The document discusses the key elements of a business model including product innovation, customer relationships, infrastructure management, and conclusions. It covers topics such as value propositions, customer segments, distribution channels, revenue streams, core capabilities, and partnerships. The document provides examples and definitions for each element and discusses how defining a business model can help a company understand, share knowledge, react to change, measure performance, and engage in business model innovation.
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Internet + Business = E Business
1. INTRODUCTION PRODUCT INNOVATION CUSTOMER RELATIONSHIP INFRASTRUCTURE MANAGEMENT CONCLUSION March 2007 Internet + business = e-business Jl. Nakula I/5-11 Tel. +62243520165 - http://www.dinus.ac.id Universitas Dian Nuswantoro Business Strategic Table of content
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3. Business/IT alignment BUSINESS strategy I. TECHNOLOGY strategy Function integration Strategic fit BUSINESS IT strategy infrastructure I. SYSTEM infrastructure ORGANIZATION infrastructure Architecture Processes Skills Technology scope System competencies IT governance Administrative structure Business processes Skills Business scope Distinctive competencies IT governance [Henderson and Venkatraman, 1993] INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
4. Business/IT alignment > individual decision BUSINESS strategy Function integration Strategic fit BUSINESS IT strategy infrastructure ORGANIZATION infrastructure I. TECHNOLOGY strategy I. SYSTEM infrastructure Internal/external USERS GOALs TASK Standards Architecture … Action Information Interaction APPLICATION USABILITY prototyping
5. Order fulfilment (Pemenuhan order) Buyer Seller information Identify product Promote product influence Negotiate Negotiate payment BUY SELL goods Consume Serve information Query Answer Find source Find customer information product customer payment logistics after-sale order
6. Business/IT alignment > organizational behavior BUSINESS strategy Function integration Strategic fit BUSINESS IT strategy infrastructure ORGANIZATION infrastructure I. TECHNOLOGY strategy I. SYSTEM infrastructure Intra/inter-organization Standards Architecture … Activity Resource Coordination WORKFLOW PRODUCTIVITY simulation PROCESS UNITs / AGENTs MISSIONs
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8. Business/IT alignment > Business model BUSINESS strategy Function integration Strategic fit BUSINESS IT strategy infrastructure ORGANIZATION infrastructure I. TECHNOLOGY strategy I. SYSTEM infrastructure company/network Standards Architecture … Application Database Network INFRATRUCTURE PROFITABILITY ROI VALUE CHAIN CUSTOMERs VALUE PROPOSITION
9. Business Model > questions Core capability Value configuration Partnership Customer segment Relationship Distribution channel VALUE proposition Revenue Cost HOW? WHAT? HOW MUCH? What do we offer to our customers? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? Who are our customers? How do we reach them? How do we get and keep them? WHO? Trust
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11. Value proposition 1 Core capability Value configuration Partnership Customer segment Relationship Distribution channel VALUE PROPOSITION Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? Who are our customers? How do we reach them? How do we get and keep them? WHO? What do we offer to our customers? INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
15. Customer segment 2 Core capability Value configuration Partnership CUSTOMER SEGMENT Relationship Distribution channel Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? What do we offer to our customers? Who are our customers? How do we reach them? How do we get and keep them? INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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17. Distribution channel 3 Core capability Value configuration Partnership Relationship DISTRIBUTION CHANNEL Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? What do we offer to our customers? Who are our customers? How do we reach them? How do we get and keep them? Customer segment
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19. Distribution channel > life cycle Implementation and Use Training Monitoring Maintenance Troubleshooting Reverse Logistics (Returns) Life Cycle Management Community Offer (Specification) Negotiation Decision Contract Order & Order Tracking Billing & Payment (Financing) (Risk taking) Fulfillment Information Consulting (&Requirements) Specification Testing (Community) Advertising Promotions Public Relations Partnerships AFTER SALES EVALUATION PURCHASE AWARENESS [Muther, 2000; Ives, 2000]
20. Distribution channel > activities Illustration Promotion of authors and books Reading corners Coffee shops Sales person Cash registry (cash/credit card) Return books Banners to books etc. Search function Customer review Critics Excerpt Shopping cart checkout (Credit card) Order status Return books Transaction history Specialized affiliate Websites Expert commentaries Recommendation Free online courses Courses based on books etc. Mass advertising
