Upload
blackcyrano
View
217
Download
0
Embed Size (px)
Citation preview
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
1/42
BUSI660: Business Models
Prof. Brent GoldfarbRobert H. Smith School
of Business
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
2/42
Lesson Plan Intro
Project Better Place Value Chains
Experiments
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
3/42
QuestionsAddressed
Where do great entrepreneurial
ideas come from? Is an idea worth pursuing?
Economically? Strategically?
How do you get support for a newventure?
How do you improve an idea?
How do you help a new venturegrow?
Business Models(Early Focus)
EntrepreneurialToolkit(Later Focus)
Today
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
4/42
Business ModelDevelopment
InitialIdea
AnalyzeIdea
ImproveIdea
Pursue
Business Models:Economics and Strategy
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
5/42
Part I: Business Model Economics Lecturette recap
20 min
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
6/42
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
7/42
Business ModelEconomicAnalysisTakeaways
Ventures generally a few critical
success factors that drive profits Fishbone analysis helps identify
Ventures often have multipleofferings / activities
Relative profitability not alwaysintuitive
Analysis helps target efforts & selectpricing schemes
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
8/42
Why the price difference?
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
9/42
Music IndustryValue Chain
Creation
Discovery Labels
Distribution CDs
Manufacturing
Stores
Consumption
Device
Liveperformances
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
10/42
Music IndustryValue Chain
Creation
Discovery Labels
Distribution iTunes
Consumption
iPod
Live performances
Creation
Discovery
Distribution
Live performances
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
11/42
Revenue: ~$8BProfit: ~$1.2B
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
12/42
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
13/42
$1.375B
# Customers
47m
Value/Customer
$25.2+$4=$29.2
Songs
$4
# songs: 40
Revenue/Song
$0.1
Hardwarevalue/customer
$25.2
iPod/Customer
1.2
Value of iPod
$21
iPod Fishbone
(sketch)
I t t T ffi
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
14/42
Internet Traffic
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
15/42
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
16/42
Kodak?
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
17/42
Part II: Project Better Place
Business Model Economics
90 minutes
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
18/42
Project BetterPlace
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
19/42
Revenge of the Electric Car:Trailer
http://youtu.be/VR3oLV4fdcEhttp://smithinisrael.blogspot.com/search/label/better%20place
http://smithinisrael.blogspot.com/search/label/better%20placehttp://smithinisrael.blogspot.com/search/label/better%20placehttp://smithinisrael.blogspot.com/search/label/better%20placehttp://smithinisrael.blogspot.com/search/label/better%20placehttp://smithinisrael.blogspot.com/search/label/better%20placehttp://smithinisrael.blogspot.com/search/label/better%20place7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
20/42
PBPQuestions
Where would you invest and why?
Take vote
Transportation Industry
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
21/42
Transportation Industry
C I d t
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
22/42
Car Industry
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
23/42
MSRP Ford Fusion: 2010 + Mileage
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
24/42
What is the mostimportant barrier toadoption of EVs?
1. Battery technology (i.e., range per cost, charging time)
2. Performance (i.e., HP, acceleration)
3. Infrastructure (i.e., charging and service)
4. Cost (i.e., acquisition, life cycle)5. Model type availability (i.e., nothing suits me)
6. Uncertainty (i.e., early adopter?)
Comparison
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
25/42
ComparisonChart
Issue BaselineICE
Hybrid PHEV EV BP / EV
RangeAnxiety
n/a n/a n/a High n/a
Number ofGas StationVisits
No Change(3x/month)
Few(
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
26/42
PBPQuestions
Q1) What is the businessmodel?
