Business Model Development amp Innovation PReThink Your Business Model Introduction Training Oct 21 st 22 nd Rot Relevance amp Objectives process team mindset Business Model Development amp Innovation ID: 321245
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Slide1
v.camp
: Business Model Development & Innovation
(
P)Re-Think Your Business Model
Introduction
Training
Oct 21
st
/22
nd
, RotSlide2
Relevance & Objectives
process
team
mindset
Business Model Development & InnovationSlide3
The Business Model Development & Innovation Approach
What is it Built Upon?Our Research
6 years of research20+ scientific publications
10 finalized / on-going PhD theses
Other’s Research & Shared Experience
Thought Leaders on Business Model Innovation (e.g. O. Gassmann, H. Chesborogh, A. Osterwalder
, M. Johnson)
Thought Leaders on Lean Start-Up, Customer Development (e.g. S. Blank, E.
Ries
, B. Cooper, A.
Maurya
)
Collaboration with SAP’s Communities
Our Coaching Experience
Various internal coaching projects (e.g. SAP Store, Supplier Info Net, HANA Cloud,
CityApp
)
Some external coaching projects (e.g. Roche, T-Systems)
4 years of coaching
Trainings (‘v camp’)
Design Thinking
Business Model Innovation / Generation
Lean / Agile
process
team
mindset
Business Model Development & InnovationSlide4
The Business Model Development & Innovation Approach
When and Why to be Used?
New product (or service)Existing product (with limited success)
New business model (BM)
Improved BM
Adapted BM
Ensure / optimize economical viability ….
… for all kinds of products …
… based on the appropriate BM
process
team
mindset
Business Model Development & InnovationSlide5
BMDI Complements Existing Innovation Approaches with a Focus on Economic Viability for the Optimal Solution
Design Thinking
Business Model Development & Innovation (BMDI)
(Lean) Software EngineeringSlide6
Business Models:
Definition & Description
process
team
mindset
Business Model Development & InnovationSlide7
Business Model Definition
The business model abstracts the complexity of a company (or business unit) by reducing it to its core elements and their interrelations. Thus, it specifies the core business logic, in particular aspects relevant for its competitive advantage.
The business model describes how value is created, delivered and captured.
1
2Slide8
Business Model DescriptionNetwork View
My Company My Customers My Partners My Competition
Partner Network
Customer Network
CompetitionSlide9
Business Model Description
Enterprise View
My Company My Customers My Partners My Competition
Value Capture
Value Creation
Competition
Why?
How?
What?
Who?Slide10
Enterprise View = Osterwalder Canvas
Sources:
www.businessmodelgeneration.conm
(A.
Osterwalder / Y. Pigneur)Slide11
A Well-Known Example: McDonald’sNetwork View
My Company My Customers My Partners My Competition
Partner Network
Customer Network
Competition
Fast food
Coffee culture (
Mc
Café)
Revenue
Revenue
Services
Brand awareness
Revenue
Sandwiches
Revenue
Fast food
Revenue
Revenue
Coffee culture
Revenue
Brand /
Licence
Products/Equipment
Concept
Revenue
Spreading the brand
Consumers
Fast food
Coffee culture (
Mc
Café)
Revenue
Branded Suppliers
Service Providers
Branded Products
Quality food products
Pizza restaurant
Revenue
Local
Suppliers
FranchiseesSlide12
A Well-Known Example: McDonald’sEnterprise View
Consumers: ONE global customer experience Fast Food / Coffee Culture Experience
Franchisees: Global Brand & MarketingEquipment, Recipes, Furniture, Layout, Support provided
Standardized processes
Efficient supply chain & logistics
Brand-focused marketing
Direct revenue from consumers
Brand allows for price premium
Revenue from Franchise Restaurants (Profit Share, Fees)
High efficiency and stability
Economies of scale
Low-wages
My Company My Customers My Partners My Competition
Brand
Franchising concept
Stable quality
Low -wages
Consumers: Brand, Loyalty Programs, Family Attractions
Franchisees: (Long-term) contracts
Consumers: Shops, Advertising, Coupons
Franchisees: Direct Cannel
Branded Suppliers
Service Providers
Local
Suppliers
Consumers
FranchiseesSlide13
Extensions of the Network ViewSpecifics of Complex Business Models
My Company My Customers My Partners My Competition
Business models with
network effects
: These models only work, if it’s understood where and why network effects occur and how they have to be leveraged to build and sustain critical mass.
Multi-sided
business models: These models only work, if it’s ensured that each entity in the customer network receives sufficient value as an incentive for participation.
