Business Model Innovation for Next Generation Enterprise


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  • Firstly, companies need to find new ways to grow and stay competitive. If a corporation with 50 billion Euro turnover wants to grow 5% every year that means generating 2.5 billion in new revenues every year. Traditionally, this has been achieved through technology, product, and service innovation. Since, these types of innovation are increasingly difficult to sustain companies are looking towards the next level and that is business model innovation.Secondly, industries are increasingly transforming because of new trends and new insurgents that compete with totally new business models. Think of the music industry. The major record companies were not prepared for the digitization of music and new players like Apple with their iPod/iTunes business model occupied their space. As a company you need to be prepared for those industry shifts.Thirdly, traditional industry boundaries are disappearing. In which industry is Apple? Is it hardware, is it software, is it entertainment, is it logistics? Well, Apple has to master parts of all those industries. The unit of analysis is not the industry anymore, but the business model. That’s a totally different kind of thinking.
  • In which industry is Apple? Is it hardware, is it software, is it entertainment, is it logistics? Well, Apple has to master parts of all those industries. The unit of analysis is not the industry anymore, but the business model. That’s a totally different kind of thinking.4:02 p.m. | Updated At the end of regular trading Tuesday, Exxon was again the most valuable company. Apple’s market cap was $346.74 billion vs. Exxon’s $348.32 billion.In 1996, Apple Computer, the venerable founder of the personal computer,was struggling to stay afloat.Now, 15 years later, Apple is the most valuable company in the world in terms of market capitalization.On Tuesday, the maker of iPhones, iPads and Macs, passed Exxon Mobil, the energy company, to take the title as the stock market’s most valued company. At 2:30 p.m., Apple’s stock was $366.62, up $10.66, or 3.02 percent, giving it a market valuation of $337.11 billion. Exxon Mobil was $68.90, down $1.45, or 2.07 percent, with a market valuation of $333.54 billion, nearly $4 billion less than Apple.Just three weeks ago Apple was $50 billion shy of  being crowned with the title of the world’s most valuable company. But that was before oil prices started falling and a broad stock market sell-off that drove Exxon’s stock price down faster than Apple’s fell.“This all goes back to Apple’s distillation when it changed its name from Apple Computer, to Apple, and their role as a technology influencer in everything we touch,” said Charles Golvin, an analyst specializing in mobile technology for Forrester Research. “Over the years Apple has become a massive force on our digital lifestyles, and they way that we connect with each other.”Much of Apple’s revival can be credited to Steven P. Jobs, the company’s co-founder and chief executive. Mr. Jobs, who left Apple in 1985 to start NeXT Computers, rejoined Apple in 1997, reorganizing the company’s focus, product line and management team.
  • Business Model Innovation for Next Generation Enterprise

    1. 1. Business ModelInnovationSustainable & Inclusive © Confederation of Indian Industry
    2. 2. We live in a volatile world Financial markets Commodities Climate change Governance & Regimes Consumers © Confederation of Indian Industry
    3. 3. Every one seems to be falling shortof delivery © Confederation of Indian Industry
    4. 4. Future is what we create Pressure on the Planet = f ( # of People) X (Quality of Life) 7 Billion Food, Energy, Water, Transportation, Housing, lifestyles Pressure on the Planet = f ( # of People) X (Quality of Life) 9 Billion Respectable QoL for All © Confederation of Indian Industry
    5. 5. Create value through transformation +++ Transformative New markets BoP Energy positive buildings Mobility solutions Radical Solutions for theSustainability poorValue IT@help Resource saving Incremental Electric cars Alignment with business Renewables Reactive Community initiatives Reacting to Resource conservation outside pressure Policies & systems in an ad-hoc way + + Business Value +++ © Confederation of Indian Industry
    6. 6. NEW OPPORTUNITIESNEW MODELS © Confederation of Indian Industry
    7. 7. Let’s farm the SI2 opportunity! © Confederation of Indian Industry
    8. 8. Math the energy & water wastedThat’s the SI2 opportunity! © Confederation of Indian Industry
    9. 9. 2bn energy connections © Confederation of Indian Industry
    10. 10. "I shall have to defend myself on one point, namely, sanitary conveniences. I learnt 35 years ago that a lavatory must be as clean as a drawing-room.” 24 May 1925India is ranked as the second worst country for sanitation © Confederation of Indian Industry
    11. 11. 600 mn toilets Shit is good business © Confederation of Indian Industry
    12. 12. What? 1stW solns ≠ 3rdW needs India, a Why? world in itself potential = gap + challenge Next big export Poverty in the EU & the US Show the way (process) New biz models Meet unmet needs (soln) Affordability thru scale for penetration Energy, health, sanitation, water, education Energy, health, jobs Successes Infrastructure HUL-Shakti Experience Drivers Selco NetworksShortages/deficits – scramble NDDB Institutions Entrepreneurship HITW Collaborations Market opps ITC Recognition H2O purifier Finance M-banking © Confederation of Indian Industry
    13. 13. © Confederation of Indian Industry
    14. 14. Four characteristics of SI2• add value to the life of the people much beyond the immediate use of the product or service• create a product or service of an uncompromising quality at a price that is affordable• address the challenge of resource use efficiency to manage drastically low cost structures• scalable and replicable to suit requirements of local circumstances and complexities © Confederation of Indian Industry
    15. 15. Often, constraints to growth lie within• Policies/ regulations • Project approach• Infrastructure deficit • Iterative & not linear• Finance scarcity • Detached business• Customer knowledge strategy/ model• Cultural differences • High costs/ overheads • Need based External Internal © Confederation of Indian Industry
