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Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
$ 1.600.000,-

    © Marc Sniukas - Doujak Corporate Development
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Free
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  © Marc Sniukas - Doujak Corporate Development
Business Model
 Innovation
Business Model Innovation
How to (re)invent your business.


by Marc Sniukas
www.sniukas.com
What will we do today?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?


4.       What is the Process of Business Model Innovation?
What will we do tomorrow?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
TEACHING
We don‘t teach…we create opportunities to learn!




LEARNING
Getting to know each other


                 “   Who are you?
                 “   What is your work (company, position, …)
                 “   Why are you here?
                 “   What do you know about business model
                     innovation?
About Marc
www.sniukas.com


Consultant




Author            Researcher
How to (re)invent your Business Model?
         The Framework: Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities




Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
What are we going to do today?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?


4.       What is the Process of Business Model Innovation?
How to (re)invent your Business Model?
         The Framework: Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities




                    Why to engage in
                    business model
                     innovation?

Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
“Get the business model wrong, and
there is almost no chance of success...”
                                          Prof. David Teece
                           University of California, Berkley.
“Business model innovation matters and
it is a top priority of CEOs.”
„Innovation is front and center on the
corporate agenda, according to a
global survey. Executives are adding
more breakthrough innovations and
business model changes to their
portfolio to fuel the growth engine.“
                         Business Week, November 16, 2009
Why do Business Model Innovation?
         Benefits cited by business model innovators




Source: IBM Global CEO Study 2006
Why do Business Model Innovation?
         Profit outperformers focus on business model innovation




Source: IBM Global CEO Study 2006
Why do Business Model Innovation?
         Operating margin growth in excess of competitive peers




Source: IBM Global CEO Study 2006
Why do Business Model Innovation?
         Business model innovators outperform traditional
         innovators




Source: Businessweek / BCG Innovation Survey 2008
Why is it important to you?
How Business Model Innovation can help you.

Entrepreneurs         Managers                Public Officers

Market Entry         Growth                   Enhanced Value for
                                              Citizens

Commercializing a    Competitive              Innovative New
New Technology       Advantage                Approaches needed

Create New Markets   Fend of new              New Public
                     entrants                 Management
Is it time to renew your business model?
How to tell: Environmental Forces
Is it time to renew your business model?
         How to tell: Product/Technology Life Cycle



                                                                                                                         Stagnating or
                                                                                                                       declining revenues




Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
Is it time to renew your business model?
         How to tell: Product/Technology Life Cycle




Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
Any Questions?
Business model innovation 2 day workshop facilitation slides
What will we do today?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?


4.       What is the Process of Business Model Innovation?
How to (re)invent your Business Model?
         The Framework and Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                                 Content
                              Input to                                                                              Result of
                          Business Model                                        Process                          Business Model
                            Innovation                             Flow of Business Model Innovation               Innovation
                             Activities                                         Activities                          Activities



                                                                                                            Dimensions and
                                                                                                         components of Business
                                                                                                          Models and Business
                                                                                                           Model Innovations.
Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
What is a business model?
Some definitions


“   “A business model is simply the ‘way of doing business’ that a firm has chosen: its entire
    system for creating and providing consistent value to customers and earning a profit from that
    activity, as well as benefit for its broader stakeholders. It refers to the core architecture or
    configuration of the firm, specifically how it deploys all relevant resources (not just those
    within the company boundaries), to create differentiated value for customers at a profit…”
    (Davenport, T. H., M. Leibold and S. Voelpel (2006). Strategic Management in the Innovation Economy. Publicis Wiley.)


“   The business model is a company’s answer to the question of how to make money in its
    chosen business. It describes, “…as a system, how the pieces of a business fit together”
    (Magretta, J. (2002). "Why Business Models Matter." Harvard Business Review 80(5) May: 86-92.)
What is a business model?
The essence and main components


      WHO                   WHAT                HOW
     is your             do you offer          do you
   customer?           your customers?         do this?

      Markets           Products & Services   Create Value

Customer Segments            Solutions        Deliver Value

Individual Customers       Experiences        Capture Value


                       Value Proposition
Describing your business business model
         Please describe your business by answering these 3
         questions.
         Who is your
         customer?




         What is your value
         proposition?




         How are you
         creating and
         delivering your
         offer?


Source: Marc Sniukas
What is a business model?
         The different layers / levels of detail of a business model


                                         • Offering
                            Value
                                         • Customer
                         Proposition
                                         • Needs and job to be done

                                                • Creation
                            Value               • Delivery
                                                • Capture
                                                       • Activities and processes
                                                       • Network and value chain partners
                         Organization
                                                       • Resources, assets and capabilities
                                                       • Governance structures and processes

                         Relationships                         • to all stakeholders


                                                                       • Costs
                          Financials                                   • Revenues
                                                                       • Profit


Source: Marc Sniukas
What is a business model?
Tools for describing your business model




Source: Accenture




                                         Source: The Boston Consulting Group




                                                                               Source: Innosight

   Source: businessmodelgeneration.com
Describing your business model




Source: Linder, J. C. and S. Cantrell (2000). "Changing Business Models: Surveying the Landscape." A Working Paper from the Accenture Institute for Strategic Change.
Describing your business model
         Four components




Source: Johnson, M, Christensen, C, & Kagermann, H 2008, Reinventing Your Business Model. Harvard Business Review, 86
Describing and visualizing your business model
Why is it important?


      Be able to communicate it


                 Speak a common language


                            See the big picture


                                  Have a basis for innovation
Describing your business model
         The business model canvas

                   KEY                           KEY          OFFER         RELATIONSHIPS   CLIENTS
                 PARTNER                         ACTIVITIES




                                                   KEY
                                                RESOURCES                     CHANNELS




                       COST CENTRES                                   REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                           KEY             OFFER            RELATIONSHIPS   CLIENTS
                 PARTNER                         ACTIVITIES



                                                              What‘s your
                                                                offer?

                                                              Which „jobs
                                                   KEY        to be done‚
                                                RESOURCES                           CHANNELS
                                                                 do you
                                                                satisfy?




                       COST CENTRES                                         REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                           KEY             OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                         ACTIVITIES



                                                              What‘s your
                                                                                                  Who‘s your
                                                                offer?
                                                                                                  customer?
                                                              Which „jobs
                                                                                                     Which
                                                   KEY        to be done‚
                                                RESOURCES                           CHANNELS       customer
                                                                 do you
                                                                                                  segments do
                                                                satisfy?
                                                                                                   you serve?




                       COST CENTRES                                         REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                           KEY             OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                         ACTIVITIES



                                                              What‘s your
                                                                                                  Who‘s your
                                                                offer?
                                                                                                  customer?
                                                              Which „jobs
                                                                                                     Which
                                                   KEY        to be done‚
                                                RESOURCES                           CHANNELS       customer
                                                                 do you
                                                                                                  segments do
                                                                satisfy?
                                                                                                   you serve?
                                                                                  How do you
                                                                                  reach your
                                                                                  customers?


                       COST CENTRES                                         REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                           KEY             OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                         ACTIVITIES
                                                                                  What‘s your
                                                                                  relationship
                                                              What‘s your            to the
                                                                                                  Who‘s your
                                                                offer?             customer?
                                                                                                  customer?
                                                                                  What‘s your
                                                              Which „jobs            image?
                                                                                                     Which
                                                   KEY        to be done‚
                                                RESOURCES                           CHANNELS       customer
                                                                 do you
                                                                                                  segments do
                                                                satisfy?
                                                                                                   you serve?
                                                                                   How do you
                                                                                   reach your
                                                                                   customers?


                       COST CENTRES                                         REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                                                 processes?                                          customer?
                                                                                     What‘s your
                                                                 Which „jobs            image?
                                                                                                        Which
                                                     KEY         to be done‚
                                                  RESOURCES                            CHANNELS       customer
                                                                    do you
                                                                                                     segments do
                                                                   satisfy?
                                                                                                      you serve?
                                                                                      How do you
                                                                                      reach your
                                                                                      customers?


                       COST CENTRES                                            REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                                                 processes?                                          customer?
                                                                                     What‘s your
                                                                 Which „jobs            image?
                                                                                                        Which
                                                     KEY         to be done‚
                                                  RESOURCES                            CHANNELS       customer
                                                                    do you
                                                                                                     segments do
                                                                   satisfy?
                                                                                                      you serve?
                                                What are your                         How do you
                                                 main assets                          reach your
                                                     and                              customers?
                                                competencies?

                       COST CENTRES                                            REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                You are                          processes?                                          customer?
                                                                                     What‘s your
              your main                                          Which „jobs            image?
              suppliers,                                                                                Which
                                                     KEY         to be done‚
               partners                           RESOURCES                            CHANNELS       customer
                                                                    do you
                  and                                                                                segments do
                                                                   satisfy?
              alliances?                                                                              you serve?
                                                What are your                         How do you
                                                 main assets                          reach your
                                                     and                              customers?
                                                competencies?

