Slide 1: how to identify and improve it La Trobe University, Melbourne, July 2007 Your Business Model
Slide 2: what’s on the menu today?
Slide 3: the alchemy of business model innovation
Slide 4: first: what are your expectations for today?
Slide 5: example of business model innovation
Slide 6: waste water treatment systems
Slide 7: waste water treatment offer system distribution sales force channel Canadian customer mining segment sites revenue one time stream sales fee
Slide 8: idea!
Slide 9: total waste water sell waste water treatment treatment system management sales force Canadian mining sites recurring one time servicefee sales fee
Slide 11: let’s do an exercise to understand
Slide 12: offers distribution channels client segments consulting your offers personal your channels network banking your client executives segments banking knowledge dedicated website banking professionals training program
Slide 13: partner suppliers network sell waste water treatment system client follow-up relationship water core treatment capabilities knowledge build treatment core activities systems sales force Canadian mining sites production costs costs one time sales fee
Slide 14: suppliers follow-up call center water error free treatment systems knowledge development build dispatch treatment repair teams systems total waste water treatment management sales force Canadian mining sites variable costs production of repair costs services recurring service fee
Slide 15: business model template INFRASTRUCTURE CORE CAPABILITIES PARTNER NETWORK OFFER VALUE PROPOSITION CUSTOMER RELATIONSHIP CUSTOMER TARGET CUSTOMER VALUE CONFIGURATION DISTRIBUTION CHANNEL COST STRUCTURE FINANCE REVENUE STREAMS http://business-model-design.blogspot.com
Slide 16: the basics of identifying and improving business models
Slide 17: 1. describe it 2. discuss it 3. improve it 4. implement it
Slide 18: 1. describe it
Slide 19: 1% Strategy 18% Text  Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper, risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felis pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec diam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod. Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor. Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibus vulputate. Proin dignissim eros at augue. 12%  Text Development plan  Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulum condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae purus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque. Text 300% Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci. Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem. Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat. we don’t really know how to Words
Slide 20: 2. discuss it
Slide 21: but there is no common language
Slide 22: 3. improve it
Slide 23: we don’t really have the tools
Slide 24: 4. implement it
Slide 25: Here Ok Here CEOs 10° Managers 60° everything else than planned Staff 360°
Slide 26: challenge main the
Slide 27: think outside-of-the box
Slide 28: “ insanity: doing the same thing over and over again and expecting different results Albert Einstein ”
Slide 29: enabling business model innovation
Slide 30: user-centered
Slide 31: creativity & exploration
Slide 32: interdisciplinary approach
Slide 33: strategic fit
Slide 34: more examples
Slide 35: what’s the connection?
Slide 36: partners client relationship precision microengineering activities mechanical joints watches channels luxury patients buyers costs revenue streams
Slide 37: Cemex example
Slide 38: partners client relationship on time core competencies delivery fleet activities management cement delivered cement by during time cubic meter window channels builders costs revenue streams
Slide 39: the business model design process
Slide 40: 1. identify interdisciplinary stakeholders -> set-up team
Slide 41: 2. understand (business) environment –> frame problem
Slide 42: 3. suspend reality -> ideate
Slide 43: 4. bring back reality -> prototype
Slide 44: 5. chose suitable design -> decide
Slide 45: 6. execute -> project portfolio
Slide 46: 7. evaluate, learn and redesign -> manage improvement
Slide 48: Alexander Osterwalder, PhD alex@arvetica.com www.arvetica.com
Slide 49: all photos from Flickr under a creative commons license authors indicated in comment page of ppt
Slide 50: annex I other
Slide 51: the business modeler’s toolbox
Slide 52: co-creation
Slide 53: ideation
Slide 54: visualization
Slide 55: prototyping
Slide 56: some examples
Slide 57: Goldcorp “geology prize” 500’000 $US mining research DISTRIBUTION CHANNELS CUSTOMER RELATIONSHIPS exploiting mines CUSTOMER SEGMENTS low costs through open exploration REVENUE STREAMS Goldcorp publicly shared all of its geological data and offered US$ 500’000 in prizes for determining where they might find the next 6 million ounces of gold