    16. 16. Why is BMI important?Constant need to find new ways to grow and remain competitiveNew competition comes with radically different business modelsIndustry structures are transforming © Confederation of Indian Industry
    17. 17. In which industry is © Confederation of Indian Industry
    18. 18. What industry are they in? © Confederation of Indian Industry
    19. 19. © Confederation of Indian Industry
    20. 20. 01 / Shaadi.comFor proving that marriage, Indian-style, works online as well as off. This year, the worlds largestmatrimonial site plans to open retail sites for marriage counselors for its 20 million registered users.02 / Tata MotorsFor leveraging its knowledge of the Indian market. Since the launch of the Indica in 1999, Tata Motorshas launched products such as the Nano, Aria, Indigo and a host of commercial and utility vehicles thatmeet the particular transport needs of Indian consumers and businesses.03 / HarVaFor expanding Indias outsourcing industry to rural areas. Created to "harness the value of rural India"--and head off the loss of outsourcing businesses to even lower-cost locations than Bangalore or Mumbai--HarVa is one of Indias first rural business process outsourcing (BPO) operation. HarVa trains young ruralpeople, especially women, to develop technical skills, from data entry to software testing.04 / Apollo Telemedicine Networking FoundationFor scaling telemedicine. With more than 150 telemedicine centers across the globe, Apollo offers mobiletelemedicine units in areas where there are no hospitals, remote consultations, and ICU monitoring. Itsweb-enabled telemedicine app, Medintegra WEB, allows doctors, nursing homes, and hospitals to bettertreat patients in rural areas.05 / Gram Vaani (Village Talk)For making community radio possible in villages and small towns. Gram Vaanis simple server andsoftware helps rural communities create their own radio stations. Twelve are broadcasting today, witheven more in the queue. © Confederation of Indian Industry
    21. 21. 06 / Invention LabsFor giving a "voice" to speech-impaired children. The companys AVAZ device interprets the gross motormovements of a child and uses predictive software to help users form sentences, which it then readsaloud. It also includes a portable touch-screen voice synthesizer, which can be easily mounted on awheelchair.07 / A Little WorldFor taking banking to the remotest of villages in India. Relying on biometric authentication, it connectsmore than 3 million customers to 25 major banks, which allows them to expand without branches. It alsoprovides a means for disbursing various government payments to the poor.08 / Digital GreenFor crowdsourcing instructional videos. To reach the legions of Indian farmers that ignore instructionalmedia from the agriculture industry, Digital Green turned the camera over to a more trusted teacher: theirpeers. The company lets select villagers film themselves demonstrating new agricultural techniques.Then, after checking for accuracy, it screens them for the farmers using handheld projectors.09 / FabindiaFor connecting more than 40,000 traditional craftspeople with the worlds growing urban middle class.Through its website and 136 retail stores (including one each in Rome, Kathmandu, and Dubai),Fasbindia sells clothing and products for the home, all of which are sourced from villages across India.10 / Godrej GroupFor introducing refrigeration to Indias rural masses. The Godrej ChotuKool costs roughly $70, does nothave a compressor and runs on batteries. © Confederation of Indian Industry
    22. 22. “Business model innovation it is a top priority of CEOs.” © Confederation of Indian Industry
    23. 23. Why do Business Model Innovation? Benefits cited by business model innovatorsSource: IBM Global CEO Study 2006 © Confederation of Indian Industry
    24. 24. Why do Business Model Innovation? Profit outperformers focus on business model innovationSource: IBM Global CEO Study 2006 © Confederation of Indian Industry
    25. 25. Why do Business Model Innovation? Operating margin growth in excess of competitive peersSource: IBM Global CEO Study 2006 © Confederation of Indian Industry
    26. 26. Why do Business Model Innovation? Business model innovators outperform traditional innovatorsSource: Businessweek / BCG Innovation Survey 2008 © Confederation of Indian Industry
    27. 27. WHAT IS A BUSINESS MODEL? © Confederation of Indian Industry
    28. 28. What is a business model?Simplest form What How Who © Confederation of Indian Industry
    29. 29. How innovative is your business model? The Business Model Evaluation Spider Dimension Scale 1 5 approach traditional innovative Who Customers existing customers 3rd tier noncustomers Profitability most profitable least profitable Satisfaction most satisfied least satisfied Segmentation differences commonalities Buyer single buyer chain of buyers Attributes vs attributes circumstances Circumstances What Total Solution single product total solution; experiences Appeal according to industry (either functional or emotional) against conventional logic Product vs product function Function Features improve and raise selectively raise, reduce, create, and eliminate How Customer interface conventional logic experiences; every element of buying cycle addressed Revenue streams conventional logic new streams and pricing strategic pricing Cost not aligned with strategic price of the masses aligned with strategic price of the masses Activity system low fit, me too logic high fit, creative rearrangement of activities Assets existing assets new assets © Confederation of Indian IndustrySource: Marc Sniukas
    30. 30. How innovative is your business model? The Business Model Evaluation Spider Assets 5 Activity System Customers 4 Cost Profitability 3 Revenue Streams Satisfaction 2 1 Customer Interface Segmentation Features Buyer 1 = conventional me too Function Circumstances 2 = imitative innovation Appeal Total Solution 3 = slightly innovative; some new ideas; not too risky 4 = innovative; risky new ideas 5 = radically different © Confederation of Indian IndustrySource: Marc Sniukas
    31. 31. What is theBusiness modelfor thenext gen enterprise © Confederation of Indian Industry
    32. 32. Business model for the next gen enterprise Return Target Enablers Segment Value Creation Investme Delivery nts © Confederation of Indian Industry
    33. 33. THANK YOU!Sachin JoshiEm: sachin.joshi@cii.inTw: sachin_joshi © Confederation of Indian Industry