                       COST CENTRES                                            REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                You are                          processes?                                          customer?
                                                                                     What‘s your
              your main                                          Which „jobs            image?
              suppliers,                                                                                Which
                                                     KEY         to be done‚
               partners                           RESOURCES                            CHANNELS       customer
                                                                    do you
                  and                                                                                segments do
                                                                   satisfy?
              alliances?                                                                              you serve?
                                                What are your                         How do you
                                                 main assets                          reach your
                                                     and                              customers?
                                                competencies?

                       COST CENTRES                                            REVENUE STREAMS

                                    What is
                                 driving cost?


Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                You are                          processes?                                          customer?
                                                                                     What‘s your
              your main                                          Which „jobs            image?
              suppliers,                                                                                Which
                                                     KEY         to be done‚
               partners                           RESOURCES                            CHANNELS       customer
                                                                    do you
                  and                                                                                segments do
                                                                   satisfy?
              alliances?                                                                              you serve?
                                                What are your                         How do you
                                                 main assets                          reach your
                                                     and                              customers?
                                                competencies?

                       COST CENTRES                                            REVENUE STREAMS

                                    What is                                            How do you
                                 driving cost?                                         make money?


Source: Canvas by businessmodelgeneration.com
Any Questions?
Business model innovation 2 day workshop facilitation slides
Describing your business model
         The business model canvas

                   KEY                           KEY          OFFER         RELATIONSHIPS   CLIENTS
                 PARTNER                         ACTIVITIES




                                                   KEY
                                                RESOURCES                     CHANNELS




                       COST CENTRES                                   REVENUE STREAMS




Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY              OFFER            RELATIONSHIPS     CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     What‘s your
                                                  What are
                                                                                     relationship
                                                 your core       What‘s your             to the
                                                activities and                                       Who‘s your
                                                                   offer?             customer?
                You are                          processes?                                          customer?
                                                                                     What‘s your
              your main                                          Which „jobs            image?
              suppliers,                                                                                Which
                                                     KEY         to be done‚
               partners                           RESOURCES                            CHANNELS       customer
                                                                    do you
                  and                                                                                segments do
                                                                   satisfy?
              alliances?                                                                              you serve?
                                                What are your                         How do you
                                                 main assets                          reach your
                                                     and                              customers?
                                                competencies?

                       COST CENTRES                                            REVENUE STREAMS

                                    What is                                            How do you
                                 driving cost?                                         make money?


Source: Canvas by businessmodelgeneration.com
Describing your business model
         The business model canvas

                   KEY                             KEY           OFFER          RELATIONSHIPS    CLIENTS
                 PARTNER                           ACTIVITIES
                                                                                     R1
                                                    Sales
                                                                Offer 1
                                                                                                Customer 1
                You are
                                                                Offer 2
              your main                                                                         Customer 2
              suppliers,                             KEY
               partners                           RESOURCES                       CHANNELS

                  and
              alliances?                        What are your                   Direct Sales
                                                 main assets
                                                     and
                                                competencies?

                       COST CENTRES                                       REVENUE STREAMS

                                    What is                                       How do you
                                 driving cost?                                    make money?


Source: Canvas by businessmodelgeneration.com
What will we do today?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?


4.       What is the Process of Business Model Innovation?
‚Hey! They’re lighting their
         arrows!
    Can they do that?‛
       © Marc Sniukas - Doujak Corporate Development
Business Model Innovation is about...
         The essence


                       WHO          WHAT                  HOW
                  is your         do you offer           do you
                customer?       your customers?          do this?

                                                       New Ways of
             New Markets           New Offers
                                                      Doing Business




                             New Value Propositions




Source: Marc Sniukas
The Innovation Map
         4 Types of Innovation

                                           Internal


                         Operational                  Management
                         Innovation                    Innovation



         Continuous                                                    Discontinuous


                       Product & Service              Business Model
                          Innovation                    Innovation



                                           External
Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
Nine Inch Nails
                    KEY                                 KEY                                  VALUE            RELATIONSHIPS   CUSTOMERS
                    PARTNERS                            ACTIVITIES                           PROPOSITION




                                                        KEY
                                                        RESOURCES                                             CHANNELS




                       COST CENTRES                                                                   REVENUE STREAMS




Business Model Canvas teamplate by : businessmodelgeneration.com – Content by Marc Sniukas
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
MinuteClinic

                       Traditional Approach            Business Model Innovation
        Who            “ Everybody                     “ Everybody



        What “ Usually full treatment                  “   Focus on basic treatments
             “ Services covered by health insurance    “   Quick
             “ Special treatment for additional cost   “   Convenient
                                                       “   Affordable
        How            “   A range of specialist       “ Generalists
                       “   Special facilities          “ Located in shopping malls / inside
                       “   One central location          CVS pharmacies
                       “   “Solution shops”            “ Multiple locations
                                                       “ “Retail model”




Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
Grameen Bank
                    KEY                                 KEY                                 VALUE            RELATIONSHIPS   CUSTOMERS
                    PARTNERS                            ACTIVITIES                          PROPOSITION




                                                        KEY
                                                        RESOURCES                                            CHANNELS




                       COST CENTRES                                                                  REVENUE STREAMS




Business Model Canvas template by : businessmodelgeneration.com – Content by Marc Sniukas
Grameen Bank

                       Traditional Approach                     Business Model Innovation
        Who            “ (Rich and middle class) people who      “ “Low income clients”
                         are reliable to pay back the credits or “ Poor people who would not get
                         have enough assets as security.           any loans from traditional banks
                                                                   (especially women)
        What “ Classic loans, usually for larger sums           “ Small loans to “unbanked people”
               to buy assets.


        How            “ Strong risk management                “ About 97% make their payments.
                       “ The returns from the interests belong “ The borrowers are the owners of
                         to the bank/ shareholders               the bank.
                       “ Profit focus                          “ The profit of the bank goes back to
                                                                 the owners.
                                                               “ There is no collateral. No lawyers.
                                                               “ Social business focus

Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
McCafé
           KEY                                KEY                 VALUE            RELATIONSHIPS   CUSTOMERS
           PARTNERS                           ACTIVITIES          PROPOSITION




                                              KEY
                                              RESOURCES                            CHANNELS




              COST CENTRES                                                 REVENUE STREAMS




Business Model Canvas template by : businessmodelgeneration.com
McCafé

                       Traditional Approach                       Business Model Innovation
          Who          “ People who want a quick bite to eat      “ People who want to sit down and
                       “ Get in, order, get served quickly, get     remain seated for a while
                         out quickly again                        “ Create a “3rd place” à la Starbucks

          What “ Pre-made food prepared constantly                “ Coffee and cake
                 according to demand                              “ Made to order (coffee)
               “ Standard menus                                   “ Pre-produced (cakes)
               “ Some variations allowed
          How          “ 1 counter                                “ 2 counters
                       “ Standardized processes                   “ Separate seating area for McCafé
                       “ Central locations with high              “ Key is to increase share of wallet
                         frequencies                                of the customer and keep him for
                       “ The key is to serve a maximum              a longer period of time in the
                         number of people during a given            restaurant
                         time                                     “ Innovative use of existing assets.

Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
Nintendo Wii

                       Traditional Approach                   Business Model Innovation
          Who          “ Kids                                 “ Everybody from 4-99
                       “ Hard Core Gamers                     “ The whole family
                                                              “ Casual Gamers
          What “ High Tech – High Performance                 “ Family Console
                 Console                                      “ Low tech console
                                                              “ Focus on fun rather than technical
                                                                performance
          How          “ High tech, high end processors for   “ Low tech, lower power processors,
                         speed and graphics, connect over the   no additional features
                         internet, additional features (DVD,  “ New movement technology
                         internet,...)                           lower cost
                          high cost                             lower sales price (190.- €)
                          high sales price (250-300.- €)


Source: Marc Sniukas
How innovative is your business model?
         The Business Model Evaluation Spider



                       Dimension             Scale
                                             1                                                                                                       5
                                  approach   traditional                                                                                   innovative

        Who            Customers
                       Profitability
                                             existing customers
                                             most profitable
                                                                                                                           3rd   tier noncustomers
                                                                                                                                     least profitable
                       Satisfaction          most satisfied                                                                             least satisfied
                       Segmentation          differences                                                                              commonalities
                       Buyer                 single buyer                                                                            chain of buyers
                       Attributes vs         attributes                                                                                circumstances
                       Circumstances
        What           Total Solution
                       Appeal
                                             single product
                                             according to industry (either functional or emotional)
                                                                                                                      total solution; experiences
                                                                                                                       against conventional logic
                       Product vs            product                                                                                     function
                       Function
                       Features              improve and raise                                             selectively raise, reduce, create, and
                                                                                                                                         eliminate
        How            Customer interface conventional logic                                              experiences; every element of buying
                                                                                                                                  cycle addressed
                       Revenue streams       conventional logic                                                                      new streams
                       and pricing                                                                                                strategic pricing
                       Cost                  not aligned with strategic price of the masses           aligned with strategic price of the masses
                       Activity system       low fit, me too logic                                           high fit, creative rearrangement of
                                                                                                                                         activities
                       Assets                existing assets                                                                           new assets
Source: Marc Sniukas
How innovative is your business model?
         The Business Model Evaluation Spider



                                                                        Assets
                                                                        5
                                                     Activity System                    Customers

                                                                        4
                                                    Cost                                               Profitability

                                                                        3

                              Revenue Streams                                                                  Satisfaction
                                                                        2


                                                                        1
                           Customer Interface                                                                     Segmentation




                                         Features                                                           Buyer




        1 = conventional me too                  Function                                         Circumstances
        2 = imitative innovation
                                                               Appeal            Total Solution
        3 = slightly innovative; some new ideas; not too risky
        4 = innovative; risky new ideas
        5 = radically different
Source: Marc Sniukas
What will we do today?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?


