Innovation by Business Model Design

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  • Business

    model

    design

    INNOVATION BY BUSINESS MODEL DESIGN

    Ott Werschitzowerschitz@outlook.com

  • Business

    model

    designBusiness Model Basics

    Business Model definition

    recent phenomenon

    linked to the rise of internet based services(but applicable not only for that)

    various definitions - some of them confusing

  • Business

    model

    designBusiness Model Basics

    Business Model definition

    The rationale of how an organisation creates, delivers and captures value

    (Alexander Osterwalder)

  • Business

    model

    designBusiness Model Basics

    Relationship with strategy

    As 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 money

    Source: Alexander Osterwalder the Business Model Ontology. A proposition in a

    design sciene approach

  • Business

    model

    designBusiness Model Canvas

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    The Businesss Model consists of the above nine building blocks.

    Source: Business Model Generation by Alexander Osterwalder & Ives Pigneur

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    one or several segments

    users versus customers

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    product(s) and/or service(s)

    same or different for various segments

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    personal / automated

    communities not only online

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    for communication, distribution or sales / after-sales (service)

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    Can be different types for different segments

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    What resources can make us better / different regarding our VP, CR, CH or RS?

    Can be human, intellectual, tangible or financial

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    What activities can make us better / different regarding our VP, CR, CH or RS?

    Manufacturing, service provisioning, some problem solving ability

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    Who provides our key resouces / activities

  • Business

    model

    designBM Canvas Building Blocks

    Customer

    Segments

    Customer

    Relationships

    Channels

    Value

    Propositions

    Key

    Resources

    Key Activities

    Key

    Partnerships

    Cost Structure Revenue Streams

    most imporant cost elements

    possibility of reducing or avoiding costs

  • Business

    model

    designBusiness Model Canvas

    Not a replacement of

    marketing, business strategy, or other techniques, methods

    It integrates the above or other previous business school knowledge

    It can be useful with as part of the Lean Startupmethod.

  • Business

    model

    designExample: Waze

    Value Prop.

    1.Route and

    traffic

    information

    2.Advertising

    3.Beacons

    Real-time data

    Customers

    1. a) Drivers,

    travellers

    b) Munici-

    palities,

    transportation

    companies

    c) media

    2. Advertisers

    3. Tunner

    operators

    Cust. Rel.

    1. (mobile) web

    based

    community

    2. CCP

    Channels

    1. Own web

    page based

    sales and

    support

    Key Partners

    1.Drivers

    2.CCP

    3.Map editors

    Revenues

    1.Advertising fees

    2.Beacon sales

    Key Resources

    1. Platform &

    mobile apps

    2. Live map

    3. Brand

    Key Activities

    1. Platform / app

    development

    2. Community /

    partnership

    building

    Costs

    1.Platform operations

    2.New product development?

    3.No license for maps, traffic or other information

    Synergies with Google are not considered here.CCP Connected Citizen Program

  • Business

    model

    designBusiness Model Innovation

    can come from any of the building blocks

    Customer driven

    Offer driven

    Resource driven

    Finance driven

    Transformative Business Models

    innovating several building blocks

  • Business

    model

    designBusiness 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, Tesla

  • Business

    model

    designExample: Lego Education

    Value Prop.

    Various bricks,

    theme sets inlc.

    movie

    characters, etc.

    Customers

    Families

    (parents, kids)

    Cust. Rel.Internet Lego

    Ideas community,

    web games,

    Mobile app

    Lego Life,

    Legoland

    ChannelsDistributors,

    Shops, Web shop

    Key Partners

    Licensors,

    Legoland,

    Franchise

    (Merlin

    Entertainment)

    Revenues

    Product sales, Legoland

    revenues

    Key Resources

    Brand, Licenses

    (e.g. Star Wars)

    Key Activities

    Product Develop.,

    Licensing,

    Community Build.

    Costs

    Production, licensing, marketing

    New offer (value proposition) drives the extendingof the business model

    Lego bricks

    plus software

    based methods

    for math,

    science,

    language and

    computer

    programming

    Pre-school,

    school, middle

    school pupils

    Teachers and

    education

    professionals

    Specialised

    distributors

    (hdidakt)

    Dedicated brand,

    Complex products

    Different PD methods,

    engaging edu.

    institutions

    Funding sources

    Teachers &

    Professors

    providing

    feedback

    Completely new product R&D related costs, dedicated

    brand building / marketing Product sales, assisting funding

    support

    Trade shows, conferences, demo days

  • Business

    model

    designExample: Tesla

    Value Prop.

    High quality

    electric car,

    status symbol

    Long battery

    service time

    Autonomous

    driving features

    Supercharger

    network

    Solar panels +

    Powerball home

    batteries

    Customers

    B2C:

    Drivers seeking

    status symbol

    Early adopters

    of e-car

    technology

    Solar home

    electricity users

    B2B: car

    manufacturers

    Cust. Rel.

    Web and blog inlc.

    Posts by Elon Musk

    Conventional

    promotions (e.g.

    test drives)

    Channels

    Online marketing

    Showrooms

    Key Partners

    Key technology

    suppliers, e.g.

    autopilot, co-

    operation with

    Panasonic for

    batteries

    Governments &

    regulators for

    supporting and

    subsidising e-car

    usage

    Revenues

    1. Car and home solar system

    sales (B2C)

    2. Technology licensing (B2B)

    Key Resources

    Automotive R&D

    Battery

    manufacturing

    Supercharger

    network

    Key Activities

    Car design for

    advanced technologies

    Charger NW

    maintenance

    Educating customers

    Costs

    Battery & car R&D

    Manufacturing

    Operating Supercharging stations & Financing

    Supercharging allowance to customers

    Brand/Communication + Battery management + Supercharging + Industry co-operationWith the help of whateventure.com

  • Business

    model

    designHow To Create Business Models

    brainstorming

    what if questions

    using customer insights

    Ideation

  • Business

    model

    designHow To Create Business Models

    1. Sketch on canvas

    2. Business Plan incl. financial modelling

    3. Field TestPrototyping

  • Business

    model

    designAnalysis and Evaluation

    SWOT

    Of the BM as a whole

    Of each building block

  • Business

    model

    design

    Thank you!

    Ott Werschitzowerschitz@outlook.com