describe and improve your business model
DESCRIPTION
Here the slides for the talk I am giving at an event organized by Enterprise Ireland. I am quite honored to speak together with Prof Henry Chesbrough, author of Open Business Models... He is opening the conference with his talk, while I am concluding.TRANSCRIPT
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How to Describe and Improveyour Business ModelOpeninnovation, Dublin, 24 Oct 2007
© Arvetica, September 2007
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photos are from flickr under a « creative commons » license - authors are referenced in the comment section
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“Business model innovation matters” and it is a top priority of CEOs
IBM Global CEO Survey
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How Do We Describe Business Models Today?
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Going to War without a Map…
Karl von Clausewitz (~1800)
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Here
CEOs10°
Managers60°
Here
Staff360°
Ok
Insufficiently Well
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The Result
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Could it Be Different?
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It Exists in Business Process Modeling
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A Management Toolbox for Business Model Design and Innovation
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A Template to Describe Business Models
42’941 downloads
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Describe a Business Model: 9 Building Blocks
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE
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Example: Bizner Bank
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
entrepreneurs
automatized relationship
BizBallance (integrated banking
and accounting)
monthly fee
Reeleezee
IT infra mgmt account mgmt,
transactions, etc.
IT infrastructure, marketing,
partnership costs
DISTRIBUTION CHANNELS
Web
KEY ISSUES TO SOLVE
IT, accounting, banking
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Xerox 914 Business Model
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE
large companies
transactional
sales team
1 time sales fee
photocopiersR&D manufacturing
regular
large companies
lease high-end photocopiers
sales teams
lease & 4ct per copy (2k+)
financing & billing
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REVENUESCOSTS
KEY ISSUES TO SOLVE ACTIVITIES
PARTNERS RELATIONS
OFFER CLIENTSCHANNELS
total remanufacturing solutions of high end IT platforms
manufacturing
long term deep
integration
brand manufacturers
customers base
manufacturing
IT brand manufacturer
s
sales commission
re-marketing
inventory management
systems knowledge
manage secondary
supply chain
reverse logistics
manufacturing
inventory
« sales » team
brand manufacturers of high end IT
platforms
flat fee
Multis Example
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The Process
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find a way to play poker to unlock these modelsProf Henry Chesbrough, Berkeley
“”
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5 Steps to Business Model Design & Renewal
→ describe
existing business model
→ assess
strengths and weaknesses
→ brainstorm on
improvements & opportunities
→ turn new model
into a project roadmap
1 2 43VISUALIZEVISUALIZE ASSESSASSESS RENEWRENEW PLANPLAN 5 IMPLEMENTIMPLEMENT
→ implement
project roadmap
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Visualize
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Visualizing
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Visualizing Amazon.com
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REVENUESCOSTS
KEY ISSUES TO SOLVE ACTIVITIES
PARTNERS RELATIONS
OFFER CLIENTSCHANNELS
selling stuffon the Web
IT infra
automatized relationships
mass customer
data servicesAmazon.com
data grid
partners
selling stuff
Amazon.com
warehousing & distribution
distribution
content management
product selection
product search
marketing
affiliates
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Assess, Design & Renew
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good ideas are widely distributed, nobody has a monopoly on innovation
Prof Henry Chesbrough, Berkeley
“
”
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Assessing Amazon.com
• where are some of Amazon.com‘s highest costs located?
• what are some of Amazon.com‘s core competencies?
• how could they leverage these competencies?
• how could they leverage investments?