4.       What is the Process of Business Model Innovation?
How to (re)invent your Business Model?
         The Framework and Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities



                                                                     How to achieve business
                                                                     model innovation within
                                                                        your company?

Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
The process of business model innovation
         A discovery driven approach



                                   Setting the Stage




                            A Discovery-Driven
                                 Approach




Source: Marc Sniukas
Source: Marc Sniukas




          How to (re)invent your Business Model?
          The Process                                  “
                                                       “
                                                           Define the purpose, scope and focus of innovation activities
                                                           Align business and innovation strategies
                                                       “   Build leadership alignment & commitment                                             • Identifying
                                                       “   Build a common language and understanding                                             internal and
                                                       “   Definition of governance structures and processes                                     external
                                                                                                                                                 opportunities
                                                                                                                                               • Sensing, seeking
                                                                              Setting the Stage                                                  and shaping
                                                                                                                                                 opportunities
            “   Bringing successful ideas to market
                                                                                                                                               • Describe the
            “   Financial impact                                                                                                                 current business
            “   Incubation                                                                                                                       model
            “   Acceleration                                                                                                                   • Explore and
            “   Transition                                                                                                                       understand
                                                            A Discovery-Driven                                                                   consumer and
                                                                                                                                                 customer needs,
                                                                 Approach                                                                        motivations,
                                                                                                                                                 behaviors
                                                                                                                                               • Understand
                                                                                                                                                 emerging
“ Turn ideas into market
                                                                                                                                                 markets, industry
  ready concepts
                                                                                                                                                 and socio-
“ Road-test the idea portfolio                                                                                                                   ecological trends
  with key stakeholders,
  consumers, internal and external                                                                             “   Design new business models
“ Prototyping, Technical feasibility                                                                           “   Develop and select ideas
“ Experimentation & learning                                                                                   “   Develop an idea portfolio
“ Customer & stakeholder feedback                                                                              “   Idea Generation (In-house, cross-units, external)
“ Business planning, venturing, secure founding                                                                “   Idea Evaluation
“ Decide of organizational and governance structures                                                           “   Idea Selection
“ Evolution & optimization                                                                                     “   Strategic decision making
Setting the stage
         Getting ready


         Description   Project Set Up

         Input         (Business Model Innovation idea)

         Tasks         1.   Define purpose, scope and focus (Why)
                       2.   Define and build team (Who)
                       3.   Define goals and metrics
                       4.   Define governance structure, process and project plan (How)
                       5.   Build leadership commitment
         Output        •    Project Brief/Assignment
                       •    Project plan incl. milestones, tasks, responsibilities, 1st resource planning per phase
                       •    Team is established
                       •    Common understanding about the project has been created
         Gate          •    Stop/Go decision
                       •    Team established and resources have been committed
         Tools         •    Kick-off workshop
                       •    Business Model Handbook
                       •    Project Brief
                       •    Project Planning


Source: Marc Sniukas
Any Questions?
Business model innovation 2 day workshop facilitation slides
Discovery
         Gaining insights


         Description   Identify internal and external opportunities

         Input         Project Brief

         Tasks         1.   Company Assessment
                       2.   Market Assessment
                       3.   Industry Assessment
                       4.   Future Trends Assessments
         Output        •    Description AS IS of current business model, market, competition, industry
                       •    Description of opportunities
                       •    Description of first ideas
                       •    Update project planning incl. resources needed estimation for next phase
         Gate          •    Stop/Go Decision
                       •    Is the idea still interesting?
                       •    Is it worth spending the resources for the next phase?
         Tools         •    Desk and real life research
                       •    Who/What/How, Canvas, SWOT
                       •    Customer Profile, Value Curve, Buyer Experience Cycle
                       •    5 Forces


Source: Marc Sniukas
Discovery
         Gaining insights




Source: Marc Sniukas
What does your customer want?
The Customer Profile


                          What does he
                         THINK and FEEL?
                          Fears, worries,
                        aspirations, wants,
                       needs, frustrations,....



      What does he                                What does he
         HEAR?                                       SEE?
       What others                                 Environment
           say                                        Others
       Influencers                                What does the
        Companies                                 market offer?
            ...                                         ...

                          What does he
                              DO?
                             Behaviors
                             Attitudes
                            Appearance
                                 ...
What does your customer want?
           The Customer Profile


                                     What does he
                                    THINK and FEEL?
                                     Fears, worries,
                                   aspirations, wants,
                                  needs, frustrations,....



                 What does he                                What does he
                    HEAR?                                       SEE?
                  What others                                 Environment
                      say                                        Others
                  Influencers                                What does the
                   Companies                                 market offer?
                       ...                                         ...

                                     What does he
                                         DO?
                                        Behaviors
                                        Attitudes
                                       Appearance
                                            ...




Source: Xplane
How do you reach your customers?
                      Buyer Experience and Channels


                               Pre-Purchase Steps                                                     The Six Stages of the Buyer Experience Cycle

                               Awareness          Evaluation                   Purchase                      Delivery   Use   Supplements   Maintenance   Disposal


                               Customer Productivity: In which stage are the biggest blocks to customer productivity?
      The Six Utility Levers




                               Simplicity:                                  In which stage are the biggest blocks to simplicity?


                               Convenience:                                 In which stage are the biggest blocks to convenience?


                               Risk:                                        In which stage are the biggest blocks reducing risk?


                               Fun and image:                               In which stage are the biggest blocks fun and image?

                               Environmental
                                                                            In which stage are the biggest blocks to environmental friendliness?
                               friendliness:


Source: Marc Sniukas. Adapted from Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
How do you reach your customers?
            Buyer Experience and Channels


                       Pre-Purchase Steps                  The Six Stages of the Buyer Experience Cycle
                       Awareness   Evaluation   Purchase     Delivery    Use    Supplements   Maintenance   Disposal
      Channels




Source: Marc Sniukas
What is your value proposition?

                                                                        Low Cost Airline         Average Airline       Car Transport
high




 low

                  Price                          Meals                          Lounges        Seating Class   Hub Connectivity   Friendly Service   Frequent Point to
                                                                                                  Choice                                             Point Departures
       Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
What is your value proposition?
       The Value Curve



high




 low
Who are your non-customers?
Why are they not buying?


“   1st group: „soon-to-be“ non-customers: They minimally use the current offering, but are
    constantly searching for something better or different and ready to switch easily. They are
    closest to the existing customers.

“   2nd group: „refusing“ non-customers: They either do not use or cannot afford to use the
    current market offerings because they find the offerings unacceptable or beyond their means.
    These customers are willing to buy, but not at the current terms.

“   3rd group: „unexplored” non-customers: They are the farthest away from the existing market.
    Typically they are being ignored completely as potential customers by the industry, either
    because they have always been assumed to belong to another industry or are not being
    considered worth the effort.
Any Questions?
Business model innovation 2 day workshop facilitation slides
What will we do tomorrow?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
Thanks for your attention!
    ....See you tomorrow.
Business Model Innovation
How to (re)invent your business.


by Marc Sniukas
www.sniukas.com
What did we do yesterday?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?
How to (re)invent your Business Model?
         The Framework: Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities




Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
What did we do yesterday?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?
How to (re)invent your Business Model?
         The Framework: Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities




                    Why to engage in
                    business model
                     innovation?

Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
Why do Business Model Innovation?
         Benefits cited by business model innovators




Source: IBM Global CEO Study 2006
Is it time to renew your business model?
How to tell
What did we do yesterday?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?
How to (re)invent your Business Model?
         The Framework and Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                                 Content
                              Input to                                                                              Result of
                          Business Model                                        Process                          Business Model
                            Innovation                             Flow of Business Model Innovation               Innovation
                             Activities                                         Activities                          Activities



                                                                                                            Dimensions and
                                                                                                         components of Business
                                                                                                          Models and Business
                                                                                                           Model Innovations.
Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
What is a business model?
         The essence and main components




Source: Marc Sniukas
What is a business model?
Tools for describing your business model




Source: Accenture




                                         Source: The Boston Consulting Group




                                                                               Source: Innosight

   Source: businessmodelgeneration.com
What did we do yesterday?
Agenda


1.       Why is Business Model Innovation important?


2.       What is a Business Model?


3.       What is Business Model Innovation?
How to (re)invent your Business Model?
         The Framework and Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                                 Content
                              Input to                                                                              Result of
                          Business Model                                        Process                          Business Model
                            Innovation                             Flow of Business Model Innovation               Innovation
                             Activities                                         Activities                          Activities



                                                                                                            Dimensions and
                                                                                                         components of Business
                                                                                                          Models and Business
                                                                                                           Model Innovations.
Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
‚Hey! They’re lighting their
         arrows!
    Can they do that?‛
       © Marc Sniukas - Doujak Corporate Development
Business Model Innovation is about...
         The essence




Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
What will we do today?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
What will we do today?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
The Telco Business Model
         3 models in one




Source: businessmodelgeneration.com
Bharti Airtel Limited
A new business model for the telco industry


“ Bharti Airtel Limited, the largest telecom service provider in India, chose to
  strategically outsource its core functions.
“ For a typical telecom operator, the pain point during the growth phase is
  planning for network requirements and preparing budgets for such a
  capital expenditure.
“ Capacity has to be built ahead of demand, which usually means the
  telecom operator has to absorb the cost of unused capacity.
“ Source:
  http://blogs.hbr.org/cs/2010/05/reverse_innovation_success_in_the_tele.
  html
Business Model Innovation is about…
         The Essence


                       WHO          WHAT                  HOW
                  is your         do you offer           do you
                customer?       your customers?          do this?

