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Business Model Schools of thought *UPDATED*


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Business Model Schools of thought *UPDATED*

  1. 1. © Starcher Group LLC For the sole use of client Business Models Schools of thought
  2. 2. © Starcher Group LLC For the sole use of client Overview • During the industrial revolution, we had business models that were established and remained relevant for 20 - 100 years. Examples include Railroads, Automobile, Steel. • As the post-industrial era continues to grow in importance, Business Models’ half lives are shortening to the point where they are 7 – 10 years with many Business Models losing relevance in less time than that. • The first Business Model writings came in 1995, with Adrian Slywotsky’s “Value Migration” book, quickly followed by “Profit Zones” and “Profit Patterns”. • Since then, there have been a number of articles and books written on the subject. A common definition of Business Model still does not exist and there is no single framework or process for doing Business Model work. • Amongst Senior Executives, the term “Business Model” means nothing and everything. Because of that, there have been multiple attempts to create new and different language as an attempt to create meaning: Business Models, Business Design, Business Architecture, … to name a few.
  3. 3. © Starcher Group LLC For the sole use of client The evolution of business model thinking 1990 2000 2005 2010 20151995 Adrian Slywotzky / Mercer / Olyver Wyman Business Design, Profit Models, Value Migration Rotman DesignWorks Osterwalder Business Model Canvas Joan Magretta: Why Business Models Matter Deloitte: Deconstructing the Formula for Business Model Innovation MIT: Do Some Business Models Perform Better than Others? Gerry Lameiro: A Guidebook for Designing Business Models HBR: How to map your industry profit pools KPMG: Rethinking the business model Christensen: Skate to where the money will be Chesbrough: The role of the business models in capturing the value of innovation Afuah: Business Models: A Strategic Management Approach Chesbrough: Open Business Models Schools of thought Major Contributions 2020 St Gallen Business Model Navigator St Gallen: Business Model Navigator
  4. 4. © Starcher Group LLC For the sole use of client Multiple Schools of Thought 1995 2000 2005 2010 2015 2020
  5. 5. © Starcher Group LLC For the sole use of client Adrian Slywotzky 1995 To expand your strategic options, think business issues first, technology second Reengineering is dead. Focus on the customer Value flows to the business design best matched to customer priorities Reinvention and profit-centric thinking are the keys to sustained value growth Pattern thinking helps executives see tomorrow’s profit zones before the competition Winning business designs in the next economy will be dynamically assembled around customer priorities Explore the many ways that profit happens 1995 1995 1998 1999 2000 2000 2002 2004 Where does demand come from 20112007 Growth breakthrough through risk management Find additional profit by mining the margins of existing revenue categories
  6. 6. © Starcher Group LLC For the sole use of client Starcher Group business model thinking Framework Process Market Context Customer Selection Customer Value Gap Profit Models Revenue Models Strategic Control Points Scope Economic Model Operating Model Organizational Model Value Proposition Where is there a gap in customer experience, where the customer is willing to pay to close the gap? What business model leverage the customer value gaps? What potential strategies are available with this business model? What actions do I take to deliver the strategies? Customer Value Gaps Business Models Strategies Operating Plan What is the Market Context? How can I use that context to gain insight into potential business models Market Context 2002
  7. 7. © Starcher Group LLC For the sole use of client Rotman School of Design 2006 GEAR 1: EMPATHY & DEEP HUMAN UNDERSTANDING - WHAT’S THE OPPORTUNITY? Business Design starts with a deep and meaningful understanding the people who matter and what matters to them. Stakeholder mapping and ethnographic techniques for need-finding process leads to a valuable reframe of the opportunity to better serve unmet needs. GEAR 2: CONCEPT VISUALIZATION - WHAT’S THE BREAKTHROUGH SOLUTION? Generating breakthrough ideas calls for open exploration of new possibilities, including those that are outside your current set of considerations. Visualizing a richer and more distinct customer experience through iterative prototyping methods and co-creation with users results in a powerful and concrete refresh of your vision. GEAR 3: STRATEGIC BUSINESS DESIGN - WHAT’S THE STRATEGY TO DELIVER AND WIN? Gear 3 is an essential extension of the innovation process – defining your strategy to make big ideas valuable and viable to both the market and to the enterprise. Visualization and system-mapping techniques equip you to design a winning strategy for all stakeholders and refocus your enterprise resources to set you on a path for long-term, market- inspired value-creation. Business Design is best practiced collaboratively across disciplines – having many sharp minds on the project, working openly and iteratively through every gear, and using the most appropriate tools to get the most out of each gear.
  8. 8. © Starcher Group LLC For the sole use of client Paul Bodine – Business Architecture 2009
  9. 9. © Starcher Group LLC For the sole use of client Alex Osterwalder Business Model Canvas 2010
  10. 10. © Starcher Group LLC For the sole use of client St Gallen Business Model Navigator 2014 Magic Triangle Business Model Innovation Map
  11. 11. © Starcher Group LLC For the sole use of client Business Model Thinking Assessment Consumers Technology Business Rotman Osterwalder Each school of thought has its strengths and seeks to cover the intersection of consumers, technology and business St Gallen The Starcher Group has been delivering on business model designs and advisory services since 2002, leveraging the best thinking across contributors and schools of thought, developing differentiated expertise where needed. All in support of Meaningful Growth.
  12. 12. © Starcher Group LLC For the sole use of client Summary • The existing Business Model schools of thought are neither good or bad, they have their unique strengths and weaknesses. All, when applied properly, will lead to results that will create significant value. A couple of notes though: – The Business Model Canvas has done the best job of marketing and is now probably the best known Business Model Framework. – Adrian Slywotzky’s body of work is the most thorough and powerful, yet requires much expertise and experience to apply. – Paul Bodine’s Business Architecture work is the first one that also focuses on trying to develop a common framework and set of standards.
  13. 13. © Starcher Group LLC For the sole use of client