UNKNOWN A1 / open seatingBUSINESS MODEL INNOVATION
Innovation common understanding ”A nearly universal obstacle for innovation success is that people have pervasive misunderstandings about what innovation is, where it comes from, and even how to deﬁne, measure, foster, or reward it. With fundamentals like these all up for grabs, its amazing that innovation ever occurs.” Jay Doblin (1920-89) 2
”Innovation is the process of creatingand delivering new customer value inthe marketplace.” Carlson & Wilmot ”The ability of individuals, companies,and entire nations to continously createtheir desired future.” John Kao 3
A palette of opportunities Business Model Offerings Mark et seg ment s Solutions ling Chan / Enab nels Organizing Process Delivery
Innovation dimensions Volume of innovation activities last decade Products/ Strategic Customer Core Sourcing/ Organizing/ Market Network/ Revenue Solutions Channels Brand/Designservices concepts Experience process Distribution Eanbling segments Alliances streams OFFERINGS DELIVERY PROCESS BUSINESS MODEL
Innovation dimensions Less than 2% of the innovation activities creates 90% of the value. Products/ Strategic Customer Core Sourcing/ Organizing/ Market Network/ Revenue Solutions Channels Brand/Designservices concepts Experience process Distribution Eanbling segments Alliances streams OFFERINGS DELIVERY PROCESS BUSINESS MODEL
A sole focus on traditional strategy works:Todays market and competitors determine our future focus… RED OCEAN The Battle of decreasing margins
By also focusing on the strategic innovation works:New opportunities based on future needs – outside todays red ocean –centered around the core competence. BLUE OCEAN Create new markets without a challenge from competitors
STRATEGIC INNOVATION Innovation driven by the company´s core competence, throughout dimensions, where competitors are doing little or nothing at all (Høy 2006)
A classic smart grid roll out 3. Business models Experimenting with newVALUE CREATION products and services based upon customer insights and 2. Operating model technology innovations Efficiency and stabilize processes 1. Technology Validate and test. Risk management TIME
t is a l Wha ode ess m it busin hy is a nd w ant? im portBusiness models Hafslund / Alliander
A business model describes the rationale of how an organization creates, delivers and captures value
BUSINESS MODEL CANVAS CUSTOMER RELATIONSHIP KEY ACTIVITIES KEY VALUE CUSTOMER PARTNERS PROPOSITION SEGMENTS KEY RESOURCES CHANNELS COST STRUCTURE REVENUE STREAMS Business model generation (2010) – Alex Osterwalder
1. CUSTOMER SEGMENTS For whom are we creating value? Who are our most important customers? CUSTOMER SEGMENTS Customer groups represent separate segments if: • Their needs require and justify a distinct offer • They are reached through different Distribution Channels • They require different types of relationships • They have substantially different proﬁtabilities • They are willing to pay for different aspects of the offer
Products/ Customer Marketservices Experience segments OFFERINGS DELIVERY BUSINESS MODEL
Where is the great market segment– not being served today?(who are NOT our customers? And why?)
2. VALUE PROPOSITION What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve? Which customer needs are we satisfying? VALUE PROPOSITION What bundles of products and services are we offering to each Customer Segment?
Social lending Customer Sourcing/ Network/ Revenue Solutions Channels Experience Distribution Alliances streams OFFERINGS DELIVERY PROCESS BUSINESS MODEL
How could a utility company get20% of a normal household budget?(what related services could we take responsibility for?)
3. CHANNELS CHANNELS 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?
News bulletin15 Dec 2011– Amazon has sold at least three millionKindles in the past three weeks.Every forth sold book is an eBook…
8 ways of selling a book1. Publisher (old school)2. Free book (as a market tool for other services)3. Co-written book (sold through social networks)4. On demand (printed whenever someone wants it)5. Online book (a book as a website)6. Do it yourself (amazon advantage)7. Sponsored book (advertising)8. Tailored book (commissioned work)
4. CUSTOMER RELATIONSHIP CUSTOMER What type of relationship does each of our Customer RELATIONSHIP Segments expect us to establish and maintain with them? Which ones have we established? How costly are they? How are they integrated with the rest of our business model?
11 page cover story inWired Magazine Customer Organizing/ Solutions Experience Eanbling OFFERINGS DELIVERY PROCESS
5. REVENUE STREAMS REVENUE STREAMS 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?
All the music – all the time Spotify@Spotify Freemium business model We’re excited to announce that we’ve now welcomed 2.5 million paying subscribers. Thanks everyone! Products/ Customer Sourcing/ Market Revenue Channelsservices Experience Distribution segments streams OFFERINGS DELIVERY PROCESS BUSINESS MODEL
6. KEY RESOURCES What Key Resources do our Value Propositions require? KEY RESOURCES Our Distribution Channels? Customer Relationships? Revenue Streams?
Strategic Organizing/ Network/ concepts Eanbling AlliancesOFFERINGS PROCESS BUSINESS MODEL
7. KEY ACTIVITIES What Key Activities do our Value Propositions require? Our Distribution Channels? KEY Customer Relationships? ACTIVITIES Revenue streams?
Products/ Customer Core Sourcing/ Market Revenue Channelsservices Experience process Distribution segments streams OFFERINGS DELIVERY PROCESS BUSINESS MODEL
8. KEY PARTNERSHIPS Who are our Key Partners? Who are our key suppliers? Which Key Resources are we acquiring from partners? KEY PARTNERS Which Key Activities do partners perform?
Ryanair Customer Organizing/ Network/ Solutions Experience Eanbling Alliances OFFERINGS DELIVERY PROCESS BUSINESS MODEL
9. COST STRUCTURE COST STRUCTURE What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
Rolls Royce was known formanufacturing and sellinghigh quality products withmarginal earnings (ROI was usually 17 years) They came up with a newbusiness model that sellshours of ﬂight instead ofengines and parts Today this is 50% of salesand 80% of earnings Sourcing/ Market Revenue Solutions Distribution segments streams OFFERINGS PROCESS BUSINESS MODEL
Unlock future SMART GRID business models Our common challenge Explore key insights to unlock new business opportunities and future business models for Hafslund and Alliander. CO-LAB WORKSHOP
What if we challenged the dominant logic? What if we compare our business model with other players in ourbusiness… what makes us unique/different? What if we think different on who our customers are? And what we´reoffering them? What if we think different about our sales channels? Are therealternatives? And what about the customer relationships? Could we do itdifferently? What if there are other ways of generating revenue streams? And so on…. Best practise Next practise
anks for listening! Mads Bruun Høy Mads.firstname.lastname@example.org 92823204