                                                       New Ways of
             New Markets           New Offers
                                                      Doing Business




                             New Value Propositions




Source: Marc Sniukas
Business Model Innovation
         Where to start?



                                     New
                                    Markets




                                   New Value
                                   Proposition


                       New Ways
                                                 New
                        of doing
                                                 Offers
                        business



Source: Marc Sniukas
What will we do today?
Agenda


1.       How to develop and design new Business Models?


         I.     Who is the customer?


         II.    What is the need / job to be done?


         III.   How are you satisfying that need?
What will we do today?
Agenda


1.       How to develop and design new Business Models?


         I.     Who is the customer?


         II.    What is the need / job to be done?


         III.   How are you satisfying that need?
Which customers do you target?
         Creating new markets


                                           existing   ↔   noncustomers (2nd and 3rd tier)

                                   most profitable    ↔   less profitable

                                     most satisfied   ↔   less satisfied (1st tier)

                                     specific buyer   ↔   chain of buyers

                               focus on differences   ↔   focus on commonalities

                       focus on finer segmentation    ↔   focus on de-segmentation

                                focus on attributes       focus on circumstances
                       (of customers and products)    ↔   (needs and the job done)


Source: Marc Sniukas
Who is the customer?


                                                     Satisfaction
                       B2B
                             B2C


                                                               Profitability
                       Non-Customers


                                   Characteristics   Demographics


Source: Marc Sniukas
What will we do today?
Agenda


1.       How to develop and design new Business Models?


         I.     Who is the customer?


         II.    What is the job to be done?


         III.   How are you satisfying that need?
What is the job to be done?


1.       What problem is the customer trying to solve? “*Customer] wants to
         [solve problem] in [this context+.”

2.       Which features are important to the customer? What does he want and
         value?

3.       What are barriers for the customer?
     -    Price: How cheap / expensive are existing solutions?
     -    Access: How easy / complicated is it to get / install existing solutions?
     -    Usage: How easy / complicated is it for the customer to use existing solutions?
     -    Experience: What are barriers to a good experience?
How do you reach your customers?
                      Buyer Experience and Channels


                               Pre-Purchase Steps                                                     The Six Stages of the Buyer Experience Cycle

                               Awareness          Evaluation                   Purchase                      Delivery   Use   Supplements   Maintenance   Disposal


                               Customer Productivity: In which stage are the biggest blocks to customer productivity?
      The Six Utility Levers




                               Simplicity:                                  In which stage are the biggest blocks to simplicity?


                               Convenience:                                 In which stage are the biggest blocks to convenience?


                               Risk:                                        In which stage are the biggest blocks reducing risk?


                               Fun and image:                               In which stage are the biggest blocks fun and image?

                               Environmental
                                                                            In which stage are the biggest blocks to environmental friendliness?
                               friendliness:


Source: Marc Sniukas. Adapted from Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
What will we do today?
Agenda


1.       How to develop and design new Business Models?


         I.     Who is the customer?


         II.    What is the need / job to be done?


         III.   How are you satisfying that need?
How to you define your product?
         Creating new offerings


                                                       start anew, or use existing assets in a
                        focus on existing assets   ↔   new way

                       single product or service   ↔   total solution, bundling


                              functional appeal    ↔   emotional appeal and experiences


                                                       focus on function fulfilled and the
                              focus on product     ↔   job-to-be-done

                                                       raise, reduced, create, eliminate
                            build new features     ↔   selectively

Source: Marc Sniukas
How do you do business?
         Creating new ways for creating, delivering and caputring value


                                                                           (co-creating) experiences
                  conventional customer interface                      ↔   easy to do business with

                                     conventional pricing                  strategic pricing of the masses
                       (either to cover cost or benchmarked against    ↔   (benchmarked against substitutes and alternative
                                                      competitors)         industries)



                                         cost-plus thinking            ↔   price-minus thinking; target costs


                                                                           network (with customers, suppliers,
                                       integrate activities            ↔   partners, alliances)

                                       low fit of activities               high fit of activities
                                         (internally and externally)
                                                                       ↔   (internally and externally)



Source: Marc Sniukas
How to (re)invent your Business Model?
         25 Strategies
                                                           WHO
                                                           #11 Target non-customers
        #1 Challenge industry assumptions                  #12 Target less profitable customers
        WHAT                                               #13 Target the least satisfied customers
        #2 Offer complementary products and services       #14 Target the chain of buyers
        #3 Offer solutions and experiences                 #15 Segment according to commonalities
        #4 Offer bundles                                   #16 Segment according to circumstances
        #5 Switch your appeal: functional versus emotional #17 Desegment the customer based
        #6 Focus on the job to be done                     HOW
        #7 Selectively eliminate, reduce, raise and create #18 Reinvent the customer interface (channels)
        #8 Look at subsitutes                              #19 Reinvent your customer relationships
        #9 Expand the use of your assets and capabilities #20 Invent new revenue streams
        #10 Look at the customer experience                #21 Price differently
                                                           #22 Reinvent you cost base
                                                           #23 Re-assess your key activities
                                                           #24 Collaborate with suppliers, partners, the
                                                               network and ecosystem
                                                           #25 Look at completely different industries
Source: Marc Sniukas
What is your value proposition?




                 Type                            Features
Product – Service – Solution – Experience    Focused – Extensive
                 Form                             Custom
          Tangible – Intangible              Generic – Tailored
               Breadth                            Lifetime
            Single – Bundled                Consumable – Durable
How is the value proposition purchased?



          Supplier                 Support
       Direct – Indirect         Light – Heavy
         Frequency                Availability
        Often – Rarely       On-Demand – Limited
           Timing                 Autonomy
     Immediate – Delayed     Assisted – Independent
          Strategy                 Location
     Planned – Unplanned       Traditional – New
How is payment done?




            Form                    Price
       Cash – Financed         Fixed – Variable
         Frequency               Frequency
    Pay per item – Flat fee   Once – Installment
           Timing                   Payer
    Up-front – Afterwards      Single – Multiple
What is your value proposition?

                                                                               Low Cost Airline     Average Airline       Car Transport
high




  low

                        Price                           Meals                           Lounges   Seating Class   Hub Connectivity   Friendly Service   Frequent Point to
                                                                                                     Choice                                             Point Departures

Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
What will we do today?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
How to evaluate business models?
3 different types of experimentation
How to evaluate business models?
‚Paper‛ based approach

                                  Area                                    Rating                          Description   What we   What we
                                                                                                                                  assume...
                                                                                                                        know...
                                  Strategy       How well does the idea
                                                 fit with our current        0         5           10
                                                 strategy?
                                                                           expanding or defending a
                                                 What is the strategic      current business
                                                 purpose of the idea?      building a new one that has
                                                                            already been identified
                                                                           laying the foundations for
                                                                            potential new businesses

                                  Organization   Resources &
                                                 Competencies

                                                 Which do we need?

                                                 Which do exist
                                                 already?

                                                 Which need to be
                                                 build?

                                                 Change need

                                                 Change readiness

                                  Finance        Revenue potential

                                  Financial      (Qty x Price)
                                  Implications
                                                 Cost (fix + variable)

                                                 Unit Margin Target




 How innovative is the model?                    Does fit our organization? Can
 Does it have the potential for                  we implement it? Do we have
    competitive advantage                             the capabilities and
   through differentiation?                                resources?
How to evaluate business models?
‚Paper‛ based approach


Strategy                             Organization                   Financials
• How well does the idea fit with    •   Resources & Competencies   Revenue potential
  our current strategy?              •   Which do we need?          Cost
• What is the strategic purpose of   •   Which do exist already?    Unit Margin Target
  the idea?                          •   Which need to be build?    Cash Flow Payback
   expanding or defending a          •   Change need                Net Present Value
   current business                  •   Change readiness
   building a new one that has
   already been identified
   laying the foundations for
   potential new businesses

Innovation                           Risks                          Success Factors
• How innovative is the new          •   Competition                • Strengths
  model?                             •   Weaknesses                 • Opportunities
   Known to company and              •   Threats
   industry                          •   Expected barriers
   Known to industry, new to
   company
   New for company and industry
What will we do today?
Agenda


1.       How to develop and design new Business Models?


2.       How to evaluate Business Models?


3.       Case Study


4.       What are characteristics of Business Model Innovators?
How to (re)invent your Business Model?
         The Framework and Dimensions to consider



                                                                       Context
                                              Conditions Surrounding Business Model Innovation Activities

                             Purpose                                                                         Content
                              Input to                                                                      Result of
                          Business Model                                        Process                  Business Model
                            Innovation                             Flow of Business Model Innovation       Innovation
                             Activities                                         Activities                  Activities



                                                                     How to achieve business
                                                                     model innovation within
                                                                        your company?

Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
The process of business model innovation
         A discovery driven approach



                                   Setting the Stage




                            A Discovery-Driven
                                 Approach




Source: Marc Sniukas
Source: Marc Sniukas




          How to (re)invent your Business Model?
          The Process                                  “
                                                       “
                                                           Define the purpose, scope and focus of innovation activities
                                                           Align business and innovation strategies
                                                       “   Build leadership alignment & commitment                                             • Identifying
                                                       “   Build a common language and understanding                                             internal and
                                                       “   Definition of governance structures and processes                                     external
                                                                                                                                                 opportunities
                                                                                                                                               • Sensing, seeking
                                                                              Setting the Stage                                                  and shaping
                                                                                                                                                 opportunities
            “   Bringing successful ideas to market
                                                                                                                                               • Describe the
            “   Financial impact                                                                                                                 current business
            “   Incubation                                                                                                                       model
            “   Acceleration                                                                                                                   • Explore and
            “   Transition                                                                                                                       understand
                                                            A Discovery-Driven                                                                   consumer and
                                                                                                                                                 customer needs,
                                                                 Approach                                                                        motivations,
                                                                                                                                                 behaviors
                                                                                                                                               • Understand
                                                                                                                                                 emerging
“ Turn ideas into market
                                                                                                                                                 markets, industry
  ready concepts
                                                                                                                                                 and socio-
“ Road-test the idea portfolio                                                                                                                   ecological trends
  with key stakeholders,
  consumers, internal and external                                                                             “   Design new business models
“ Prototyping, Technical feasibility                                                                           “   Develop and select ideas
“ Experimentation & learning                                                                                   “   Develop an idea portfolio
“ Customer & stakeholder feedback                                                                              “   Idea Generation (In-house, cross-units, external)
“ Business planning, venturing, secure founding                                                                “   Idea Evaluation
“ Decide of organizational and governance structures                                                           “   Idea Selection
“ Evolution & optimization                                                                                     “   Strategic decision making
Setting the stage
         Getting ready


         Description   Project Set Up

         Input         (Business Model Innovation idea)

         Tasks         1.   Define purpose, scope and focus (Why)
                       2.   Define and build team (Who)
                       3.   Define goals and metrics
                       4.   Define governance structure, process and project plan (How)
                       5.   Build leadership commitment
         Output        •    Project Brief/Assignment
                       •    Project plan incl. milestones, tasks, responsibilities, 1st resource planning per phase
                       •    Team is established
                       •    Common understanding about the project has been created
         Gate          •    Stop/Go decision
                       •    Team established and resources have been committed
         Tools         •    Kick-off workshop
                       •    Business Model Handbook
                       •    Project Brief
                       •    Project Planning


Source: Marc Sniukas
Discovery
         Gaining insights


         Description   Identify internal and external opportunities

         Input         Project Brief

         Tasks         1.   Company Assessment
                       2.   Market Assessment
                       3.   Industry Assessment
                       4.   Future Trends Assessments
         Output        •    Description AS IS of current business model, market, competition, industry
                       •    Description of opportunities
                       •    Description of first ideas
                       •    Update project planning incl. resources needed estimation for next phase
         Gate          •    Stop/Go Decision
                       •    Is the idea still interesting?
                       •    Is it worth spending the resources for the next phase?
         Tools         •    Desk and real life research
                       •    Who/What/How, Canvas, SWOT
                       •    Customer Profile, Value Curve, Buyer Experience Cycle
                       •    5 Forces


Source: Marc Sniukas
Discovery
         Gaining insights




Source: Marc Sniukas
Who are your non-customers?
Why are they not buying?


“   1st group: „soon-to-be“ non-customers: They minimally use the current offering, but are
    constantly searching for something better or different and ready to switch easily. They are
    closest to the existing customers.

“   2nd group: „refusing“ non-customers: They either do not use or cannot afford to use the
    current market offerings because they find the offerings unacceptable or beyond their means.
    These customers are willing to buy, but not at the current terms.

“   3rd group: „unexplored” non-customers: They are the farthest away from the existing market.
    Typically they are being ignored completely as potential customers by the industry, either
    because they have always been assumed to belong to another industry or are not being
    considered worth the effort.
Development
         Designing options


         Description   •    Development of business model concepts
                       •    Develop business model idea portfolio and evaluate ideas
         Input         •    Insights from discovery phase
                       •    First ideas
         Tasks         1.   Develop Business model innovation idea portfolio
                       2.   Evaluate BM portfolio
                       3.   Develop list of assumptions to be tested
         Output        •    Idea / option portfolio
                       •    Evaluation of ideas
                       •    List of assumptions to be tested incl. resource requirements and how they will be
                            tested
                       •    Business case for each business model
         Gate          •    Go to testing: Stop/Go Decision
                       •    Justified to start conversion/testing/experimentation phase?
                       •    Budget decision
         Tools         •    25 ways
                       •    Who-What-How, Canvas
                       •    Value Curve
                       •    Spider, Scorecard, Hypotheses List, Business Case
Source: Marc Sniukas
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides
Business model innovation 2 day workshop facilitation slides

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Business model innovation 2 day workshop facilitation slides