Alliances
: These models only work, if the joint business model as well as all the individual ones make sense from the stakeholders point of view.Slide14
Me
Competitor Group
Customer
Segment
Behind the Value Proposition is
Y
our Product
What You Want to Accomplish with Your Value
Proposition
Your Unique Value Proposition
Your Product or Service should be developed in a way that you:
Address the customer needs to the largest possible extend
Maximize your unique value proposition (by leveraging your unfair advantages)
Minimize the competitors’ unique
value
proposition (
by
circumventing their unfair advantages)
This has to be done per customer segment (and competitor group, if necessary)
Common Value Proposition
Your Competitors’ Unique Value Proposition
My Company My Customers My Partners My Competition
Your Overall Value PropositionSlide15
Analyzing All Influencing Factors
Building a Value Proposition That Fits
Problem / Task
Job(s) to be done
Gains & Pains
Overall Value Proposition
Alternative
Solutions
Key Features
Solution
Gain Creators / Pain Relievers
Unfair Advantages
Unique Value Proposition
Unique Value Proposition
Unfair Advantages
Key Features
Customer Segment:
ABC
Competitor Group:
XYZ
Problem / Solution Fit
Market / Solution Fit
My Company My Customers My Partners My CompetitionSlide16
Business Model Development & Innovation:
Approach, Process & Methods
process
team
mindset
Business Model Development & InnovationSlide17
Business Model Development & Innovation
Our Definition and Approach An iterative process resulting in a suitable business model adding economic value to the company.
Execution & Scaling
Analysis
Design
Verification
Piloting
Current Business Model or Baseline
Influencing Factors
Future
Business Model
Innovation / TransformationSlide18
Business Model Development & Innovation
An Iterative Approach – Not A Sequential Process
Analyze & Improve
Evaluate & Decide
Challenge & Change
Test & Verify
Iterations can be done in the sequence and to the extend that is required by the individual project.Slide19
Business Model Development & Innovation
It’s Not Just a Process. It’s a Mindset.When you aim for business model innovation, the right mindset is as important as the right process and methodology.Slide20
Business Model Development & Innovation
It’s Not Just a Mindset. It’s a Team Effort.First of all you need a core team, representing all key functions and competencies.
Diversity matters!In addition, make sure you can access all relevant experts internally and externally, you know your stakeholders, and you have sufficient backing by promoters.
Core Team
Sponsors
Stakeholders
ExpertsSlide21
Business Model Development & Innovation
For Success All Elements Have to Come TogetherTeamProcess
MindsetSlide22
Level of Uncertainty & Need for Assumptions
How to Use the BMDI Approach
Solution
Market
Close to Core
Far from Core
Close to Core
Far from Core
Level of uncertainty / Need
for assumptions
Number
of iterations
Role of existing business models
Degree of innovative-
ness
High
High
Inspiration
Low - High
Low
Low
Guideline
Low - High
The usage of the BMDI approach is significantly influenced by the level of uncertainty both on the solution and on the market side. Even established companies have to act rather like start-ups, if they operate under a high level of uncertainty. In this case they have to make a lot of assumptions to build a business models and will need many iterations to reduce uncertainty throughout the process. Nevertheless, the desired (or required) degree of innovativeness is independent from the level of uncertainty.
Sources: R. Stacey, 2002;
B.
Nagji
and G. Tuff 2012 Slide23
When and Where to Start?
How to Use the BMDI ApproachType of solutionTypical triggers
Business modelNew solutionEnsure economical viability, outperform competition, opportunities in the market
Needs to be developed; First ideas
and assumptions are used as a starting pointExisting solution
Limited economical success, inappropriate business model (e.g. acquired) , changes in market environmentNeeds to be improved; Current business model is used as a starting point
The BMDI approach can be utilized both for new (to be developed) solutions and for existing ones. In the first scenario, even though there is no business model in place, mostly the project team has a lot of ideas and assumptions regarding the different elements, that should be documented and used as a base line for the BMI project. In the latter case the current business model needs to documented as a starting point.Slide24
Don‘t Re-Invent the Wheel
How to Use the BMDI ApproachFindings from the literature:
90% of all new business model innovations are re-combinations of existing business models. Companies can adopt business models pioneered in one space into another.Many re-usable business models are described in literature and by commercial providers.
No matter if you act under low or high uncertainty and no matter if you go for rather incremental or rather disruptive innovations: Existing business models should always be leveraged – be it as a guideline or just as an inspiration.
Learn from others. However, understand and
adapt, do not just copy.
Sources: Gassmann et al., 2012; Johnson, 2010;
Chatterjee, 2013;
Teece
, 2010; McGrath, 2010; Breuer ,
Ketabdar
, 2012;
Zott
, Amit, Massa, 2010 (
referring
to
:
Timmers
, 1998;
Tapscott
et al. 2000 ; Applegate, 2001;
Rappa
, 2001; Weill & Vitale, 2001 )Slide25
Thank You!
Contact information:uli.eisert@sap.com
process
team
mindset
Business Model Development & Innovation