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Service in the industry is not a product feature but a business model

ure Lect I AFSM And
this lecture will provide you with insights on how to design new business models based on both business logic and creative instinct

Example from the past

Example from present day

Example for the future >>>
pay for services?

Strategy Consultant: 80% corporate/executive +
20% start-up/new business 2010 Publishers, broadcasters, retailers and technology companies 2009 Entertainment, telecom and 7% television production companies 3% 34% 2008 Travel and leisure, architecture, fashion and professional services 2007 companies 2006 Industrial manufacturing, (bio-) technology, science and education, 2005 banking and insurance companies 2004 Aviation, automotive, engineering 41% 2003 and construction companies 14% Retail and FMCG High-tech industry Media and technology Creative industry Let me introduce myself Professional services

Goal to discover new business
model(s) together 1. Let’s meet the industry >>> and your greatest challenges 2. Let’s think services >>> and use your creative instinct 3. Let’s talk business >>> and bring in your business logic (finally) 2x45 minutes, with breaks and discussion

1 The industry the players,
the game

Let’s meet the industry

uire? What value do we
deliver to the customer? What type of relationship doe Which one of our customer’s problems are we helping to solve? Segments expect us to establ What bundles of products and services are we offering to each Customer Segment? Which ones have we establish Which customer needs are we satisfying? How are they integrated with How costly are they? The industry mainly delivers high-technology products and services to businesses Greatest challenge: Customer orientation and service innovation quire? Through which Channels do o

What Key Activities do our
Value Propositions require? What value do we deliver to t Our Distribution Channels? Which one of our customer’s p ners? Customer Relationships? What bundles of products and Revenue streams? Which customer needs are we Research > Development > Purchasing > Production > Assembly > Distribution > Sales > Maintenance Greatest challenge: Process innovation and automation

What Key Resources do our
Value Propositions require? Our Distribution Channels? Customer Relationships? Revenue Streams? The most important assets in the industry are physical (facilities, machines and systems) and intellectual (patents) Greatest challenge: Human resources

Who are our Key Partners?
What Key Activities do our Val Who are our key suppliers? Our Distribution Channels? Which Key Resources are we acquiring from partners? Customer Relationships? Which Key Activities do partners perform? Revenue streams? The industry works in networks of suppliers and partners to reduce risks and acquire access to resources Greatest challenge: Managing alliances

What are the most important
costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive? High proportion fixed costs Greatest challenge: Productivity and cost control

Service in the industry is
not a product feature but a business model Wrap up left-hand side of the business model 1. Greatest challenge for your value proposition >>> customer orientation and service innovation 2. Greatest challenge for your key activities >>> process innovation and automation 3. Greatest challenge for your key resources >>> human resources 4. Greatest challenge for your key partners >>> managing alliances 5. Greatest challenge for your cost structure >>> productivity and cost control

k Brea Let’s describe your
nightmare competitor

Break Goal imagine your ultimate
competitor 1. Think of a competitor with unlimited resources and working capital >>> don’t rely on the past 2. This competitor has as many valuable relationships as you have >>> forget any market barriers 3. This competitor is operational in business today >>> let go of the status quo 4. What would this ultimate competitor look like and how would he act? 5. What would you do to deal with this competitor (e.g. prevent/defense/become/...)? 5 minutes, individually

Let’s play

2 Service
the concept

Let’s think services

uire? What value do we
deliver to the customer? What type of relationship doe Which one of our customer’s problems are we helping to solve? Segments expect us to establ What bundles of products and services are we offering to each Customer Segment? Which ones have we establish Which customer needs are we satisfying? How are they integrated with How costly are they? The industry mainly delivers high-technology products and services to businesses Greatest challenge: Customer orientation and service innovation quire? Through which Channels do o

What type of relationship does
each of our Customer For whom are we creating val ping to solve? Segments expect us to establish and maintain with them? Who are our most important ering to each Customer Segment? Which ones have we established? How are they integrated with the rest of our business model? How costly are they? It takes a relationship and a social space for a customer to experience a service Greatest challenge: Establish relationships

Through which Channels do our
Customer Segments want to be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? The industry’s value chain hardly facilitates interaction Greatest challenge: Create multiple touch-points what value are our customers really willing to pay? what do they currently pay? are they currently paying?

