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Class 1 digital business - unique features and future evolution

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Digital business Ecosystems

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Class 1 digital business - unique features and future evolution

  1. 1. Mestrado Integrado em Engenharia e Gestão Industrial Digital Business - Unique Features and Future Evolution DIGITAL BUSINESS ECOSYSTEMS 2015-16 António Grilo Aneesh Zutshi
  2. 2. DIGITAL BUSINESS António Grilo| Digital Business Ecosystems, 2014
  3. 3. 3 Definition
  4. 4. 4 Expanding Scope of a Digital Business •E-Commerce, Hotels, Travels Web Sites •Facebook, Linked-in Social Networks •Airbnb, Uber Social economy •Skype Desktop Apps Tablet/Mobile App Internet of Things, Sensors, Gadgets Robotics
  5. 5. ONLINE BUSINESS CHARACTERISTICS 1 Low incremental Usage Costs Free Freemium Networked Market Rapid Word of Mouth Globaliza on Network Effects Product and Marke ng Integra on To encourage online Word of Mouth eg. Facebook likes. Direct Incen ve for products with Network Effects Viral Marke ng Revenue Models Freemium - Carefully design bait and hook Smaller units of charge Rebundling features Differen al Pricing 5
  6. 6. FREE AND FREEMIUM SERVICE 6 • Targeted Ad Supported – Indirect Revenue • Increased Adoption • Increased Word of Mouth • Demonstration of Basic Version • Increases Value for paying customers for products with Network Effects
  7. 7. FREEMIUM • A small percentage (usually less than 5%) paying clients. • Free clients act as marketing agents • Critical Factor – What should be free and what should be paid – Too restricted free features – free users will not find useful – Liberal free features – Less incentives for upgrades 7
  8. 8. EXAMPLE OF FREE SERVICE 8 • Search Engine • Every Third Party Site • Google Maps
  9. 9. EXAMPLES OF FREEMIUM SERVICES 9 • Gmail • Google Drive • Dropbox - Charge for exceeding free space • Spotify – Free Ad Supported – Monthly Fee for Unlimited Music • Survey monkey – Free for basic features/Paid for additional features
  10. 10. VIRAL MARKETING • Use existing clients for spreading with their tacit approval – Different from word of mouth – Different from spam • Hotmail- one of the first examples • Plaxo – online address books 10
  11. 11. VIRAL MARKETING CHARACTERISTICS 11 • Gives away products or services; • Provides for effortless transfer to others; • Scales easily from small to very large; • Exploits common motivations and behaviors; • Utilizes existing communication networks; • Takes advantage of others’ resources.
  12. 12. PRODUCT AND MARKETING INTEGRATION • Marketing integrated into all aspects of product • Incentivise users to invite friends during product usage 12
  13. 13. HARNESSING WORD OF MOUTH • Active Social Media Presence – Promotion of new products – Visible Addressing of user complaints • Participation in Forums • Actively scan for user issues • Promotion of user blogs praising a product 13
  14. 14. MARKET BUSINESS MODEL • Develop a core product • Allow third party app developers to create apps. • Charge commission on the sale of apps or enhanced features. 14
  15. 15. NETWORK EFFECT • Utility of a product is enhanced when there are more users • Needs a long term strategy, difficult to enter competitive markets • Must be used to create lock in effects • Must have low initial entry barriers – using freemium, viral marketing 15
  16. 16. TYPES OF DIGITAL BUSINESS MODELS BASED ON NETWORK EFFECTS • Provisioning of Online Services – Search, Saas, data aggregations, music, etc – Could be viral, especially in case of freemium • Single Sided Platforms – With Network Effects – e.g. Facebook, Youtube • Double Sided Platforms – App development platforms, e-commerce, network effects – Eg. Amazon, ebay 16
  17. 17. DISRUPTIVE BUSINESS MODELS • Unit Pricing to Subscription based – Continued Revenue – Hosted SaaS – Myerp.com 17
  18. 18. DIGITAL BUSINESS MODELS - VOIP Freemium Business Model Technology - Peer to Peer Communications - Free Skype Calls - Paid Skype Outs Cheap, multiple front companies
  19. 19. COMMISSION BASED PRICING 19
  20. 20. COMMISSION BASED VS SUBSCRIPTION 20 • B2C • Commission Based • B2B • Subscription Based E-marketplaces
  21. 21. AUCTION • Ebay.com • Freelancer.com • Elance.com 21
  22. 22. CROWDSOURCING • Getting users to review Places, Hotels • Open Innovation • Crowdvoting • Microwork T Shirt Designs Re-Captcha
  23. 23. FOURSQUARE – USING MOBILE AND GPS António Grilo| Digital Business Ecosystems, 2014
  24. 24. EXAMPLE: IPAD IN RESTAURANTS António Grilo| Digital Business Ecosystems, 2014
  25. 25. Linehealth 25
  26. 26. 26 TYPES OF INTERNET START UPS (Startup Genome) Type 1 - The Automizer Common characteristics: self-service customer acquisition, consumer focused, product centric, fast execution, often automize a manual process. Examples: Google, Dropbox, Eventbrite, Slideshare, Mint, Groupon, Pandora, Kickstarter,Zynga, Playdom, Modcloth, Chegg, Powerset, Box.net, Basecamp, Hipmunk, OpenTable etc. Type 1N - The Social Transformer Common characteristics: self service customer acquisition, critical mass, runaway user growth, winner take all markets, complex ux, network effects, typically create new ways for people to interact. Examples: Ebay, OkCupid, Skype, Airbnb, Craigslist, Etsy, IMVU, Flickr, LinkedIn, Yelp, Aardvark, Facebook, Twitter, Foursquare, Youtube, Dailybooth, Mechanical Turk, MyYearbook, Prosper, Paypal, Quora, Hunch, etc.
  27. 27. 27 TYPES OF INTERNET START UPS (2) Type 2 - The Integrator Common characteristics: lead generation with inside sales reps, high certainty, product centric, early monetization, SME focused, smaller markets, often take innovations from consumer Internet and rebuild it for smaller enterprises. Examples: PBworks, Uservoice, Kissmetrics, Mixpanel, Dimdim, HubSpot, Marketo Xignite, Zendesk, GetSatisfaction, Flowtown, etc. Type 3 - The Challenger Common characteristics: enterprise sales, high customer dependency, complex & rigid markets, repeatable sales process. Examples: Oracle, Salesforce, MySQL, Redhat, Jive, Ariba, Rapleaf, Involver, BazaarVoice, Atlassian, BuddyMedia, Palantir, Netsuite, Passkey, WorkDay, Apptio, Zuora, Cloudera, Splunk, SuccessFactor, Yammer, Postini, etc.
  28. 28. 28 MARKET TYPE BY OF TYPE OF INTERNET START UPS
  29. 29. 29 REVENUE STRATEGY
  30. 30. Classification according to Lean Analytics 30 •Amazon, Expedia E-commerce •Gmail, Basecamp, Mendley SaaS – Software as a Service •Angry Bird, Torque Free Mobile App •CNN, CNET Media Site •Wikipedia, Facebook, Youtube User Generated Content •Ebay, Google play, i-Tunes Two Sided Marketplace
  31. 31. Internet of Things and Devices 31 • Beyond mobility: The connected world—including cars, homes, and wearables—are creating a rapidly expanding world of access to the customer. Two out of three of IT and business executives report that smart objects will have a high or very high impact on their organizations by helping to advance a company’s industry position or gain competitive advantage. • Rising consumer demand: Two-thirds of consumers are expected to purchase a connected home device within the next five years, and the ownership of consumer wearables is expected to double year over year by 2016.

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