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Business Model Innovation in Business-to-Business
Markets - Procedure and Examples
Daniel R.A. Schallmo, MBA
Prof. Dr. Leo Brecht

Helmholtzstraße 22
89081 Ulm, Germany
Phone: +49 731 50-32302
Fax: +49 731 50-32309
daniel.schallmo@uni-ulm.de
http://www.uni-ulm.de/itop
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Introduction
Research Objectives and Research Questions


Research objectives
¡ procedure for business model development
¡ generic business models for business-to-business markets


Research questions
¡ How can customer needs be derived for industries and included into
  customer driven industry business model innovation?
¡ What do generic business models in business-to-business markets
  look like?
¡ What does future and customer-driven company business model
  innovation look like and how can business models for an industry be
  integrated?

                                                            © Schallmo, D. and Brecht, L.   2
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Introduction
Research Approach


¡ Case study research was made via desk research (homepage, brochures,
  press releases) for companies in business-to-business markets and
  structured within a data base.
¡ Action research and focus group interviews were embedded in workshops
  of the “Centre of Excellence for Sales Management in Business-to-Business
  Markets”.


¡ 7 to 10 practitioners from 3 companies
¡ Different fields of expertise (market development, strategic
  planning and sales management)
¡ 7 workshops were conducted from May 2010 to
  October 2010, 4-8 hours
¡ Two interviewers permanently involved

                                                            © Schallmo, D. and Brecht, L.   3
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Industry Business Model Innovation Stage Gate Process
Development of the Procedure
                        Customer needs                        Customer needs                       Industry business                     Industry business
                        review                                focus review                         model vision                          model review
                        • Evaluate customer                   • Evaluate customer                  review                                • Evaluate industry
                          needs                                 need focusses                      • Evaluate industry                     business model
                        • Gate result is produced             • Gate result is produced              business model vision               • Gate result is produced
                                                                                                   • Gate result is produced

                         rework                                rework                               rework                                rework




                                              go                                    go                                   go                        Industry
           Initiation             Gate 1            Stage 1             Gate 2           Stage 2             Gate 3            Stage 3             business
                                                                                                                                                    model



                                   kill                                  kill                                 kill

  Customer needs                           Customer needs                        Industry business                    Industry business
  derivement in                            focus development                     model vision                         model development
  industry                                 • Cluster customer                    development                          • Integrate ideas from
  • Analyze drivers                          needs                               • Derive industry                      literature
    (PESTEL) in macro                      • Describe customer                     business model visions             • Integrate ideas from
    environment                              need custers                        • Describe reason,                     cases
  • Choose industry and                    • Derive tension pair                   intention and                      • Develop business
    derive forces in micro                 • Analyze customer                      sustainability of                    model elements
    environment                              need focus                            business model
  • Derive customer
    challenges and needs



                                                                    © Schallmo, D. and Brecht, L.                                                               4
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

 Industry Business Model Innovation Stage Gate Process
 Application of the Procedure
                                          Provides market access in development, sourcing, production and
                                           sales; example: “German Centres” of three regional state lenders
                                          provide offices, legal advice, contacts etc. (German Centre, 2010).

                                                                         Market
                                                                         Provider

  Provides access to a network in order to                                                                      Provides loans, leasing opportunities and
                                                   Network                                       Finance          subsidies; example: “Trumpf” provides
  gain contacts and information; example:          Provider                                      Provider
 “Trumpf” provides a platform to customers                                                                      advice for customers to access subsidies
    in order to buy/sell used machinery                                                                         or “Rolls-Royce” provides pay per hour for
               (Trumpf, 2010).                                                                                  airplane engines (Trumpf, 2010 and Rolls-
                                                                                                                              Royce, 2010).

Provides qualified personnel, trainings                                                                               Provides products and services that
and know-how; example: consultancies                                                                                     enable customers to act in a
                                              People                                                 Sustain-
    provide customers know-how for            Provider                                                ability        sustainable way, uphold their code of
  several topics. “Manpower” provides                                                                Provider          conduct and behave according to
  services such as trainings, test and                                                                                compliance requirements; example:
selection systems, temporary work and                                                                                “Better Place” provides a network for
 recruitment of personnel. (Manpower,                                                                                 renting automobile batteries (Better
                  2010).                                                                                                         Place, 2010).
                                                              Service                 Product
                                                              Provider                Provider
         Provides product-related services along the                                                  Provides a modular system in order to fulfil
         complete value chain; example: “Implenia”                                                    individual needs; example: “Azo” provides
          provides services before, while and after                                                    modular food machines that are easy to
              the construction of a building and                                                        clean and quick to install (Azo, 2010).
           coordinates partners (Implenia, 2010).



                                                               © Schallmo, D. and Brecht, L.                                                            5
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Summary
Contributions and Practical Implications


¡ Industry business model innovation stage-gate process
¡ Generic business models for business-to-business markets
¡ Ideas for companies in order to adjust and innovate business models
¡ Current understanding of business models, business model levels,
  business model environment and business model innovation
¡ Application of procedure for other industries




                                                            © Schallmo, D. and Brecht, L.   6
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Summary
Limitations and Further Research


Limitations
¡ research design challenges generalizability


Further Research
¡ Study à analyze the current procedure of companies on BMI and existing
  business models in B2B markets.
¡ Detailed development of the company business model innovation stage-
  gate process à financial and risk/opportunity issues.
¡ Development of a procedure in order to derive processes for the business
  models developed.




