This presentation explains how to build different risks into your business model. In order to turn the risk into an opportunity. In this way you will be ahead of your competitors.

2. Mahmood Oskooei
• University: Tehran University- Entrepreneurship
• Major: DBA
• Code: 10
• Course: Business Model
• Subject: How To Build Risk Into Your Business Model
• Creator:
Email: moskooie@yahoo.com

3. Introduction
The Issue On Hand
Examples & Further Optimize
Local Example
Conclusion

4. Karan Girotra
Assistant professor
of technology and
operations
management at
Insead.
Serguei Netessine
Timken Chaired
Professor of Global
technology and
Innovation at
Insead.

6. Improving the quality of their information:
- Routine practice: produce products, stock
them and then look for their sales.
- Risks: over stocks or low stocks.
- Solution: find out consumers tastes by voting
system and adjust your production line
accordingly.
- Resulting: much easier to keep pace with
consumer preferences and refrain from over
stock or low stock (sales opportunity lost).
Furthermore, it doesn’t need outlet, no
warehouse or complicated distribution/
logistic network requirements.

8. Risk
Dealing with
product, cost,
existing
customers and
etc.
Dealing with
modelsrisks OpportunityProtection
Competitive
advantage

9. What is perennial problem with business model innovation:
Managers often find it harder to determine what changes to the model will work than whether
a new product or technology will catch on.
So what’s the secret?
• How can companies systematically innovate their business models?
• How can executives identify and quantify the value of their changes?
RISK = VALUE New
Product
/service
Experimentation
Prototyping
R&D
Voting & Tastes
But the truth is:

10. In typical case three major factors to design value chain are:
Revenue
+ Cost
Structure + Resource
Velocity
The secret to systematic business model innovation is:
- Identifying where the risks are in your value chain.
- Then determine whether you can reduce them,
shift them to other people, or even assume them
yourself.
Create value by redesigning the business models to
reduce risks.
RISK
VALUE

11. Reducing risks:
Often companies that have lowered their business model risk have done so by delaying
production commitments, transferring risk to other parties, or improving the quality of their
information.
Delaying Production
Commitments
Transferring Risk To
Others Parties
Improving Quality Of
Their Information
R I S K S

12. Delaying production commitments:
- Routine practice: 12 to 18 months production
lead time. Annually 11500 designs (excluding
colors).
- Risks: over stocks or low stocks.
- Solution: speeding up the production
process. Reducing production lead time to 2
or 4 weeks ( 13 to 40 times faster). Closer
production sites, weekly shipments via air.
- Resulting: much easier to keep pace with
consumer preferences.

13. How to improve further:
My In-store Theatre (Dassault Systems retail
solution) VR and AVR systems.
Engage consumers in the bricks & mortar store with
interactive product configuration and
personalization.
Better outcomes:
- To pre sell future productions in advance
virtually.
- To materialize personal customization in their
productions.
- To interactively use consumers in ZARA designs
and developments.
- To sell products anytime, anywhere on any
device.
https://www.3ds.com/industries/consumer-goods-retail/my-retail-theatre/

14. Transferring Risk To Others Parties:
Rewriting your contracts.
- Routine practice: to have 24-7 work force at
call-center which is highly variable and
sometimes unutilized.
- Risks: highly variable work load, sometimes
unutilized work force & sometimes overload.
- Solution: using remote freelance home
located persons with floating time.
- Resulting: pay just for active hours not
unutilized times.

15. How to improve further:
Caped log in Per job charge (KPI bounce).
Not only reduces the unutilized work time but
also:
- System entry cap login makes max work
force entry upon floating load
requirements.
- Per job charge makes utilized time more
efficient.
- KPI improve customers satisfaction level. It
could be done by customers and inspection.

16. Improving the quality of their information:
- Routine practice: produce products, stock
them and then look for their sales.
- Risks: over stocks or low stocks.
- Solution: find out consumers tastes by voting
system and adjust your production line
accordingly.
- Resulting: much easier to keep pace with
consumer preferences and refrain from over
stock or low stock (sales opportunity lost).
Furthermore, it doesn’t need outlet, no
warehouse or complicated distribution/
logistic network requirements.

17. Improving the quality of their information:
Involving designers as another point in this
platform.
- Engaging famous designers and making
limited edition products.
- Coming up creative designs and products.
- Increasing income for all points of business.

18. Adding risks into your business:
- Routine practice: rent the cars to the
customers per day.
- Risks: customers are not satisfied with
unutilized time.
- Solution: to rent the car just per driving hours
and utilized time.
- Resulting: both parties are satisfied since
customer pays just per utilized time including
gas, insurance and the rest also company
charges almost 4 to 6 times more expensive
than the prorated cost at a traditional
companies.

19. Adding risks into your business :
Special facilities for long distance trips.
- Providing special area in roads resting
locations to charge cars free of charge
during journey.
- Creating additional identified footprint and
customers traffic for those specific
locations.
- Offering special discount to their customers.
20% off for Zipcar users

20. Adding risks into your business :
Building risk into business model.
- Company name: Sam Vieira business
development Co.
- Brand name: ISAM
- Business value: not only selling new
brand products but also 2nd hands.
- Delivery type: delivers products to all
around the country by priority post or
Typaks.

21. ESAM
Simple and
powerful
software
Centralized
store
Business StyleAdding risks into your business:
- Routine practice: selling new products by
other online shops such as DIGIKALA.
- Risks: customers are worried how to sell
their used products after sometimes also
about safe transactions.
- Solution: to sell customers new brand
and used products (not new brand) with
the best possible caped price. Also
secure transactions till deal ends safly.
- Resulting: every one company and
customers (buyer and seller) are satisfied
and their transactions done safely.

22. Advantage & challenges of building risk into business:
- New products and services are more costly and difficult.
- Systematic approach.
- Credible understanding of cost and benefits.
- Innovation in finding solution for risks has more benefits
than cost.
- What (risks) that your competitors are running away from
could be your winner card with finding right solution.
- Finding new solutions are better than copying them since
when you copy in order to adopt you should change your
company culture and DNA (it is not yours).
- The right way is to mold your tailor made solution than
copying.
Risk

23. If you really want to steal a march on your rivals, shift
some of the focus that you now put on improving your
products and services to thinking about how you, your
suppliers, and your customers can manage the risks of
the business you conduct together.
The Lesson