Innovation by Business Model Design

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    23-Jan-2018

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Business modeldesignINNOVATION BY BUSINESS MODEL DESIGNOtt Werschitzowerschitz@outlook.comBusiness modeldesignBusiness Model BasicsBusiness Model definition recent phenomenon linked to the rise of internet based services(but applicable not only for that) various definitions - some of them confusingBusiness modeldesignBusiness Model BasicsBusiness Model definitionThe rationale of how an organisation creates, delivers and captures value(Alexander Osterwalder)Business modeldesignBusiness Model BasicsRelationship with strategyAs glue between business strategy and processes, it is the translation of a company's strategy into a blueprint of the company's logic of earning moneySource: Alexander Osterwalder the Business Model Ontology. A proposition in a design sciene approachBusiness modeldesignBusiness Model CanvasCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue StreamsThe Businesss Model consists of the above nine building blocks.Source: Business Model Generation by Alexander Osterwalder & Ives PigneurBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streamsone or several segmentsusers versus customersBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streamsproduct(s) and/or service(s)same or different for various segmentsBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streamspersonal / automatedcommunities not only onlineBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streamsfor communication, distribution or sales / after-sales (service)Business modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue StreamsCan be different types for different segmentsBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streams What resources can make us better / different regarding our VP, CR, CH or RS? Can be human, intellectual, tangible or financialBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streams What activities can make us better / different regarding our VP, CR, CH or RS? Manufacturing, service provisioning, some problem solving abilityBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue StreamsWho provides our key resouces / activitiesBusiness modeldesignBM Canvas Building BlocksCustomer SegmentsCustomer RelationshipsChannelsValue PropositionsKey ResourcesKey ActivitiesKey PartnershipsCost Structure Revenue Streamsmost imporant cost elementspossibility of reducing or avoiding costsBusiness modeldesignBusiness Model CanvasNot a replacement of marketing, business strategy, or other techniques, methodsIt integrates the above or other previous business school knowledgeIt can be useful with as part of the Lean Startupmethod.Business modeldesignExample: WazeValue Prop.1.Route and trafficinformation2.Advertising3.BeaconsReal-time dataCustomers1. a) Drivers, travellersb) Munici-palities, transportationcompaniesc) media2. Advertisers3. TunneroperatorsCust. Rel.1. (mobile) web basedcommunity2. CCPChannels1. Own web page basedsales and supportKey Partners1.Drivers2.CCP3.Map editorsRevenues1.Advertising fees2.Beacon salesKey Resources1. Platform &mobile apps2. Live map3. BrandKey Activities1. Platform / appdevelopment2. Community /partnershipbuildingCosts1.Platform operations2.New product development?3.No license for maps, traffic or other informationSynergies with Google are not considered here.CCP Connected Citizen ProgramBusiness modeldesignBusiness Model Innovationcan come from any of the building blocks Customer driven Offer driven Resource driven Finance drivenTransformative Business Modelsinnovating several building blocks Business modeldesignBusiness Model Innovation Customer driven: targeting previously unserved segments -m-pesa by Vodafone in Africa Offer driven: new offer requiring the re-designing of thebusiness model - Lego Education Resource driven: using existing resources for new productdevelopment - Amazon Web Services Finance driven: new revenue streams, pricing mechanisms orreduced cost structure is the source of innovation - carsharing (Mercedes car2go, GreenGo) Transformative IKEA, TeslaBusiness modeldesignExample: Lego EducationValue Prop.Various bricks, theme sets inlc. moviecharacters, etc. CustomersFamilies(parents, kids)Cust. Rel.Internet LegoIdeas community, web games, Mobile app Lego Life, LegolandChannelsDistributors, Shops, Web shopKey PartnersLicensors, Legoland, Franchise (Merlin Entertainment)RevenuesProduct sales, LegolandrevenuesKey ResourcesBrand, Licenses(e.g. Star Wars)Key ActivitiesProduct Develop., Licensing,Community Build.CostsProduction, licensing, marketingNew offer (value proposition) drives the extendingof the business modelLego bricksplus software based methodsfor math, science, language and computer programmingPre-school, school, middleschool pupilsTeachers and educationprofessionalsSpecialiseddistributors(hdidakt)Dedicated brand, Complex productsDifferent PD methods, engaging edu. institutionsFunding sourcesTeachers & ProfessorsprovidingfeedbackCompletely new product R&D related costs, dedicatedbrand building / marketing Product sales, assisting fundingsupportTrade shows, conferences, demo daysBusiness modeldesignExample: TeslaValue Prop.High qualityelectric car, status symbolLong batteryservice timeAutonomousdriving featuresSuperchargernetworkSolar panels + Powerball homebatteriesCustomersB2C: Drivers seekingstatus symbol Early adoptersof e-cartechnology Solar homeelectricity usersB2B: carmanufacturersCust. Rel.Web and blog inlc. Posts by Elon MuskConventionalpromotions (e.g. test drives)ChannelsOnline marketingShowroomsKey PartnersKey technologysuppliers, e.g. autopilot, co-operation withPanasonic forbatteriesGovernments & regulators forsupporting and subsidising e-carusageRevenues1. Car and home solar systemsales (B2C)2. Technology licensing (B2B)Key ResourcesAutomotive R&DBatterymanufacturingSuperchargernetworkKey ActivitiesCar design foradvanced technologiesCharger NW maintenanceEducating customersCostsBattery & car R&DManufacturingOperating Supercharging stations & FinancingSupercharging allowance to customersBrand/Communication + Battery management + Supercharging + Industry co-operationWith the help of whateventure.comBusiness modeldesignHow To Create Business Models brainstorming what if questions using customer insightsIdeationBusiness modeldesignHow To Create Business Models1. Sketch on canvas2. Business Plan incl. financial modelling3. Field TestPrototypingBusiness modeldesignAnalysis and EvaluationSWOT Of the BM as a whole Of each building blockBusiness modeldesignThank you!Ott Werschitzowerschitz@outlook.com