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REVENUESCOSTS
KEY ISSUES TO SOLVE ACTIVITIES
PARTNERS RELATIONS
OFFER CLIENTSCHANNELS
selling stuffon the Web
IT infra
automatized relationships
mass customer
data servicesAmazon.com
data grid
partners
selling stuff
Amazon.com
warehousing & distribution
distribution
content management
product selection
product search
marketing
affiliates
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Leveraging IT at Amazon.com
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REVENUESCOSTS
KEY ISSUES TO SOLVE ACTIVITIES
PARTNERS RELATIONS
OFFER CLIENTSCHANNELS
selling stuffon the Web
IT infra
automatized relationships
mass customer
data servicesAmazon.com
data grid
partners
selling stuff
Amazon S3
Amazon.com
Internet API
Web2.0 companies
warehousing & distribution
distribution
content management
product selection
A9 product search
data storage fees
product search
search engine revenues
e-commerce sites
Internet
marketing
affiliates
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Changing the Business Model: Examples
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Building on Existing Customer Relationships:Walmart Clinics
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE shoppers
frequent relationship
WalmartClinics
health services
medical knowledge and staff
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Changing the Game:Cirque de Soleil
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE
theater & opera visiitors
artistic circus without lions
stage & manage spectacle &
logistics
create art & atmosphere
higher ticket prices
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Demand-Creating Alliances:Intel Processor Platform
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
PARTNER NETWORK
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE
end usersspeedy processors
partners with ever “heavier” applications
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Planning & Implemention
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Introducing a Family Office Service through a Partnership
OFFER
COST STRUCTURE
CLIENTRELATIONSHIPS
CLIENTSEGMENTS
COMPETENCIES, ACTIVITIES,
RESOURCES
REVENUEFLOWS
DISTRIBUTION CHANNELS
KEY ISSUES TO SOLVE
affluent clients (100k-1+mio)
tight personal relationships
branches & bankers
local private banking
mainly product revenues
ultra high net worth individuals
family office services
revenue sharing agreement
local branch of family office
tight relationships with UHNWI
PARTNER NETWORKPARTNER NETWORK
independent multi-family
office
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OFFER
CLIENT RELATIONSHIPS
CLIENT SEGMENT
ACTIVITIES
PARTNER
REVNUE STREAMS
ACQUISITION CHANNELS
Project Roadmap
family office services
UHNWI relationships
UHNWI
client trust, internal cooperation
mutli-family office partner
revenue sharing
relationship managers & new
office
design collaboration process
training program develop marketing material
internal concept presentation
generate prioritized prospect list
work out client presentation
establish acquisition learning process
relationship manager collaboration process
team set-up
client reception area
profit center set-up
set-up CRM tool
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the only thing that’s not designed is nature
Dave Kelly, IDEO
“”
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business people don’t just need to understand designers
better; they need to become designers
Roger Martin, Dean Rotman School
“
”
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Thank You
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www.arvetica.com
business-model-design.blogspot.com
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Alexander Osterwalder
Before joining Arvetica Alex founded Business Model Design, a consulting boutique specialized in
business model innovation. Besides consulting the private sector he was also involved in building
up a globally active NGO based in Thailand in the field of knowledge management, HIV/AIDS and
malaria. Prior to consulting, Alex worked at the University of Lausanne, as an entrepreneur in the
banking sector and as an online journalist for the major Swiss business magazine BILANZ. He
holds a PhD and Masters degree of the HEC Business School of the University of Lausanne,
Switzerland. Alex is an active member of the IMD based Open World Initiative (OWI).
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Waster Water Treatment Example
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offer customer segment
revenue stream
distribution channel
waste water treatment system
Canadian mining sites
one time sales fee
sales force
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sell waste water treatment system
Canadian mining sites
one time sales fee
sales forcetotal waste water
treatment management
Canadian mining sites
recurring service fee
sales force
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sell waste water treatment system
Canadian mining sites
one time sales fee
sales forcecore activitiescore capabilities
costs
partner network client relationship
build treatment systems
water treatment knowledge
production costs
suppliers follow-up
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build treatment systems
water treatment
knowledge
production costs
suppliers follow-up
total waste water treatment
management
Canadian mining sites
recurring service fee
sales forcedispatch repair teams
error free systems
development
call center
variable costs of repair services