CCT 355: E-Business Technologies

Class 7: Business Model Generation

Administration

• Case study returned at break – thoughts• Hand in change management simulation• Groups for final project – proposal to keep you

on track due next week (more of a brainstorming/notes document than anything formal)

Business and Design

• Martin’s notion of design thinking – design as the new value add

• Pink – in an age of abundance, automation and Asia (alliteration!) designing for want, not need, is key

• MFAs as the new MBA?• Florida – creative class careers essential for a

vibrant economy – creative class as global, interconnected, mobile, diverse (e.g., Florida’s “gay hypothesis”)

Business Model Generation

• Some core notions of business concepts are still important

• Nine core components noted in book• All impacted by changes in technology –

changes in one iterate among others – model as systemic vs. isolated units

• History of book – crowdsourced model with many

Customer Segments

• For whom are we creating value? Who are our most important customers?

• Mass and niche markets• Segmentation and diversification

Value Propositions

• What value do we offer? What problems are we trying to solve?

• Range of options – newness, performance, customizability, design/usability, status, price, risk reduction, etc.

• Whatever the decision is focuses the business’ direction – should tie to customer segments

Channels

• Linking value proposition to customer segments

• How are channels integrated? Which work best?

• Channel phases – awareness, evaluation, purchase, delivery, after sales support

• Outsourced or in-house?

Customer Relationships

• Expectations and management of relationship • What’s established? At what cost? • From “high touch” services and communities

to automated/self-service – different demands and expectations

Revenue Streams

• How much are customers willing to pay? • How do streams combine into overall revenue?• Different models exist – sale of tangible goods,

usage fee, subscriptions, licensing, brokerage fees, advertising, etc.

• Dependent on existing revenue stream practices – hard to monetize something that’s free elsewhere!

Key Resources

• What resources are required to meet value propositions? Distribution? Revenue streams? Relationships?

• Physical, intellectual, human and financial resources

Key Activities

• What actions realize value propositions?• Production, problem solving,

networking/connections, etc • Efficiency and effectiveness of activities

towards key value propositions

Key Partnerships

• Who are are partners/suppliers? How does their model mesh with us?

• Strategic alliances, “cooptition”, joint ventures, established relationships (and exclusivity)

• Concerns about scale and risk

Cost Structure

• What are the most important costs involved? • Which resources are the most valuable? • Fixed/variable costs and economics of scale• Cost or value driven? Transactional and

resource-based models of business

Patterns, Design, Strategy, Process

• Different patterns are evident in mix of core nine components

• These patterns are not accidental, but rather designed – many core components of design thinking come into play

• Business model (re)generation – very similar in kind to change management process – change causes concern in many domains that needs to be addressed

Weekly Assignment

• A brick and mortar specialty chocolate store abandons its storefront and moves to online sales

• What changes in the nine core components might occur?

• (Obviously you can take the week on this one…no right answer, just point form notes will do.)