These slides are part I of 2 parts presentation about Business Model. I n this part I present the business model definition, well-known business model patterns. Examples about each patterns is provided as well.

1. S
Business Models –
Patterns & Examples
Part I
Ahmed Taha
May 2015

2. Agenda
S Business Model
S Descriptions
S Business Model Patterns
S Unbundling business models
S Long tail
S Multi-Sided Platform
S Free Business Model
S Open Business Model

3. Business Model
S Definition:
S A business model describes the rationale of how an
organization creates, delivers, and captures value
S It is the way a business or a product monetize the
value it deliver.

4. Business Model Canvas

5. Business Model Patterns
S There is no right or wrong. Just make sure your offer or
product fit the business model.
S You can invent your own pattern.
S Famous Patterns
S Unbundling business models
S Long tail
S Multi-Sided Platform
S Free Business Model
S Open Business Model

6. Unbundling business models
S Divide business into separate entities to focus and avoid
conflicts.
S Business entities can be
S Product Innovation department
S Innovation and Employee centered
S Infrastructure Management
S Cost mentality
S Customer relationship management
S Customer comes first.

7. Example
S Swiss Private Banking Mentality
S Focus on the wealthy, giving them advice. (relationship based
business)
S They want to keep everything in house for secrecy.
S Today Environment
S Outsourcing is attractive, cheaper
S Laws against total banking secrecy
S Clients are interested in best offer regardless of origin
S Product Innovation is driven by speed and quick market entry

8. Example
S Maerki Baumann
S Unbundle its core business
S Customer relationship and advisory
S Incore Bank, offer banking services to other banks
S Geneva-based Pictet
S Largest swiss private bank
S 200 years old
S Remains integrated

9. Long Tail
S Offering a large number of niche products.
S Selling less of more.

10. Long Tail – Example 1
S Book Publishing Mentality
S Work only with known authors
S Print and publish well known best sellers with high
estimated demand.
S Lulu.com
S Anyone can publish
S Printing is done after book order

11. Long Tail – Example 1

12. Long Tail – Example 2
S Lego interlocking bricks
S Variety of themes
S Competitions becomes tough with new entries
S Lego started user-generated content
S Users can use Lego Digital designer to create their own
theme.

13. Long Tail – Example 2

14. Multi-Sided Platform
S Bring two distinct customer groups together
S Business has two segments A,B. The existence of one
segment without the other makes no profit.
S Both segments pay.
S Google- AdSense
S Website owners
S Advertisers

15. Multi-Sided - Example
S PSP / XBOX/ Wii
S Segment A
S PSP / XBOX target hardcore gamers
S Wii target causal gamers
S Segment B
S Game developers

16. Multi-Sided - Example
PSP / XBOX Wii
Target gamers Hardcore gamers Casual Gamers
Revenue Stream Game players Both game players and
developers
Price Range High Low
Game quality Very sophisticated Motion controlled and
fun factor
Game developers Licensed game
manufacturers like EA-
sport.
Royalty from game
developers

17. Multi-Sided - Example
S Apple – iTunes
S Songs and album maker
S Song and music listeners

18. Free business Model
S Another form of Multi-sided Business Model
S One segment is lured with the free service
S The other segment pay for the service

19. Free business Model -
Example
S Google - Adwords
S Search users
S Advertisers
S Skype
S Free users online Voice calls
S Premium users pay for VOP though wholesale carriers

20. Bait and Hoot
S Bait and Hoot another form of free
business model
S Customers start as Free user and
then encourage to make purchases
S Gillette sold razor handles at steep
discount or even for free, to create
demand on disposable blades

21. Bait and Hoot - Example
S Apple
S Offer Free iPhone
S Obligated with mobile operator for
two years contract

22. Open business Model
S Collaborating with external parties
S Using service from external companies
S Provide help to external parties
S Provide service to external companies

23. Open business Model -
Example
S Procter and Gamble
S Instead of spending more on R&D
S “Connect and develop” strategy
S Exploiting research through external partners

24. Open business Model -
Example
S InnoCentive originally part of Eli Lilly
S Now InnoCentive is an independent business that
connects
S Organizations that need research resources
S With Researchers around the world

25. Reference
S http://www.reddit.com/r/explainlikeimfive/comments/1ggl1b/eli5_how_do_apps_like_i
nstagram_and_vine_make/
S http://bmimatters.com/
S http://knowledge.wharton.upenn.edu/article/how-instagram-can-make-money-
without-alienating-users/
S https://www.linkedin.com/pulse/20140331143635-39873847-social-media-
landscape-business-models-5-10
S http://techcrunch.com/2013/06/12/king-quits-advertising-since-it-earns-so-much-on-
candy-crush-purchases/
S http://www.businessinsider.com/zynga-revenue-analysis-2011-9

26. About Me
S Software Engineer, Co-founder of Inova LLC , TA at Alexandria
University
S Website : www.ahmed-taha.com
S LinkedIn: eg.linkedin.com/in/ahmdalitaha
S Twitter : www.twitter.com/ahmdalitaha
S Email : ahmed.taha@inovaeg.com