                                                            © Schallmo, D. and Brecht, L.   7
Business Model Innovation in Business-to-Business Markets - Procedure and Examples

Summary



Research objectives
¡ procedure for business model development
¡ generic business models for business-to-business markets




                                                            © Schallmo, D. and Brecht, L.   8
Business Model Innovation in Business-to-Business Markets - Procedure and Examples




   Daniel Schallmo, MBA               Prof. Dr. Leo Brecht




  Ulm University
  Faculty of Mathematics and Economics
  Institute of Technology and Process Management

  Daniel Schallmo, MBA
  Prof. Dr. Leo Brecht

  Helmholtzstraße 22
  89081 Ulm, Germany
  Phone:           +49 731 50-32302
  Fax:             +49 731 50-32309
  daniel.schallmo@uni-ulm.de
  http://www.uni-ulm.de/itop



                                                             © Schallmo, D. and Brecht, L.   9

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Business model innovation in business to-business markets - procedure and examples upload

  • 1. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Daniel R.A. Schallmo, MBA Prof. Dr. Leo Brecht Helmholtzstraße 22 89081 Ulm, Germany Phone: +49 731 50-32302 Fax: +49 731 50-32309 daniel.schallmo@uni-ulm.de http://www.uni-ulm.de/itop
  • 2. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Introduction Research Objectives and Research Questions Research objectives ¡ procedure for business model development ¡ generic business models for business-to-business markets Research questions ¡ How can customer needs be derived for industries and included into customer driven industry business model innovation? ¡ What do generic business models in business-to-business markets look like? ¡ What does future and customer-driven company business model innovation look like and how can business models for an industry be integrated? © Schallmo, D. and Brecht, L. 2
  • 3. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Introduction Research Approach ¡ Case study research was made via desk research (homepage, brochures, press releases) for companies in business-to-business markets and structured within a data base. ¡ Action research and focus group interviews were embedded in workshops of the “Centre of Excellence for Sales Management in Business-to-Business Markets”. ¡ 7 to 10 practitioners from 3 companies ¡ Different fields of expertise (market development, strategic planning and sales management) ¡ 7 workshops were conducted from May 2010 to October 2010, 4-8 hours ¡ Two interviewers permanently involved © Schallmo, D. and Brecht, L. 3
  • 4. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Industry Business Model Innovation Stage Gate Process Development of the Procedure Customer needs Customer needs Industry business Industry business review focus review model vision model review • Evaluate customer • Evaluate customer review • Evaluate industry needs need focusses • Evaluate industry business model • Gate result is produced • Gate result is produced business model vision • Gate result is produced • Gate result is produced rework rework rework rework go go go Industry Initiation Gate 1 Stage 1 Gate 2 Stage 2 Gate 3 Stage 3 business model kill kill kill Customer needs Customer needs Industry business Industry business derivement in focus development model vision model development industry • Cluster customer development • Integrate ideas from • Analyze drivers needs • Derive industry literature (PESTEL) in macro • Describe customer business model visions • Integrate ideas from environment need custers • Describe reason, cases • Choose industry and • Derive tension pair intention and • Develop business derive forces in micro • Analyze customer sustainability of model elements environment need focus business model • Derive customer challenges and needs © Schallmo, D. and Brecht, L. 4
  • 5. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Industry Business Model Innovation Stage Gate Process Application of the Procedure Provides market access in development, sourcing, production and sales; example: “German Centres” of three regional state lenders provide offices, legal advice, contacts etc. (German Centre, 2010). Market Provider Provides access to a network in order to Provides loans, leasing opportunities and Network Finance subsidies; example: “Trumpf” provides gain contacts and information; example: Provider Provider “Trumpf” provides a platform to customers advice for customers to access subsidies in order to buy/sell used machinery or “Rolls-Royce” provides pay per hour for (Trumpf, 2010). airplane engines (Trumpf, 2010 and Rolls- Royce, 2010). Provides qualified personnel, trainings Provides products and services that and know-how; example: consultancies enable customers to act in a People Sustain- provide customers know-how for Provider ability sustainable way, uphold their code of several topics. “Manpower” provides Provider conduct and behave according to services such as trainings, test and compliance requirements; example: selection systems, temporary work and “Better Place” provides a network for recruitment of personnel. (Manpower, renting automobile batteries (Better 2010). Place, 2010). Service Product Provider Provider Provides product-related services along the Provides a modular system in order to fulfil complete value chain; example: “Implenia” individual needs; example: “Azo” provides provides services before, while and after modular food machines that are easy to the construction of a building and clean and quick to install (Azo, 2010). coordinates partners (Implenia, 2010). © Schallmo, D. and Brecht, L. 5
  • 6. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Summary Contributions and Practical Implications ¡ Industry business model innovation stage-gate process ¡ Generic business models for business-to-business markets ¡ Ideas for companies in order to adjust and innovate business models ¡ Current understanding of business models, business model levels, business model environment and business model innovation ¡ Application of procedure for other industries © Schallmo, D. and Brecht, L. 6
  • 7. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Summary Limitations and Further Research Limitations ¡ research design challenges generalizability Further Research ¡ Study à analyze the current procedure of companies on BMI and existing business models in B2B markets. ¡ Detailed development of the company business model innovation stage- gate process à financial and risk/opportunity issues. ¡ Development of a procedure in order to derive processes for the business models developed. © Schallmo, D. and Brecht, L. 7
  • 8. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Summary Research objectives ¡ procedure for business model development ¡ generic business models for business-to-business markets © Schallmo, D. and Brecht, L. 8
  • 9. Business Model Innovation in Business-to-Business Markets - Procedure and Examples Daniel Schallmo, MBA Prof. Dr. Leo Brecht Ulm University Faculty of Mathematics and Economics Institute of Technology and Process Management Daniel Schallmo, MBA Prof. Dr. Leo Brecht Helmholtzstraße 22 89081 Ulm, Germany Phone: +49 731 50-32302 Fax: +49 731 50-32309 daniel.schallmo@uni-ulm.de http://www.uni-ulm.de/itop © Schallmo, D. and Brecht, L. 9