 19. Part 2: Execution & Efficiency
  20. 20. Activities: What do we do to make our difference real?
  21. 21. What is Strategy? • Operational Effectiveness is not enough • Strategy requires creation of unique position • Unique activities create sustainable advantage • Strategy requires making competitive trade-offs • Choose what you won’t do • Activities must fit and reinforce each other throughout the company
  22. 22. 11 Southwest Airlines: Low Price & Convenience Frequent, Reliable Departures Limited Passenger Service Very low ticket prices Lean, productive crews High aircraft utilisation Short haul routes between midsize cities
  23. 23. 12 Southwest Airlines: Low Price & Convenience Frequent, Reliable Departures No Meals No seat assignments No connections Employee Stock Ownership Highly Paid employees Short Gate Turnarounds Limited Use of Travel Agents Automatic Ticketing Standardized Fleet No Baggage Transfers Limited Passenger Service Very low ticket prices Lean, productive crews High aircraft utilisation Short haul routes between midsize cities
  24. 24. 13 Strategy Implementation Map Operational Objectives/ Process! High Aircraft Utilisation! Frequent Departures! Low Prices! Short Haul Routes! Limited Service! Short Gate Turnaround! X! X! X! No Meals! X! X! X! X! X! Limited use of Travel Agents! X! X! Standardized Fleet! X! X! No Baggage Transfers! X! X! X! No Connections! X! X! X!
  25. 25. Exercise: List your critical activities
  26. 26. 28 Resources - Physical - Intellectual - Human - Financial
  27. 27. Partners ScaleExpertise Risk
  28. 28. Exercise: List your unfair advantages
  29. 29. Cost Structures • Fixed vs. Variable • Economies of Scale vs. Scope
  30. 30. Differentiation Three Alternatives: • Operational Excellence • Customer Intimacy • Product Leadership
  31. 31. Throug want to How ar How ar Which Which How ar What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? Through which Channels do our Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? For whom are we creating value? Who are our most important customers? What type of relationship does each of our Customer Segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? What Key Activities do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue streams? Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform? What Key Resources do our Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? Day Month Year No. This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. One Tool: Business Model Canvas
  32. 32. Q U E S T I O N S ?