BP B i
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
27/42
BP BusinessModel
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
28/42
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
29/42
Part III: Investment & Technological Systems
t I d t
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
30/42
uto IndustryValue Chain
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
31/42
Internal Combustion AutosProduction IC Engine
Gearing Fuel delivery
Fuel delivery Gas tank Gas delivery
Other systems
Energy Dist Gas Station
Distribute Refine Extract Explore
Maintenance Parts Labor Warranty
Roads &Parking Construction Maintenance Financing
Govt Private
Legal LegislationAdministration Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans
Traditional model
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
32/42
Traditional model
Internal Combustion AutosProduction IC Engine
Gearing Fuel delivery
Fuel delivery Gas tank Gas delivery
Other systems
Energy Dist Gas Station
Distribute Refine Extract Explore
Maintenance Parts Labor Warranty
Roads &Parking Construction Maintenance Financing
Govt Private
Legal LegislationAdministration Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans
e g Prius
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
33/42
e.g., Prius
HybridProduction Power Source
IC Engine Gearing Fuel delivery
Electric Motor Power source
integration Fuel delivery
Gas tank Gas delivery
Batteries
Other systems
Energy Dist Gas Station
Distribute Refine Extract Explore
Maintenance Parts Labor Warranty
Roads &Parking Construction Maintenance Financing
Govt Private
Legal Legislation
Tax Incentives Efficiency
regulationsAdministration Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans
Chevy Volt
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
34/42
Chevy Volt
Plug-in HybridProduction Power Source
IC Engine Gearing Fuel delivery
Electric Motor Power source
integration Fuel delivery
Gas tank Gas delivery
Batteries
Other systems
Energy Dist Gas Station
Distribute Refine Extract Explore
Charge points Local
electricalinfrastructure
Grid
Maintenance Parts Labor Warranty
Roads &Parking Construction Maintenance Financing
Govt Private
Legal Legislation
Tax Incentivs Efficiency
regulations R&D
SubsidiesAdministration Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans
Nissan Leaf / Tesla
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
35/42
Nissan Leaf / Tesla
Electric CarProduction Power Source
Electric Motor Batteries
(Harder) Other systems
(Simpler)
Energy Dist Charge points
Local
electricalinfrastructure
Grid
BatteryProduction
Maintenance Parts Labor Warranty Battery life?
Roads &Parking Construction Maintenance Financing
Govt Private
ChargingInfrastructure
Legal Legislation
Tax Incentives Efficiency
regulations R&D
Subsidies Charging
Infrastructure Public?
Private?Administration
Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans
Project Better Place
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
36/42
Project Better Place
Electric CarProduction Power Source
Electric Motor Batteries
(Harder) Other systems
(Simpler)
Energy Dist Charge points
Local
electricalinfrastructure
Grid
BatteryProduction
Maintenance Parts Labor Warranty Battery life?
Roads &Parking Construction Maintenance Financing
Govt Private
ChargingInfrastructure
Legal Legislation
Tax Incentives Efficiency
regulations R&D
Subsidies Charging
Infrastructure Public?
Private?Administration
Enforcement
InsuranceAccident Breakdown
Finance Leasing Loans Battery
Financing
PBP
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
37/42
PBPQuestions
Do you want to change your vote?
The Electric Car: The Major Players (SM-175)
1. Has the time for EVs finally arrived? If yes, what factorshave led us to the transition from internal combustion tothe electric car? If no, what challenges will have to beovercome before successful mass adoption of EVs? Listthe three most significant barriers to adoption in order of
importance.
2. Comparing the various groups of firms described in thecase (i.e., incumbent manufacturers, startups, batterymakers, etc.), which group is best placed to succeed inthe automotive market? Why? Again, list the three mostsignificant factors informing your choice in order ofimportance.
3. If you had $1 to invest in any one of the companiesdescribed in the case, which one would you invest in?
Discussion
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
38/42
Discussion Where would you invest $100k?
$1m? $10m? $100m?
Battery electric vehicle (i.e., Tesla) Incumbent EREV / PHEV (i.e., GM /
Toyota)
Service system (i.e., Better Place,v2g)
Other (i.e., TIPS, t-bills) What are the competing business
models?
How does each model create and
capture value? What are the threats to each
business model?
Quotes
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
39/42
Quotes GMs plan is ambitious since the Volts viability
is dependent on the availability of a suitablebattery technology.(Economist , Aug 2008)
We want to see if we can find a radicallydifferent battery technology.IBMs R&D Manager on thecompanys effort for a battery breakthrough (BusinessWeek Online, June 2009)
GM is at least one generation behind Toyota
on advanced,green
powertrain development.
US Treasury departments Auto Task Force in its appraisal (Fortune, April2009)
We have been looking at the concept of theelectric car all wrong; it isnt just a product itsa service. - Shai Agassi, Founder of BetterPlace (Macleans April 2008)
Takeaways
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
40/42
Takeaways
???
Takeaways
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
41/42
Takeaways
Business Models vary across andwithin industries
Value comes from creating andcontrolling scarce resources
Not every part of the solution
generates profits
For your projects
7/31/2019 BUSI 660 - Business Models Economics - Better Place -DIST
42/42
y p j
Where does your business fall inthe value chain?
What are the mechanics of valuecreation
What is your key metric?