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Business Model Patterns and Examples Part I


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These slides are part I of 2 parts presentation about Business Model. I
n this part I present the business model definition, well-known business model patterns. Examples about each patterns is provided as well.

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Business Model Patterns and Examples Part I

  1. 1. S Business Models – Patterns & Examples Part I Ahmed Taha May 2015
  2. 2. Agenda S Business Model S Descriptions S Business Model Patterns S Unbundling business models S Long tail S Multi-Sided Platform S Free Business Model S Open Business Model
  3. 3. Business Model S Definition: S A business model describes the rationale of how an organization creates, delivers, and captures value S It is the way a business or a product monetize the value it deliver.
  4. 4. Business Model Canvas
  5. 5. Business Model Patterns S There is no right or wrong. Just make sure your offer or product fit the business model. S You can invent your own pattern. S Famous Patterns S Unbundling business models S Long tail S Multi-Sided Platform S Free Business Model S Open Business Model
  6. 6. Unbundling business models S Divide business into separate entities to focus and avoid conflicts. S Business entities can be S Product Innovation department S Innovation and Employee centered S Infrastructure Management S Cost mentality S Customer relationship management S Customer comes first.
  7. 7. Example S Swiss Private Banking Mentality S Focus on the wealthy, giving them advice. (relationship based business) S They want to keep everything in house for secrecy. S Today Environment S Outsourcing is attractive, cheaper S Laws against total banking secrecy S Clients are interested in best offer regardless of origin S Product Innovation is driven by speed and quick market entry
  8. 8. Example S Maerki Baumann S Unbundle its core business S Customer relationship and advisory S Incore Bank, offer banking services to other banks S Geneva-based Pictet S Largest swiss private bank S 200 years old S Remains integrated
  9. 9. Long Tail S Offering a large number of niche products. S Selling less of more.
  10. 10. Long Tail – Example 1 S Book Publishing Mentality S Work only with known authors S Print and publish well known best sellers with high estimated demand. S S Anyone can publish S Printing is done after book order
  11. 11. Long Tail – Example 1
  12. 12. Long Tail – Example 2 S Lego interlocking bricks S Variety of themes S Competitions becomes tough with new entries S Lego started user-generated content S Users can use Lego Digital designer to create their own theme.
  13. 13. Long Tail – Example 2
  14. 14. Multi-Sided Platform S Bring two distinct customer groups together S Business has two segments A,B. The existence of one segment without the other makes no profit. S Both segments pay. S Google- AdSense S Website owners S Advertisers
  15. 15. Multi-Sided - Example S PSP / XBOX/ Wii S Segment A S PSP / XBOX target hardcore gamers S Wii target causal gamers S Segment B S Game developers
  16. 16. Multi-Sided - Example PSP / XBOX Wii Target gamers Hardcore gamers Casual Gamers Revenue Stream Game players Both game players and developers Price Range High Low Game quality Very sophisticated Motion controlled and fun factor Game developers Licensed game manufacturers like EA- sport. Royalty from game developers
  17. 17. Multi-Sided - Example S Apple – iTunes S Songs and album maker S Song and music listeners
  18. 18. Free business Model S Another form of Multi-sided Business Model S One segment is lured with the free service S The other segment pay for the service
  19. 19. Free business Model - Example S Google - Adwords S Search users S Advertisers S Skype S Free users online Voice calls S Premium users pay for VOP though wholesale carriers
  20. 20. Bait and Hoot S Bait and Hoot another form of free business model S Customers start as Free user and then encourage to make purchases S Gillette sold razor handles at steep discount or even for free, to create demand on disposable blades
  21. 21. Bait and Hoot - Example S Apple S Offer Free iPhone S Obligated with mobile operator for two years contract
  22. 22. Open business Model S Collaborating with external parties S Using service from external companies S Provide help to external parties S Provide service to external companies
  23. 23. Open business Model - Example S Procter and Gamble S Instead of spending more on R&D S “Connect and develop” strategy S Exploiting research through external partners
  24. 24. Open business Model - Example S InnoCentive originally part of Eli Lilly S Now InnoCentive is an independent business that connects S Organizations that need research resources S With Researchers around the world
  25. 25. Reference S nstagram_and_vine_make/ S S without-alienating-users/ S landscape-business-models-5-10 S candy-crush-purchases/ S
  26. 26. About Me S Software Engineer, Co-founder of Inova LLC , TA at Alexandria University S Website : S LinkedIn: S Twitter : S Email :