  • 3. $ 1.600.000,- © Marc Sniukas - Doujak Corporate Development
  • 7. Free Download © Marc Sniukas - Doujak Corporate Development
  • 9. Business Model Innovation How to (re)invent your business. by Marc Sniukas www.sniukas.com
  • 10. What will we do today? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation? 4. What is the Process of Business Model Innovation?
  • 11. What will we do tomorrow? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 12. TEACHING We don‘t teach…we create opportunities to learn! LEARNING
  • 13. Getting to know each other “ Who are you? “ What is your work (company, position, …) “ Why are you here? “ What do you know about business model innovation?
  • 15. How to (re)invent your Business Model? The Framework: Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 16. What are we going to do today? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation? 4. What is the Process of Business Model Innovation?
  • 17. How to (re)invent your Business Model? The Framework: Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Why to engage in business model innovation? Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 18. “Get the business model wrong, and there is almost no chance of success...” Prof. David Teece University of California, Berkley.
  • 19. “Business model innovation matters and it is a top priority of CEOs.”
  • 20. „Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“ Business Week, November 16, 2009
  • 21. Why do Business Model Innovation? Benefits cited by business model innovators Source: IBM Global CEO Study 2006
  • 22. Why do Business Model Innovation? Profit outperformers focus on business model innovation Source: IBM Global CEO Study 2006
  • 23. Why do Business Model Innovation? Operating margin growth in excess of competitive peers Source: IBM Global CEO Study 2006
  • 24. Why do Business Model Innovation? Business model innovators outperform traditional innovators Source: Businessweek / BCG Innovation Survey 2008
  • 25. Why is it important to you? How Business Model Innovation can help you. Entrepreneurs Managers Public Officers Market Entry Growth Enhanced Value for Citizens Commercializing a Competitive Innovative New New Technology Advantage Approaches needed Create New Markets Fend of new New Public entrants Management
  • 26. Is it time to renew your business model? How to tell: Environmental Forces
  • 27. Is it time to renew your business model? How to tell: Product/Technology Life Cycle Stagnating or declining revenues Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
  • 28. Is it time to renew your business model? How to tell: Product/Technology Life Cycle Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82
  • 31. What will we do today? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation? 4. What is the Process of Business Model Innovation?
  • 32. How to (re)invent your Business Model? The Framework and Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Dimensions and components of Business Models and Business Model Innovations. Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 33. What is a business model? Some definitions “ “A business model is simply the ‘way of doing business’ that a firm has chosen: its entire system for creating and providing consistent value to customers and earning a profit from that activity, as well as benefit for its broader stakeholders. It refers to the core architecture or configuration of the firm, specifically how it deploys all relevant resources (not just those within the company boundaries), to create differentiated value for customers at a profit…” (Davenport, T. H., M. Leibold and S. Voelpel (2006). Strategic Management in the Innovation Economy. Publicis Wiley.) “ The business model is a company’s answer to the question of how to make money in its chosen business. It describes, “…as a system, how the pieces of a business fit together” (Magretta, J. (2002). "Why Business Models Matter." Harvard Business Review 80(5) May: 86-92.)
  • 34. What is a business model? The essence and main components WHO WHAT HOW is your do you offer do you customer? your customers? do this? Markets Products & Services Create Value Customer Segments Solutions Deliver Value Individual Customers Experiences Capture Value Value Proposition
  • 35. Describing your business business model Please describe your business by answering these 3 questions. Who is your customer? What is your value proposition? How are you creating and delivering your offer? Source: Marc Sniukas
  • 36. What is a business model? The different layers / levels of detail of a business model • Offering Value • Customer Proposition • Needs and job to be done • Creation Value • Delivery • Capture • Activities and processes • Network and value chain partners Organization • Resources, assets and capabilities • Governance structures and processes Relationships • to all stakeholders • Costs Financials • Revenues • Profit Source: Marc Sniukas
  • 37. What is a business model? Tools for describing your business model Source: Accenture Source: The Boston Consulting Group Source: Innosight Source: businessmodelgeneration.com
  • 38. Describing your business model Source: Linder, J. C. and S. Cantrell (2000). "Changing Business Models: Surveying the Landscape." A Working Paper from the Accenture Institute for Strategic Change.
  • 39. Describing your business model Four components Source: Johnson, M, Christensen, C, & Kagermann, H 2008, Reinventing Your Business Model. Harvard Business Review, 86
  • 40. Describing and visualizing your business model Why is it important? Be able to communicate it Speak a common language See the big picture Have a basis for innovation
  • 41. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 42. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your offer? Which „jobs KEY to be done‚ RESOURCES CHANNELS do you satisfy? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 43. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your Who‘s your offer? customer? Which „jobs Which KEY to be done‚ RESOURCES CHANNELS customer do you segments do satisfy? you serve? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 44. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your Who‘s your offer? customer? Which „jobs Which KEY to be done‚ RESOURCES CHANNELS customer do you segments do satisfy? you serve? How do you reach your customers? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 45. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your relationship What‘s your to the Who‘s your offer? customer? customer? What‘s your Which „jobs image? Which KEY to be done‚ RESOURCES CHANNELS customer do you segments do satisfy? you serve? How do you reach your customers? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 46. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? processes? customer? What‘s your Which „jobs image? Which KEY to be done‚ RESOURCES CHANNELS customer do you segments do satisfy? you serve? How do you reach your customers? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 47. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? processes? customer? What‘s your Which „jobs image? Which KEY to be done‚ RESOURCES CHANNELS customer do you segments do satisfy? you serve? What are your How do you main assets reach your and customers? competencies? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 48. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? You are processes? customer? What‘s your your main Which „jobs image? suppliers, Which KEY to be done‚ partners RESOURCES CHANNELS customer do you and segments do satisfy? alliances? you serve? What are your How do you main assets reach your and customers? competencies? COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 49. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? You are processes? customer? What‘s your your main Which „jobs image? suppliers, Which KEY to be done‚ partners RESOURCES CHANNELS customer do you and segments do satisfy? alliances? you serve? What are your How do you main assets reach your and customers? competencies? COST CENTRES REVENUE STREAMS What is driving cost? Source: Canvas by businessmodelgeneration.com
  • 50. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? You are processes? customer? What‘s your your main Which „jobs image? suppliers, Which KEY to be done‚ partners RESOURCES CHANNELS customer do you and segments do satisfy? alliances? you serve? What are your How do you main assets reach your and customers? competencies? COST CENTRES REVENUE STREAMS What is How do you driving cost? make money? Source: Canvas by businessmodelgeneration.com
  • 53. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS Source: Canvas by businessmodelgeneration.com
  • 54. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES What‘s your What are relationship your core What‘s your to the activities and Who‘s your offer? customer? You are processes? customer? What‘s your your main Which „jobs image? suppliers, Which KEY to be done‚ partners RESOURCES CHANNELS customer do you and segments do satisfy? alliances? you serve? What are your How do you main assets reach your and customers? competencies? COST CENTRES REVENUE STREAMS What is How do you driving cost? make money? Source: Canvas by businessmodelgeneration.com
  • 55. Describing your business model The business model canvas KEY KEY OFFER RELATIONSHIPS CLIENTS PARTNER ACTIVITIES R1 Sales Offer 1 Customer 1 You are Offer 2 your main Customer 2 suppliers, KEY partners RESOURCES CHANNELS and alliances? What are your Direct Sales main assets and competencies? COST CENTRES REVENUE STREAMS What is How do you driving cost? make money? Source: Canvas by businessmodelgeneration.com
  • 56. What will we do today? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation? 4. What is the Process of Business Model Innovation?
  • 57. ‚Hey! They’re lighting their arrows! Can they do that?‛ © Marc Sniukas - Doujak Corporate Development
  • 58. Business Model Innovation is about... The essence WHO WHAT HOW is your do you offer do you customer? your customers? do this? New Ways of New Markets New Offers Doing Business New Value Propositions Source: Marc Sniukas
  • 59. The Innovation Map 4 Types of Innovation Internal Operational Management Innovation Innovation Continuous Discontinuous Product & Service Business Model Innovation Innovation External Source: Marc Sniukas
  • 61. Nine Inch Nails KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS Business Model Canvas teamplate by : businessmodelgeneration.com – Content by Marc Sniukas
  • 66. MinuteClinic Traditional Approach Business Model Innovation Who “ Everybody “ Everybody What “ Usually full treatment “ Focus on basic treatments “ Services covered by health insurance “ Quick “ Special treatment for additional cost “ Convenient “ Affordable How “ A range of specialist “ Generalists “ Special facilities “ Located in shopping malls / inside “ One central location CVS pharmacies “ “Solution shops” “ Multiple locations “ “Retail model” Source: Marc Sniukas
  • 68. Grameen Bank KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS Business Model Canvas template by : businessmodelgeneration.com – Content by Marc Sniukas
  • 69. Grameen Bank Traditional Approach Business Model Innovation Who “ (Rich and middle class) people who “ “Low income clients” are reliable to pay back the credits or “ Poor people who would not get have enough assets as security. any loans from traditional banks (especially women) What “ Classic loans, usually for larger sums “ Small loans to “unbanked people” to buy assets. How “ Strong risk management “ About 97% make their payments. “ The returns from the interests belong “ The borrowers are the owners of to the bank/ shareholders the bank. “ Profit focus “ The profit of the bank goes back to the owners. “ There is no collateral. No lawyers. “ Social business focus Source: Marc Sniukas
  • 71. McCafé KEY KEY VALUE RELATIONSHIPS CUSTOMERS PARTNERS ACTIVITIES PROPOSITION KEY RESOURCES CHANNELS COST CENTRES REVENUE STREAMS Business Model Canvas template by : businessmodelgeneration.com
