Small players thriveBattle for scope, consolidate, big players dominateBattle for scale, rapid consolidation, big players dominate CompetitionEmployee, coddle the superstarsService oriented, customer firstCost centered, standards and efficiency •long tail biz models: sell few niche items. Low inventory costs and have a strong platform to make it readily available to interested buyers oex customized legos ooffer wide scope of “non hit” items. oMaybe user generated content oFocus on niche customers oPlatform development is key and costs a lot Internet is used to maintain customer relationship and as the transaction channel •Multiplatform- intermediaries oBring together two groups: only works if both sides come to the table oFacilitating interactions between different groups oMore value happens when there are more people, creates a network effect obring together two or more distinct but interdependent groups of customers. okey is that the oplatform must attract and serve all groups simultaneously olure one segment to the platform with an inexpensive or free Value Proposition in order to subsequently attract users of the platform’s “other side. oDifficulty: which side to subsidize oEx. Xbox, google, facebook ?Wii •Low cost •New untapped market •Double sided platform oGenerate profit from platform and also get royalties from developers oFree- non paying customers are financed by another customer segment ? Supported by getting advertisement ?Optional premium services – freemeium •Offer a diluted product, try to convert people to pay ?Bait and hook- get repeat purchases oBundles/ bait and switch: heavily subsidize one thing to make it the market standard and then sell something to complement it ? Ie razor blades.
Must protect the replacable market though oOpen biz model: collaborating with outside partners ?Opening up a company’s research process to outside parties. ?better exploit their own research by integrating ?outside knowledge, intellectual property, and products into their innovation processes. ?monetized by making them available to outside parties through licensing, joint ventures, or spin-o”s. ? ?Ie GSK: license less popular drug stuff •Design •1. Customer insights: Good business model is built through customers eyes oUnderstand: customers, environment daily routines, concerns, and aspirations •Consumer empathy map •2. Ideation business model innovation is not about copying or benchmarking, but about creating new mechanisms to create value and derive revenues. •design original models that meet unsatisfied, new, or hidden customer needs •four epicenters of business model innovation: resource-driven, offer-driven, customer-driven, and finance-driven. • • • •Team, research, generate as many ideas as possible, reduce down (via defined criteria). Reduce down the number of stuff •3. Visual thinking ousing visual tools such as pictures, sketches, diagrams, and Post-it™ notes to construct and discuss meaning odiscuss, explore, and defi ne business issues. enhances strategic inquiries by making the abstract concrete obusiness model into a tangible and persistent object, and provides a reference point to which participants can always return ohelps people better understand each other. oWhen experts jointly draw a business model, everybody involved gains an understanding of the individual components and develops a shared understanding of the relationships between these components. oIdeas placed in the Canvas trigger new ones. oVisual depiction is the best way to create such a shared understanding.
•4. Prototyping it makes abstract concepts tangible and facilitates the exploration of new ideas. •a prototype is a thinking tool that helps us explore different directions in which we could take our business model. oIe removing a customer segment, or giving away something for free •We’re convinced that new, game-changing business models emerge from deep and relentless inquiry •The attributes of design attitude include a willingness to explore crude ideas, rapidly discard them, then take the time to examine multiple possibilities before choosing to refi ne a few—and accepting uncertainty until a design direction matures • 5. Storytelling •new or innovative business models can be difficult to describe and understand. •challenge the status quo by arranging things in unfamiliar ways. •How will you create value for customers? •How will you make money doing so? •transitions from an existing business model to a new business model, it must convince collaborators to follow. •connect with listeners. •6. Scenarios •guiding the design of new business models or innovating around existing models •how products or services are used, what kinds of customers use them, or customer concerns, desires, and objectives.
Such scenarios build on customer insights •second type of scenario describes future environments in which a business model might compete ohow a model might have to evolve under certain conditions. •whether a single business model is suffi cient to serve them all—or if we need to adapt the model to each segment. •goal of combining scenarios with business model innovation efforts is to help your organization prepare for the future. •Project themselves into concrete “futures” underpinned by hard (though assumed) facts •developed before the business model workshop begins