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Business Modelling
Andrea Guarise
Innovation & Business in ICT, Academic Year 2019/20
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Business Model
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“A business model describes the rationale of
how an organization creates, delivers and
captures value” – starting from an idea
http://en.wikipedia.org/wiki/Business_model (Oct 2018)
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Business Model – other definition
“A business model articulates the logic and
provides data and other evidence that
demonstrates how a business creates and
delivers value to customers” (David J. Teece)
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Business Modelling
© Copyright Andrea Guarise and UNITN I&E Basics team, unauthorized copy not allowedSource: “Open Innovation” by Henry Chesbrough
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Different business models, same market
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Business Model evolution
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Pay per playFree use + pay for:
Access to levelsCreditsLives
Weapons / Features
Rent and trade / Buy and use
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What is the single necessary and sufficient condition for a business?
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Technology
Vision
Management
Company values
Competitive advantage
Strong team
Investors
Business Plan
Money
Product
Customerneed
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A paying customer
Technology
Vision
Management
Company values
Competitive advantage
Strong team
Investors
Business Plan
Money
Product
Customerneed
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Xerox business case
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Xerox company
• 1950s – copies made by mimeograph or dry thermal processes – very poor quality, hard to archive
• Equipment was inexpensive, money was made on supplies
• 90% of machines made < 100 copies per month
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The invention and Xerox solution
• Invention of xerography – much higher quality, longer lasting (Chester Carlson files patent in 1937)
• Haloid Corp buys patent and sells first Xerox machine in 1950
• Problem: Xerox machines six times more expensive than competitive technology, cost per copy about the same
• Kodak, GE, IBM and Arthur D. Little Consultants all concluded there was no market for Xerox machines
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New Business Model identified
• Identify high volume users
• Lease machines instead of selling them, including 2000 copies in the monthly fee; customers pay extra for all further copies
• Improved quality and convenience led to average user making 2000 copies per day!
• More copies made = more money Xerox makes
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Dominant logic of Xerox
• Giving the chance to customers to make more copies is the trick
• New product innovations must lead to higher volume﹘ Duplexing﹘ Collating﹘ Stapling﹘ Copies per minute
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Find an unmet need and build your business around it
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Business Model innovation
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Other examples?
Why Business Modelling is important?
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Type of business model
Service
User
B2B2C
B2G
C2C
B2C
Customer
C2B
Product
B2B
Provider
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Interaction models
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PROVIDER
USER
se
rvic
e
PROVIDER
CUSTOMER
se
rvic
e /
pro
du
ct m
on
ey
PROVIDER
USER / CUSTOMERse
rvic
e /
pla
tfo
rm money CUSTOMER /
PROVIDER
PROVIDER
(CUSTOMER)money
CUSTOMERservice
service /
platform
PROVIDER
USER
se
rvic
e
CUSTOMER
PROVIDER
CUSTOMER /
PROVIDER
se
rvic
e /
pro
du
ct m
on
ey
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BM tools
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Business Model Canvas
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CUSTOMER PROFILEVALUE MAP
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MeltFrame Canvas
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Business ModellingTool
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• State your assumptions (data-driven, insight-driven, or your-vision-driven)
• Design/Build (prototypes or MVPs as tools for collecting data)
• Test (give the prototype to the customer, try to simulate)
• Measure (measure what happens using metrics)
• Learn (deduct: analyse data; compare with hypotheses; derive insights; state what you will change and how)
• REPEAT!
Lean startup method
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Javelin board – Customer centric innovation
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Validation
method better
than a BM
tool
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Waterfall approachvs.
Lean startup / Agile methodology
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More BM examples
IT
Fashion
Retail
Aerospace
Healthcare
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Consumer market
Leisure
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Business Model innovation
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WHAT’S THE TOUGHEST COMPETITOR OF ALL?
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WHAT’S THE TOUGHEST COMPETITOR OF ALL?
THE CUSTOMER’S STATUS QUO
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Thanks!
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Today, 17:30 @ Povo 2, whoever wants: “skill sharing”
Wed, 23 Oct 2019 → graduation day, no lesson
Next class → Monday 28th of October, 14:30 @ A205
- First Battle: Apple vs. Samsung!
IBICT group 3 Battle preparation → Monday 28th of October, 13:30 @ A205 (participants shall receive mail)
What next?
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▪ Definitions elaborated from Wikipedia pages and other sources
▪ Henry Chesbrough, “Open Innovation: The New Imperative for Creating and Profiting from Technology”, 2003
▪ Alex Osterwalder, Yves Pigneur, “Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers”, 2010
▪ Eric Ries, “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Business”, 2011
▪ Steve Blank, “The Four Steps to the Epiphany”, 2013
▪ Revised course material “Economics and Management” UNITN from V. Filippas
▪ BMC video explanation: https://www.youtube.com/watch?v=QoAOzMTLP5s
▪ Build your own BMC: https://canvanizer.com/new/business-model-canvas
▪ The Lean Startup Machine (LSM) material including the Validation Board process created by Trevor Owens
References
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Milena: [email protected]
Andrea: [email protected]
Francesca: [email protected]
Lorenzo: [email protected]
Massimiliano: [email protected]
Chiara: [email protected]
All in one (and more!): [email protected]
Contacts