  • 72. McCafé Traditional Approach Business Model Innovation Who “ People who want a quick bite to eat “ People who want to sit down and “ Get in, order, get served quickly, get remain seated for a while out quickly again “ Create a “3rd place” à la Starbucks What “ Pre-made food prepared constantly “ Coffee and cake according to demand “ Made to order (coffee) “ Standard menus “ Pre-produced (cakes) “ Some variations allowed How “ 1 counter “ 2 counters “ Standardized processes “ Separate seating area for McCafé “ Central locations with high “ Key is to increase share of wallet frequencies of the customer and keep him for “ The key is to serve a maximum a longer period of time in the number of people during a given restaurant time “ Innovative use of existing assets. Source: Marc Sniukas
  • 74. Nintendo Wii Traditional Approach Business Model Innovation Who “ Kids “ Everybody from 4-99 “ Hard Core Gamers “ The whole family “ Casual Gamers What “ High Tech – High Performance “ Family Console Console “ Low tech console “ Focus on fun rather than technical performance How “ High tech, high end processors for “ Low tech, lower power processors, speed and graphics, connect over the no additional features internet, additional features (DVD, “ New movement technology internet,...)  lower cost  high cost  lower sales price (190.- €)  high sales price (250-300.- €) Source: Marc Sniukas
  • 75. How innovative is your business model? The Business Model Evaluation Spider Dimension Scale 1 5 approach traditional innovative Who Customers Profitability existing customers most profitable 3rd tier noncustomers least profitable Satisfaction most satisfied least satisfied Segmentation differences commonalities Buyer single buyer chain of buyers Attributes vs attributes circumstances Circumstances What Total Solution Appeal single product according to industry (either functional or emotional) total solution; experiences against conventional logic Product vs product function Function Features improve and raise selectively raise, reduce, create, and eliminate How Customer interface conventional logic experiences; every element of buying cycle addressed Revenue streams conventional logic new streams and pricing strategic pricing Cost not aligned with strategic price of the masses aligned with strategic price of the masses Activity system low fit, me too logic high fit, creative rearrangement of activities Assets existing assets new assets Source: Marc Sniukas
  • 76. How innovative is your business model? The Business Model Evaluation Spider Assets 5 Activity System Customers 4 Cost Profitability 3 Revenue Streams Satisfaction 2 1 Customer Interface Segmentation Features Buyer 1 = conventional me too Function Circumstances 2 = imitative innovation Appeal Total Solution 3 = slightly innovative; some new ideas; not too risky 4 = innovative; risky new ideas 5 = radically different Source: Marc Sniukas
  • 77. What will we do today? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation? 4. What is the Process of Business Model Innovation?
  • 78. How to (re)invent your Business Model? The Framework and Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities How to achieve business model innovation within your company? Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 79. The process of business model innovation A discovery driven approach Setting the Stage A Discovery-Driven Approach Source: Marc Sniukas
  • 80. Source: Marc Sniukas How to (re)invent your Business Model? The Process “ “ Define the purpose, scope and focus of innovation activities Align business and innovation strategies “ Build leadership alignment & commitment • Identifying “ Build a common language and understanding internal and “ Definition of governance structures and processes external opportunities • Sensing, seeking Setting the Stage and shaping opportunities “ Bringing successful ideas to market • Describe the “ Financial impact current business “ Incubation model “ Acceleration • Explore and “ Transition understand A Discovery-Driven consumer and customer needs, Approach motivations, behaviors • Understand emerging “ Turn ideas into market markets, industry ready concepts and socio- “ Road-test the idea portfolio ecological trends with key stakeholders, consumers, internal and external “ Design new business models “ Prototyping, Technical feasibility “ Develop and select ideas “ Experimentation & learning “ Develop an idea portfolio “ Customer & stakeholder feedback “ Idea Generation (In-house, cross-units, external) “ Business planning, venturing, secure founding “ Idea Evaluation “ Decide of organizational and governance structures “ Idea Selection “ Evolution & optimization “ Strategic decision making
  • 81. Setting the stage Getting ready Description Project Set Up Input (Business Model Innovation idea) Tasks 1. Define purpose, scope and focus (Why) 2. Define and build team (Who) 3. Define goals and metrics 4. Define governance structure, process and project plan (How) 5. Build leadership commitment Output • Project Brief/Assignment • Project plan incl. milestones, tasks, responsibilities, 1st resource planning per phase • Team is established • Common understanding about the project has been created Gate • Stop/Go decision • Team established and resources have been committed Tools • Kick-off workshop • Business Model Handbook • Project Brief • Project Planning Source: Marc Sniukas
  • 84. Discovery Gaining insights Description Identify internal and external opportunities Input Project Brief Tasks 1. Company Assessment 2. Market Assessment 3. Industry Assessment 4. Future Trends Assessments Output • Description AS IS of current business model, market, competition, industry • Description of opportunities • Description of first ideas • Update project planning incl. resources needed estimation for next phase Gate • Stop/Go Decision • Is the idea still interesting? • Is it worth spending the resources for the next phase? Tools • Desk and real life research • Who/What/How, Canvas, SWOT • Customer Profile, Value Curve, Buyer Experience Cycle • 5 Forces Source: Marc Sniukas
  • 85. Discovery Gaining insights Source: Marc Sniukas
  • 86. What does your customer want? The Customer Profile What does he THINK and FEEL? Fears, worries, aspirations, wants, needs, frustrations,.... What does he What does he HEAR? SEE? What others Environment say Others Influencers What does the Companies market offer? ... ... What does he DO? Behaviors Attitudes Appearance ...
  • 87. What does your customer want? The Customer Profile What does he THINK and FEEL? Fears, worries, aspirations, wants, needs, frustrations,.... What does he What does he HEAR? SEE? What others Environment say Others Influencers What does the Companies market offer? ... ... What does he DO? Behaviors Attitudes Appearance ... Source: Xplane
  • 88. How do you reach your customers? Buyer Experience and Channels Pre-Purchase Steps The Six Stages of the Buyer Experience Cycle Awareness Evaluation Purchase Delivery Use Supplements Maintenance Disposal Customer Productivity: In which stage are the biggest blocks to customer productivity? The Six Utility Levers Simplicity: In which stage are the biggest blocks to simplicity? Convenience: In which stage are the biggest blocks to convenience? Risk: In which stage are the biggest blocks reducing risk? Fun and image: In which stage are the biggest blocks fun and image? Environmental In which stage are the biggest blocks to environmental friendliness? friendliness: Source: Marc Sniukas. Adapted from Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
  • 89. How do you reach your customers? Buyer Experience and Channels Pre-Purchase Steps The Six Stages of the Buyer Experience Cycle Awareness Evaluation Purchase Delivery Use Supplements Maintenance Disposal Channels Source: Marc Sniukas
  • 90. What is your value proposition? Low Cost Airline Average Airline Car Transport high low Price Meals Lounges Seating Class Hub Connectivity Friendly Service Frequent Point to Choice Point Departures Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
  • 91. What is your value proposition? The Value Curve high low
  • 92. Who are your non-customers? Why are they not buying? “ 1st group: „soon-to-be“ non-customers: They minimally use the current offering, but are constantly searching for something better or different and ready to switch easily. They are closest to the existing customers. “ 2nd group: „refusing“ non-customers: They either do not use or cannot afford to use the current market offerings because they find the offerings unacceptable or beyond their means. These customers are willing to buy, but not at the current terms. “ 3rd group: „unexplored” non-customers: They are the farthest away from the existing market. Typically they are being ignored completely as potential customers by the industry, either because they have always been assumed to belong to another industry or are not being considered worth the effort.
  • 95. What will we do tomorrow? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 96. Thanks for your attention! ....See you tomorrow.
  • 97. Business Model Innovation How to (re)invent your business. by Marc Sniukas www.sniukas.com
  • 98. What did we do yesterday? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation?
  • 99. How to (re)invent your Business Model? The Framework: Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 100. What did we do yesterday? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation?
  • 101. How to (re)invent your Business Model? The Framework: Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Why to engage in business model innovation? Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 102. Why do Business Model Innovation? Benefits cited by business model innovators Source: IBM Global CEO Study 2006
  • 103. Is it time to renew your business model? How to tell
  • 104. What did we do yesterday? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation?
  • 105. How to (re)invent your Business Model? The Framework and Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Dimensions and components of Business Models and Business Model Innovations. Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 106. What is a business model? The essence and main components Source: Marc Sniukas
  • 107. What is a business model? Tools for describing your business model Source: Accenture Source: The Boston Consulting Group Source: Innosight Source: businessmodelgeneration.com
  • 108. What did we do yesterday? Agenda 1. Why is Business Model Innovation important? 2. What is a Business Model? 3. What is Business Model Innovation?
  • 109. How to (re)invent your Business Model? The Framework and Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities Dimensions and components of Business Models and Business Model Innovations. Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 110. ‚Hey! They’re lighting their arrows! Can they do that?‛ © Marc Sniukas - Doujak Corporate Development
  • 111. Business Model Innovation is about... The essence Source: Marc Sniukas
  • 113. What will we do today? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 114. What will we do today? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 115. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 116. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 117. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 118. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 119. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 120. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 121. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 122. The Telco Business Model 3 models in one Source: businessmodelgeneration.com
  • 123. Bharti Airtel Limited A new business model for the telco industry “ Bharti Airtel Limited, the largest telecom service provider in India, chose to strategically outsource its core functions. “ For a typical telecom operator, the pain point during the growth phase is planning for network requirements and preparing budgets for such a capital expenditure. “ Capacity has to be built ahead of demand, which usually means the telecom operator has to absorb the cost of unused capacity. “ Source: http://blogs.hbr.org/cs/2010/05/reverse_innovation_success_in_the_tele. html
  • 124. Business Model Innovation is about… The Essence WHO WHAT HOW is your do you offer do you customer? your customers? do this? New Ways of New Markets New Offers Doing Business New Value Propositions Source: Marc Sniukas
  • 125. Business Model Innovation Where to start? New Markets New Value Proposition New Ways New of doing Offers business Source: Marc Sniukas