No. mer For whom are
we creating value? th them? Who are our most important customers? ness model? The industry offers payers products and services, not necessarily solutions to problems experienced by actual end-users Greatest challenge: Value-driven innovation

For what value are our
customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? The industry is asset sale driven Greatest challenge: Usage, subscription, licensing models This work is licensed under the Creative Commons Attribution-Sh To view a copy of this license, visit http://creativecom or send a letter to Creative Commons, 171 Second Street, Suite 300, San Fr

Service in the industry is
not a product feature but a business model Wrap up right-hand side of the business model 1. Greatest challenge for your value proposition >>> customer orientation and service innovation 2. Greatest challenge for your customer relationships >>> establish relationships 3. Greatest challenge for your channels >>> create multiple touch-points 4. Greatest challenge for your customer segments >>> value-driven innovation 5. Greatest challenge for your revenue streams >>> usage, subscription, licensing models

ds Tren Let’s discuss the
impact of trends in your markets

Trends

“The global emerging middle class
now stands at two billion people who spend USD 6.9 trillion a year, a figure which is expected to rise to USD 20 trillion - twice current ” US consumption - by 2020. Source: McKinsey, July 2010 Let’s illustrate

“The top ten value creators
in the Boston Consulting Group’s 712-company sample are all from Asia: five companies listed on stock exchanges in China, two in Hong Kong, and one each in India, Indonesia, and South Korea. ” Source: Boston Consulting Group, September 2010 Let’s illustrate

“The US ranked 24th out
of 25 markets around the world in an examination of green consumer habits around the world. Approximately two in three Americans perceive green products to be too costly and one-third believes they don’t ” work as well as “regular” products. Source: GfK Roper, October 2010 Let’s illustrate

“Consumers from emerging markets in
the Asian region are more willing to pay more for green products. Nearly 95% of Thai consumers, 90% of Chinese consumers and over 80% of Malaysian and Korean consumers are willing to pay more, yet less than 60% of consumers from other Asia-Pacific markets such as Hong Kong and Australia exhibit willingness to pay more. ” Source: Datamonitor, December 2010 Let’s illustrate

“A national survey of 1,800
independent businesses in the US found that 80% said public awareness of the value of choosing locally owned businesses had ” increased in the last year. Source: ABA, January 2010 Let’s illustrate

“Between the year 2010 and
2040, the global population age 65 and older is expected to rise from 530 million ” to 1.3 billion. Source: US Census Bureau, March 2010 Let’s illustrate

“The number of non-employer (single
person) businesses in the US, with an income greater than USD 1,000 (often secondary sources of income) increased by 40.5% in the ten years from 1997 to ” 2007. Source: US Census Bureau, June 2010 Let’s illustrate

“An average of 78% of
consumers in the US, UK, Canada, Brazil, India and China say they are willing to co-create with ” brands. Source: IBM, January 2010 Let’s illustrate

“Each year, global consumers make
more than 500 billion online impressions on one another regarding products and ” services. Source: Forrester, September 2010 Let’s illustrate

Service in the industry is
not a product feature but a business model Service design process 1. Discover >>> goals, strategy, context and customer journey 2. Conceptualize >>> experiences from end-users to personnel 3. Design >>> touchpoints, service system, look-and-feel 4. Build >>> platform, physical locations, media, training 5. Deliver >>> organise, communicate, evaluate

3 Business
the models

Let’s talk business

Ideas for inspiration

10 New Business Models for
this Decade 1. Localized Low-Cost Business Model beta 2. One-Off Experience Business Model beta 3. Beyond Advertising Business Model beta 4. Markets Are Conversations Business Model beta 5. Low-Budget Innovation Business Model beta 6. Community-Funded Business Model beta 7. Sustainability-Focused Business Model beta 8. Twisted Freemium Business Model beta 9. Unlimited Niches Business Model beta 10. In-Crowd Customers Business Model beta

Localized Low-Cost Business Model

The Business Model Canvas Localized
Low-Cost Business Model 4 Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Independent Who are our key suppliers? Which Key Resources are we acquiring from partners? Our Distribution Channels? Customer Relationships? Simple, small Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Segments expect us to establish and maintain with them? Which ones have we established? Higher incomes Who are our most important customers? Which Key Activities do partners perform? Revenue streams? Cost efficient Which customer needs are we satisfying? How are they integrated with the rest of our business model? product/service and cheap How costly are they? in emerging procurement designers product/service markets Lower customer expectations Standardized Marketing Lower-incomes Minimum local micro and quality in emerging specifications producers management markets KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Income Channelsour Customer Segments Through which Channels do want to be reached? Metropolitan Resources Revenue Streams? generating/self- How are we reaching them now? How are our Channels integrated? areas in Which ones work best? sustaining Which ones are most cost-efficient? How are we integrating them with customer routines? mature markets Energy efficient Brands distribution via local vendors Other areas in mature markets Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? Micro financed How much does each Revenue Stream contribute to overall revenues? Low prices x Low costs local banks/ High volumes foundations Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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One-Off Experience Business Model

