Part 2Written by : Alexander Osterwalder & Yves Pigneur

Presented by : Manpreet Singh

Patterns

Idea

Architectural design ideas

Archetypal

Reusabledescription

Meaning - Similarities in business models• Characteristics• Arrangement of Business model blocks• Behavior

Objective – • Understand business model dynamics• Serve as a source of inspiration

Literatureconcepts

Language of Business model

canvas

Comparable Easy to understand Applicable

Concepts driving Patterns

Long Tail

Multi sided Platforms

Open Business Models

Different Imperatives• Economic• Competitive • Cultural

Private bankingThree businesses in one..

Face Trade offs

Eg. Zurich Based Pvt. Bank Maerki baumann

Unbundling TelcoTraditionally competed on network quality

Now network sharing deals withCompetitors or Equipment ManufacturersContent Providers

Realize key asset

Unbundled Patterns

Acquired from 3rd Parties

Customer base & trust

acq. overtime

Customer Acquisition &

retention

Long TailBusiness Model

Selling less of more•Focus on relatively Infrequent products•Require Low inventory & Strong platforms

# of products

# of

sal

es

focus

Transformation of book publishing industry• Old Model

• New model by lulu.com

LEGO’s New Long tail• Starwars, batman, Indiana jones• Lego factory using Lego digital designer

Multi-sided platforms

bring together two or more distinct but interdependent groups of Customers

•They are of value to one group only if the other groups are also present• Creates value by facilitating interactions• They grows in value by network effect

Google's Business Model• Extremely targeted text advertising globally• Adwords• Google search, Gmail, Picassa• Adsense

As a multi-sided platform Google has a very distinct revenue model. It makes money from one Customer Segment, advertisers, while subsidizing free offers to two other segments: Web surfers and content owners

Wii versus PSP/XboxSame Pattern, Different Focus• More players- more Developers• more Games – more hardware sale

Wii focus• Fun gamers• inexpensive machines• Remote & physical gestures

Apple’s evolution into a Platform Operator

Standalone iPod + iTunes iPhone + Appstore

Multi sided Platform Pattern

•At least one substantial Customer Segment is able to continuously benefit from a free-of-charge offer.• One segment Finance both

Subdivided into three different patterns• Advertising Based…………… Metro• Freemium………………………..Flickr, Linked in, Slideshare, Skype Key metrics to watch 1. Avg cost of serving a free user 2. Rate at which free user convert to Premium Upsidedown Freemium……REGA• Bait & Hook(loss leader)……………………..Gilette

Open Business Models• Creates value by systematic collaborations• May use “Outside IN” or “Inside OUT”

P&G: Connect & Develop• C.E.O A.G.Lafley

•Increase ‘Innovation from outside’ from 15% to 50%• R&D productivity had soared 85%

GlaxoSmithKline’s Patent Pools

The Connector : InnocentiveLink between “seekers” & “solvers”, Provided cash prizes ranging $5K to $1mn

3 Bridges of P&G•Technology Entreprenuers•Internet Platforms•Retirees

OBM Pattern

Thank You