The document discusses business model innovation and design. It begins with questions about concerns, opportunities, and expectations around strategic management. It then defines different types of innovation, discusses the importance of business model innovation, and reviews benefits cited by innovators. The remainder of the document focuses on developing a common language and framework for describing, communicating, implementing, measuring, and changing business models through case studies and examples.

1. Management2.0: Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD [email_address] DRAFT VERSION

2. change is the process by which the future invades our lives -> Alvin Toffler

3. first of all: what are YOUR concerns? (buzz groups)

4. what are YOUR biggest issues and fears you face in strategic management today?

5. where do YOU see the largest opportunities to improve strategic management today?

6. your expectations for today?

7. what is innovation?

8. tell me about the most important innovations in your company

9. types of innovation?

10. technology innovation

11. process innovation

12. product & service innovation

13. business model innovation

14. four levels of innovation business model innovation product & service innovation process innovation technology innovation

15. “ Business model innovation matters” and it is a top priority of CEOs

16. Operating Margin Growth in Excess of Competitive Peers compound annual growth rate over five years [Source: IBM, CEOs are expanding the innovation horizon: important implications for CIOs]

17. Benefits Cited by Business Model Innovators percent of respondents [Source: IBM, Global CEO Study 2006]

18. why talk about business models?

19. how do you describe a business model?

20. without a common language

21. how do you communicate a business model?

23. how do you implement a business model?

24. with outdated methods

25. how do you measure the success of a business model?

26. we don’t

27. how do you change a business model and innovate ?

28. we re-invent the wheel

29. what is a business model?

30. VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURE CUSTOMER OFFER FINANCE a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams DISTRIBUTION CHANNELS [Osterwalder (2004) The Business Model Ontology] business model framework

31. case study

32. you become the new owner of a soccer club …

33. describe YOUR club’s business model

34. describing how a wealth management bank acquires its clients what value proposition do you offer, to which customer segments ?

35. VALUE PROPOSITION CUSTOMER SEGMENTS value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMER OFFER what value proposition do you offer, to which customer segments? (model)

36. what value proposition do you offer, to which customer segments? (example) spectacular offensive football fans CUSTOMER OFFER advertising space & high visibility advertisers … …

37. how do you reach your customers ?

38. VALUE PROPOSITION COMMUNICATION & DISTRIBUTION CHANNELS value proposition 1 value proposition 2 … channel 1 channel 2 … OFFER how do you reach your customers? (model) CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER

39. spectacular offensive football stadium & box office CUSTOMER OFFER how do you reach your customers? (example) club owned TV channel fans mobile phone TV advertising space & high visibility sales force advertisers

40. how do you build relationships?

41. VALUE PROPOSITION CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … mechanism 1 mechanism 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER how do you build relationships with your customers? (model)

42. spectacular offensive football personalized website (ticketing) CUSTOMER OFFER team blog (RSS) fans … how do you build relationships with your customers? (example)

43. how do you earn your money with this business model?

44. VALUE PROPOSITION REVENUE STREAMS value proposition 1 value proposition 2 … revenue stream 1 revenue stream 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … FINANCE how do you earn your money with this business model? (model)

45. spectacular offensive football ticket sales FINANCE OFFER TV channel subscriber fees fans mobile phone TV subscriber fees advertising space & high visibility advertising revenues advertisers how do you earn your money with this business model? (example)

46. the big picture (business model)

52. the process of designing a business model

53. the focus of the business modeler

54. user-centered

55. Nokia: Jan Chipchase

56. creativity & exploration

57. Googleplex

58. interdisciplinary approach

59. Grameen Phone Bangladesh

60. holistic design

61. Apple iTunes & iPod

62. strategic fit

63. Amazon.com

64. the business modeler’s toolbox

65. co-creation

66. ideation

67. visualization

68. prototyping

69. the design process

70. 1. identify interdisciplinary stakeholders -> set-up team

71. 2. understand business environment –> frame problem

72. 3. suspend reality -> ideate

73. 4. bring back reality -> prototype

74. 5. chose suitable design -> decide

75. 6. sketch out projects & workload -> draw implementation plan

76. 7. outline key indicators to follow -> choose measures

77. 8. select the right teams and people -> make responsible

78. 9. execute the plan -> manage implementation & change

79. 10. evaluate, learn and redesign -> manage improvement

80. examples

81. to come…

82. feedback for this draft ppt welcome!! [email_address]

84. Alexander Osterwalder, PhD [email_address] www.arvetica.com

85. all photos from Flickr under a creative commons license authors indicated in comment page of ppt

86. When you stop learning, you stop competing. We scan the knowledge universe for you, across disciplines and industries. We transfer the best methods, tools and theory in business to your organization. we build knowledge Change does not happen accidentally it has to be managed. We help you align strategy, people and processes with respect to your organizational culture and values. we manage change Specific problems require specific skills that you do not necessarily dispose of in-house. Through our interdisciplinary network we connect you with leading domain experts. we connect Having a great vision is not sufficient - implementation counts. We help you reconcile long term views with short term actions. We make strategy everyone's job by translating it into pragmatic and prioritized projects. we operationalize Nobody knows your business environment better than yourself. We co-design your strategic vision by building on your knowledge. Through group thinking we find the right answers to the right questions together we co-create

87. annexes

88. annex I business model template

89. VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURE CUSTOMER OFFER FINANCE a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams

90. VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS gives an overall view of a company's bundle of products and services portrays the network of cooperative agreements with other companies describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources explains the relationships a company establishes with its customers sums up the monetary consequences to run a business model describes the revenue streams through which money is earned describes the customers a company wants to offer value to outlines the capabilities required to run a company's business model INFRASTRUCTURE CUSTOMER OFFER FINANCE describing a company’s business model

91. VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER describing a company’s offer

92. VALUE PROPOSITION TARGET CUSTOMER value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing who a company offers value to

93. VALUE PROPOSITION TARGET CUSTOMER DISTRIBUTION CHANNEL value proposition 1 value proposition 2 … distribution channel 1 distribution channel 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing how a company reaches its customers

94. VALUE PROPOSITION TARGET CUSTOMER CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … relationship type 1 relationship type 2 … target customer 1 target customer 2 … CUSTOMER OFFER describing the relationships a company builds

95. TARGET CUSTOMER REVENUE STREAM revenue stream 1 revenue stream 2 … target customer 1 target customer 2 … FINANCE VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER CUSTOMER describing how a company makes money

96. CORE CAPABILITIES VALUE PROPOSITION core capability 1 core capability 2 … value proposition 1 value proposition 2 … OFFER INFRASTRUCTURE describing what capabilities are required

97. describing what activities are required VALUE PROPOSITION VALUE CONFIGURATION CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … activity 1 activity 2 … INFRASTRUCTURE OFFER

98. describing the partners that leverage the business model VALUE PROPOSITION PARTNER NETWORK CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … partner 1 partner 2 … INFRASTRUCTURE OFFER

99. VALUE PROPOSITION COST STRUCTURE cost account 1 cost account 2 … value proposition 1 value proposition 2 … FINANCE INFRASTRUCTURE OFFER describing the costs of a business model CORE CAPABILITIES core capability 1 core capability 2 …

100. annex ii other