The Business Model Canvas One-Off
Experience Business Model 4 Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Which Key Resources are we acquiring from partners? Our Distribution Channels? Customer Relationships? 3rd party Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment? Segments expect us to establish and maintain with them? Which ones have we established? Customers in Who are our most important customers? Which Key Activities do partners perform? Offline event Revenue streams? Software Which customer needs are we satisfying? Instant How are they integrated with the rest of our business model? see-hear-buy How costly are they? markets of organizers development consuming product/service abundance Conversation Experience Offline pop-up One-off Instant engagement seeking commerce experiences contributing and initiative customers KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Channelsour Customer Segments Through which Channels do want to be reached? Online retailers Resources Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Software Online platform channels Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? Online Commissions How much does each Revenue Stream contribute to overall revenues? Commissions Hosting costs presence and pop-up instant online findability costs commerce retail Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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Beyond Advertising Business Model

4 The Business Model Canvas
Beyond Advertising Business Model Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers? Which Key Resources are we acquiring from partners? Facilitate Customer Relationships? Trusted What bundles of products and services are we offering to each Customer Segment? Research, Which ones have we established? Customers in Commercial Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? sharing and product/service compare, mature partners contributing advice review markets Public Facilitate On-demand Individuals partners interacting interaction KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Channelsour Customer Segments Through which Channels do want to be reached? Customers in Review portals Resources Revenue Streams? How are we reaching them now? How are our Channels integrated? emerging Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? markets Facilitation Online skills channels Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? Content Online Facilitators management findability Facilitation fees Commissions costs costs Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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Markets Are Conversations Business Model

The Business Model Canvas Markets
Are Conversations Business Model 4 Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers? Which Key Resources are we acquiring from partners? Real-time Customer Relationships? Modular and What bundles of products and services are we offering to each Customer Segment? Find, follow, Which ones have we established? Media Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? Engaged tracking and beta products/ interact and companies customers conversing services collaborate Product/service Non-engaged improvement customers and innovation KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Channelsour Customer Segments Through which Channels do want to be reached? Resources Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Social media Online social skilled networks employees Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? Lower product/ How much does each Revenue Stream contribute to overall revenues?Higher service failure recurrent costs revenues Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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Low-Budget Innovation Business Model

4 The Business Model Canvas
Low-Budget Innovation Business Model Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers? Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Free / Which ones have we established? Local customer Which Key Activities do partners perform? Revenue streams? Customer Co-created Which customer needs are we satisfying? How are they integrated with the rest of our business model? How costly are they? personalized Early adopters communities observation products samples Global trend Customer Followers trackers participation KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Channelsour Customer Segments Through which Channels do want to be reached? Resources Revenue Streams? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Customer Offline Online behavior development channels intelligence labs Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? Lower product Higher new development product costs success rate Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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Community-Funded Business Model

4 The Business Model Canvas
Community-Funded Business Model Day Month Year No. Key Key Value Customer Customer Partners Activities Proposition Relationships Segments Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value? Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers? Which Key Resources are we acquiring from partners? Customer Relationships? Community- What bundles of products and services are we offering to each Customer Segment? Which ones have we established? Media Which Key Activities do partners perform? Revenue streams? Fund Which customer needs are we satisfying? Community How are they integrated with the rest of our business model? How costly are they? funded Believers companies management membership products Community Producers Suppliers management KeyResources do ourCustomer Relationships? What Key Our Distribution Channels? Value Propositions require? Channelsour Customer Segments Through which Channels do want to be reached? Resources Revenue Streams? How are we reaching them now? Buyers Distributors How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines? Online Community community Retail stores intelligence platform Cost Revenue Structure costs inherent in our business model? What are the most important Which Key Resources are most expensive? Streams pay? really willing to pay? For what value are our customers For what do they currently Which Key Activities are most expensive? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues? Marketing Production Distribution Supplier Product sales Interest costs costs costs subscriptions Designer: Ouke Arts (ouke.arts@gmail.com) This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

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Sustainability-Focused Business Model