Slide 59: from copyright to creative commons
Slide 60: Skype “eBay” deliver voice & video quality free VoIP & value added services website global (non segmented) internet software development software development large scale low margin free voice-over-IP VoIP telephony & value-added services
Slide 61: 1291 Cityhomes young curious Swiss apartment owners low-cost hotel/rental in New York City CUSTOMER RELATIONSHIPS keep down costs find demand renting out rooms low cost accommodation New York DISTRIBUTION CHANNELS the cost sensible low cost rents
Slide 62: Tecnovate “import” young curious Europeans to India to work CUSTOMER RELATIONSHIPS keep down costs ACTIVITY CONFIGURATION low-cost multilingual call center outsourcing DISTRIBUTION CHANNELS European corporations low cost REVENUE STREAMS business process outsourcing “up-side down” in India
Slide 63: from bloated head to the long tail
Slide 64: INFRASTRUCTURE CORE CAPABILITIES PARTNER NETWORK CUSTOMER RELATIONSHIP CUSTOMER increasing the number of mobile phone users with the right profile to increase the value for advertisers mobile network operator that “rents out” capacity to Blyk OFFER VALUE PROPOSITION regular ad messages via mobile phone TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION FREE advertising supported mobile telephony access to a pool of targeted young advertising public the young and the hip advertisers finding and contracting advertisers marketing to mobile users with an interesting advertising profile subscribers fill out profile on the Internet sales force marketing COST STRUCTURE FINANCE paying mobile phone minutes advertising fees REVENUE STREAMS
Slide 65: annex II business model template
Slide 66: INFRASTRUCTURE CORE CAPABILITIES PARTNER NETWORK OFFER VALUE PROPOSITION CUSTOMER RELATIONSHIP CUSTOMER TARGET CUSTOMER VALUE CONFIGURATION DISTRIBUTION CHANNEL COST STRUCTURE FINANCE REVENUE STREAMS 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
Slide 67: describing a company’s business model INFRASTRUCTURE CORE CAPABILITIES outlines the capabilities required to run a company's business model PARTNER NETWORK OFFER portrays the network of cooperative agreements with other companies CUSTOMER RELATIONSHIP explains the relationships a company establishes with its customers CUSTOMER TARGET CUSTOMER describes the customers a company wants to offer value to VALUE PROPOSITION VALUE CONFIGURATION describes the arrangement of activities and resources gives an overall view of a company's bundle of products and services DISTRIBUTION CHANNEL describes the channels to communicate and get in touch with customers sums up the monetary consequences to run a business model COST STRUCTURE FINANCE REVENUE STREAMS describes the revenue streams through which money is earned
Slide 68: describing a company’s offer OFFER VALUE PROPOSITION value proposition 1 value proposition 2 …
Slide 69: describing who a company offers value to OFFER VALUE PROPOSITION CUSTOMER TARGET CUSTOMER value proposition 1 value proposition 2 … target customer 1 target customer 2 …
Slide 70: describing how a company reaches its customers OFFER VALUE PROPOSITION CUSTOMER DISTRIBUTION CHANNEL TARGET CUSTOMER value proposition 1 value proposition 2 … distribution channel 1 distribution channel 2 … target customer 1 target customer 2 …
Slide 71: describing the relationships a company builds OFFER VALUE PROPOSITION CUSTOMER CUSTOMER RELATIONSHIP TARGET CUSTOMER value proposition 1 value proposition 2 … relationship type 1 relationship type 2 … target customer 1 target customer 2 …
Slide 72: describing how a company makes money OFFER VALUE PROPOSITION FINANCE REVENUE STREAM CUSTOMER TARGET CUSTOMER value proposition 1 value proposition 2 … revenue stream 1 revenue stream 2 … target customer 1 target customer 2 …
Slide 73: describing what capabilities are required INFRASTRUCTURE CORE CAPABILITIES OFFER VALUE PROPOSITION core capability 1 core capability 2 … value proposition 1 value proposition 2 …
Slide 74: describing what activities are required INFRASTRUCTURE CORE CAPABILITIES VALUE CONFIGURATION OFFER VALUE PROPOSITION core capability 1 core capability 2 … activity 1 activity 2 … value proposition 1 value proposition 2 …
Slide 75: describing the partners that leverage the business model INFRASTRUCTURE CORE CAPABILITIES PARTNER NETWORK OFFER VALUE PROPOSITION core capability 1 core capability 2 … partner 1 partner 2 … value proposition 1 value proposition 2 …
Slide 76: describing the costs of a business model INFRASTRUCTURE CORE CAPABILITIES FINANCE COST STRUCTURE OFFER VALUE PROPOSITION core capability 1 core capability 2 … cost account 1 cost account 2 … value proposition 1 value proposition 2 …