21. Customer relationship 4 Core capability Value configuration Partnership CUSTOMER RELATIONSHIP Distribution channel Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
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24. Customer relationship > customization Make recommendation 2 3 4a 5 4b Establish configuration Planing of production Listen to the customer Distribution CRM Production (internal) ERP Outsourcing (external) SCM One-to-one Mass-customization
25. Infrastructure management upload images Print of images Delivery of items Marketing of product services Printing infrastructure Packing staff ColorMailer Website enables value for ACTIVITIES CAPABILITIES PARTNERS INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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27. Core capabilities (resources) 5 CAPABILITY Value configuration Partnership Customer relationship Distribution channel Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
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29. Value chain 6 capability VALUE CONFIGURATION Partnership Customer relationship Distribution channel Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
33. Partnership agreement 7 capability Value configuration PARTNERSHIP Customer relationship Distribution channel Value proposition Revenue Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
36. Partnership > Alliances Author marketing Distributor inventory sales Information systems coordination contents Shipping transport tracking Affiliate sales Customer buy content Bank payment deliver deliver order sale order sales critics Credit card clearance returns network
37. Revenue stream capability Value configuration Partnership Customer relationship Distribution channel Value proposition REVENUE Cost HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
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39. Profit and cost account capability Value configuration Partnership Customer relationship Distribution channel Value proposition Revenue COST HOW? WHAT? HOW MUCH? How do we operate and deliver? How do we collaborate? What are our key competencies? What are our revenues? Our pricing? What are our costs? WHO? Who are our customers? How do we reach them? How do we get and keep them? Customer segment What do we offer to our customers?
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41. The Business Model Ontology (BMO) Channel Customer Proposition Configuration Capability Link Activity Cost Revenue Partnership Relationship Actor Needs requires Profit HOW? WHAT? HOW MUCH? WHO? Resource INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
47. Business model innovation > examples [Osterwalder, 2005] E. 9. Cost structure C. 8. Revenue streams B. 7. Partnership agreement A. 6. Value configuration I. 5. Core capabilities F. 4. Customer relationship D. 3. Distribution channel G. 2. Target customer segment H. 1. Value proposition
Title Projet SHS - Business + internet = e-business Date October 2005 Author(s) Dr Yves Pigneur University of Lausanne (HEC) [email_address] Abstract Business/IT alignment is a key management issue and has been largely investigated. Requirement engineering now deals with goal modeling and enterprise modeling; it addresses the "function integration" but doesn't explicitly addresses the "strategic fit". The assumption of this talk is that making explicit the business model can contribute to improving the business/IT alignment. The role of a formally defined business model is outlined. We propose a Business Model Ontology to formulate, understand, analyze and share a company's business model when designing information systems. File /HEC/SHS/ SHS_Mar2006.ppt URL: http://www.hec.unil.ch/yp/TALK/slides/SHS_Mar2006.ppt Version 2.1 Versions Dates Remarks 1.0 October 2004 Presentation of SHS projects 1.1 November 2004 Business model /yp 1.2 March 2005 e-business 2.0 October 2005 business model innovation & web 2.0 2.1 March 2006 case study (LeShop)
There are examples of business model innovations in each building block. The most obvious is innovating in the value proposition. When mobile phones appeared in the market they offered a different value proposition than fixed line phones. In the early days of the Internet popular indexes like Yahoo! helped people find information on the Web. Regarding target customer segments, low-cost airlines like EasyJet have brought flying to the masses. Dell became really successful by exploring the web as a distribution channel. Gillette has made a fortune by establishing a continuous relationship with customers based on its disposable razors. Apple resurged based on its core capacity of bringing design to computers and electronic gadgets. Cisco became famous for its capacity of configuring activities in new and innovative supply chains. Intel thrived for its capacity to get partners to build on its processing platform. Google tapped in an innovative revenue streams by linking highly specific search results and content with text ads. Wal-Mart became dominant by its ability to slash cost throughout its business model. Alex Osterwalder
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