building the business model
DESCRIPTION
Delivered by Dr Peter BevanTRANSCRIPT
“B ildi th B i M d l”“Building the Business Model”
i.e. – How to make $$$$
Dr Peter [email protected]
Queensland University of Technology
CRICOS No. 00213J
Lets set the scene..
CRICOS No. 00213Ja university for the worldreal R
Capturing Opportunity –the K.I.S.S. Principle
A novel Business Model to deliver your
value propositionAchieve Disruptionp
ORyou WILL be replacedyou WILL be replaced
by someone smarter, quicker and betterquicker and better funded than you!
CRICOS No. 00213Ja university for the worldreal R
Value Proposition??Value Proposition??
Quality PriceMulti Dimensional Multi Dimensional
Core Value Attributes (the non negotiable ‘must haves’)
Peripheral Value Attributes (the ‘nice to haves’)
Tangible (e.g product design)/ Intangible (e.g Brand)
CRICOS No. 00213Ja university for the worldreal R
The Value CurveThe Value Curve
Quality AttributesQuality Attributes
Price Attributes
CRICOS No. 00213Ja university for the worldreal R
ING exampleING..example
CRICOS No. 00213Ja university for the worldreal R
CRICOS No. 00213Ja university for the worldreal R
Four Actions FrameworkValue Innovation:
ADD new attributes that are wanted INCREASE attributes that are highly valuedELIMINATE attributes that are not wantedREDUCE
CRICOS No. 00213Ja university for the worldreal R
The Value Chain internalThe Value Chain - internal
CRICOS No. 00213Ja university for the worldreal R
Dell’s Value Chain
N t j t bl l t
Dell s Value Chain
No stores, just assembly plantsStrong reliance on partners. State of the art productsproducts
I2 SCM. Suppliers nearby
Strong focus on government, education, and businessNo inventory.
Paid before
Online diagnostics, 24/7 customer
service, on-site helpSmall batch, build-to-order
CRICOS No. 00213Ja university for the worldreal R
Paid before making
Apple’s value Chain
St t f th
Apple s value Chain
Apple stores
State-of-the-art products; ease-of-use,
seamless integration
In-house development and
manufacturingCommunity-
building Itunes
CRICOS No. 00213Ja university for the worldreal R
building. Itunes
THE ‘K.I.S.S.’ FUNDAMENTALS
How is to be h d?
Is it sustainable?
Internal Competitive advantage?
cashed?
Is there differentiation?
Reflected by the Is there value?
‘Business Model’
CRICOS No. 00213Ja university for the worldreal R
Book Sellers Business Models
Products Books, Music, DVD’s, Electronics etc.
Books, music, DVD’s
Customers Consumers Consumers
Delivery Post / courier Customer walks in
Differentiation Broadest range, website Quality range, friendly & recommendations/ ordering system
knowledgeable service
Profits High volume Higher prices
CRICOS No. 00213Ja university for the worldreal R
Borders More RecentlyBorders More RecentlyTraditional Superstores Website
Products Books, music, DVD’s
Books, music, DVD’s
Books, music, DVD’s
Customers Consumers Consumers Consumers
D li C t lk i C t lk i M il d iDelivery Customer walks in Customer walks in Mail order or in-store pick-up
Differentiation Quality range, ?? ??friendly & knowledgeable service
Profits Higher prices ?? ??
CRICOS No. 00213Ja university for the worldreal R
BUT....
Didn’t Disrupt with the ‘new’ BM ..
The result...
CRICOS No. 00213Ja university for the worldreal R
The Business ModelThe Business Model
EFFICIENCY
VALUEVALUE
CRICOS No. 00213Ja university for the worldreal R
CRICOS No. 00213Ja university for the worldreal R
Disruption V SustainingDisruption V Sustaining
Di ti i ti ( b tit t )Disruptive innovations are new (substitute) technologies
Delivery of music; Computer memory capacity– Delivery of music; Computer memory capacitySustaining innovations are improvements in the same basic technologysame basic technology– Fuel economy; Computer memory capacity
DISRUPTION ALWAYS WINS
CRICOS No. 00213Ja university for the worldreal R
Disruptive InnovationDisruptive Innovation
Wh / h t i di t d?Who/what is disrupted?– Rivals, mainly (hopefully)
Cons mption process– Consumption process– Production process– Management process– Management process
Attach the disruption to a customer problemAttach the disruption to a customer problem
CRICOS No. 00213Ja university for the worldreal R
The Key Dynamics of Disruptive InnovationThe Tyranny of Success - Performance Oversupply
• Existing technologies become “good enough” for most customers’ needs.
• Different drivers emerge:
> lower-order needs.
> new needs.
• Existing technology cannot satisfy the new driversthe new drivers.
• New ‘disruptive’ technology emerges - “inferior” by traditional measures, but satisfies new drivers.
CRICOS No. 00213Ja university for the worldreal R
So is Apple a disruption model ???So is Apple a disruption model ???
YOU BET YA!!!!
CRICOS No. 00213Ja university for the worldreal R