  • 126. What will we do today? Agenda 1. How to develop and design new Business Models? I. Who is the customer? II. What is the need / job to be done? III. How are you satisfying that need?
  • 127. What will we do today? Agenda 1. How to develop and design new Business Models? I. Who is the customer? II. What is the need / job to be done? III. How are you satisfying that need?
  • 128. Which customers do you target? Creating new markets existing ↔ noncustomers (2nd and 3rd tier) most profitable ↔ less profitable most satisfied ↔ less satisfied (1st tier) specific buyer ↔ chain of buyers focus on differences ↔ focus on commonalities focus on finer segmentation ↔ focus on de-segmentation focus on attributes focus on circumstances (of customers and products) ↔ (needs and the job done) Source: Marc Sniukas
  • 129. Who is the customer? Satisfaction B2B B2C Profitability Non-Customers Characteristics Demographics Source: Marc Sniukas
  • 130. What will we do today? Agenda 1. How to develop and design new Business Models? I. Who is the customer? II. What is the job to be done? III. How are you satisfying that need?
  • 131. What is the job to be done? 1. What problem is the customer trying to solve? “*Customer] wants to [solve problem] in [this context+.” 2. Which features are important to the customer? What does he want and value? 3. What are barriers for the customer? - Price: How cheap / expensive are existing solutions? - Access: How easy / complicated is it to get / install existing solutions? - Usage: How easy / complicated is it for the customer to use existing solutions? - Experience: What are barriers to a good experience?
  • 132. How do you reach your customers? Buyer Experience and Channels Pre-Purchase Steps The Six Stages of the Buyer Experience Cycle Awareness Evaluation Purchase Delivery Use Supplements Maintenance Disposal Customer Productivity: In which stage are the biggest blocks to customer productivity? The Six Utility Levers Simplicity: In which stage are the biggest blocks to simplicity? Convenience: In which stage are the biggest blocks to convenience? Risk: In which stage are the biggest blocks reducing risk? Fun and image: In which stage are the biggest blocks fun and image? Environmental In which stage are the biggest blocks to environmental friendliness? friendliness: Source: Marc Sniukas. Adapted from Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
  • 133. What will we do today? Agenda 1. How to develop and design new Business Models? I. Who is the customer? II. What is the need / job to be done? III. How are you satisfying that need?
  • 134. How to you define your product? Creating new offerings start anew, or use existing assets in a focus on existing assets ↔ new way single product or service ↔ total solution, bundling functional appeal ↔ emotional appeal and experiences focus on function fulfilled and the focus on product ↔ job-to-be-done raise, reduced, create, eliminate build new features ↔ selectively Source: Marc Sniukas
  • 135. How do you do business? Creating new ways for creating, delivering and caputring value (co-creating) experiences conventional customer interface ↔ easy to do business with conventional pricing strategic pricing of the masses (either to cover cost or benchmarked against ↔ (benchmarked against substitutes and alternative competitors) industries) cost-plus thinking ↔ price-minus thinking; target costs network (with customers, suppliers, integrate activities ↔ partners, alliances) low fit of activities high fit of activities (internally and externally) ↔ (internally and externally) Source: Marc Sniukas
  • 136. How to (re)invent your Business Model? 25 Strategies WHO #11 Target non-customers #1 Challenge industry assumptions #12 Target less profitable customers WHAT #13 Target the least satisfied customers #2 Offer complementary products and services #14 Target the chain of buyers #3 Offer solutions and experiences #15 Segment according to commonalities #4 Offer bundles #16 Segment according to circumstances #5 Switch your appeal: functional versus emotional #17 Desegment the customer based #6 Focus on the job to be done HOW #7 Selectively eliminate, reduce, raise and create #18 Reinvent the customer interface (channels) #8 Look at subsitutes #19 Reinvent your customer relationships #9 Expand the use of your assets and capabilities #20 Invent new revenue streams #10 Look at the customer experience #21 Price differently #22 Reinvent you cost base #23 Re-assess your key activities #24 Collaborate with suppliers, partners, the network and ecosystem #25 Look at completely different industries Source: Marc Sniukas
  • 137. What is your value proposition? Type Features Product – Service – Solution – Experience Focused – Extensive Form Custom Tangible – Intangible Generic – Tailored Breadth Lifetime Single – Bundled Consumable – Durable
  • 138. How is the value proposition purchased? Supplier Support Direct – Indirect Light – Heavy Frequency Availability Often – Rarely On-Demand – Limited Timing Autonomy Immediate – Delayed Assisted – Independent Strategy Location Planned – Unplanned Traditional – New
  • 139. How is payment done? Form Price Cash – Financed Fixed – Variable Frequency Frequency Pay per item – Flat fee Once – Installment Timing Payer Up-front – Afterwards Single – Multiple
  • 140. What is your value proposition? Low Cost Airline Average Airline Car Transport high low Price Meals Lounges Seating Class Hub Connectivity Friendly Service Frequent Point to Choice Point Departures Following Kim and Mauborgne “Blue Ocean Strategy” Harvard Business School Press, 2005
  • 141. What will we do today? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 142. How to evaluate business models? 3 different types of experimentation
  • 143. How to evaluate business models? ‚Paper‛ based approach Area Rating Description What we What we assume... know... Strategy How well does the idea fit with our current 0 5 10 strategy?  expanding or defending a What is the strategic current business purpose of the idea?  building a new one that has already been identified  laying the foundations for potential new businesses Organization Resources & Competencies Which do we need? Which do exist already? Which need to be build? Change need Change readiness Finance Revenue potential Financial (Qty x Price) Implications Cost (fix + variable) Unit Margin Target How innovative is the model? Does fit our organization? Can Does it have the potential for we implement it? Do we have competitive advantage the capabilities and through differentiation? resources?
  • 144. How to evaluate business models? ‚Paper‛ based approach Strategy Organization Financials • How well does the idea fit with • Resources & Competencies Revenue potential our current strategy? • Which do we need? Cost • What is the strategic purpose of • Which do exist already? Unit Margin Target the idea? • Which need to be build? Cash Flow Payback expanding or defending a • Change need Net Present Value current business • Change readiness building a new one that has already been identified laying the foundations for potential new businesses Innovation Risks Success Factors • How innovative is the new • Competition • Strengths model? • Weaknesses • Opportunities Known to company and • Threats industry • Expected barriers Known to industry, new to company New for company and industry
  • 145. What will we do today? Agenda 1. How to develop and design new Business Models? 2. How to evaluate Business Models? 3. Case Study 4. What are characteristics of Business Model Innovators?
  • 146. How to (re)invent your Business Model? The Framework and Dimensions to consider Context Conditions Surrounding Business Model Innovation Activities Purpose Content Input to Result of Business Model Process Business Model Innovation Flow of Business Model Innovation Innovation Activities Activities Activities How to achieve business model innovation within your company? Apdated from De Wit and Meyer „Strategy: Process, Content, Context“ 3rd edition 2004 Thompson Learning
  • 147. The process of business model innovation A discovery driven approach Setting the Stage A Discovery-Driven Approach Source: Marc Sniukas
  • 148. Source: Marc Sniukas How to (re)invent your Business Model? The Process “ “ Define the purpose, scope and focus of innovation activities Align business and innovation strategies “ Build leadership alignment & commitment • Identifying “ Build a common language and understanding internal and “ Definition of governance structures and processes external opportunities • Sensing, seeking Setting the Stage and shaping opportunities “ Bringing successful ideas to market • Describe the “ Financial impact current business “ Incubation model “ Acceleration • Explore and “ Transition understand A Discovery-Driven consumer and customer needs, Approach motivations, behaviors • Understand emerging “ Turn ideas into market markets, industry ready concepts and socio- “ Road-test the idea portfolio ecological trends with key stakeholders, consumers, internal and external “ Design new business models “ Prototyping, Technical feasibility “ Develop and select ideas “ Experimentation & learning “ Develop an idea portfolio “ Customer & stakeholder feedback “ Idea Generation (In-house, cross-units, external) “ Business planning, venturing, secure founding “ Idea Evaluation “ Decide of organizational and governance structures “ Idea Selection “ Evolution & optimization “ Strategic decision making
  • 149. Setting the stage Getting ready Description Project Set Up Input (Business Model Innovation idea) Tasks 1. Define purpose, scope and focus (Why) 2. Define and build team (Who) 3. Define goals and metrics 4. Define governance structure, process and project plan (How) 5. Build leadership commitment Output • Project Brief/Assignment • Project plan incl. milestones, tasks, responsibilities, 1st resource planning per phase • Team is established • Common understanding about the project has been created Gate • Stop/Go decision • Team established and resources have been committed Tools • Kick-off workshop • Business Model Handbook • Project Brief • Project Planning Source: Marc Sniukas
  • 150. Discovery Gaining insights Description Identify internal and external opportunities Input Project Brief Tasks 1. Company Assessment 2. Market Assessment 3. Industry Assessment 4. Future Trends Assessments Output • Description AS IS of current business model, market, competition, industry • Description of opportunities • Description of first ideas • Update project planning incl. resources needed estimation for next phase Gate • Stop/Go Decision • Is the idea still interesting? • Is it worth spending the resources for the next phase? Tools • Desk and real life research • Who/What/How, Canvas, SWOT • Customer Profile, Value Curve, Buyer Experience Cycle • 5 Forces Source: Marc Sniukas
  • 151. Discovery Gaining insights Source: Marc Sniukas
  • 152. Who are your non-customers? Why are they not buying? “ 1st group: „soon-to-be“ non-customers: They minimally use the current offering, but are constantly searching for something better or different and ready to switch easily. They are closest to the existing customers. “ 2nd group: „refusing“ non-customers: They either do not use or cannot afford to use the current market offerings because they find the offerings unacceptable or beyond their means. These customers are willing to buy, but not at the current terms. “ 3rd group: „unexplored” non-customers: They are the farthest away from the existing market. Typically they are being ignored completely as potential customers by the industry, either because they have always been assumed to belong to another industry or are not being considered worth the effort.
  • 153. Development Designing options Description • Development of business model concepts • Develop business model idea portfolio and evaluate ideas Input • Insights from discovery phase • First ideas Tasks 1. Develop Business model innovation idea portfolio 2. Evaluate BM portfolio 3. Develop list of assumptions to be tested Output • Idea / option portfolio • Evaluation of ideas • List of assumptions to be tested incl. resource requirements and how they will be tested • Business case for each business model Gate • Go to testing: Stop/Go Decision • Justified to start conversion/testing/experimentation phase? • Budget decision Tools • 25 ways • Who-What-How, Canvas • Value Curve • Spider, Scorecard, Hypotheses List, Business Case Source: Marc Sniukas

Notas del editor

  1. 7th album