1. From a business idea to asustainable business modelThe Art of Strategic Innovation!Masterclass TiasNimbas Business SchoolOpen Innovation & EntrepreneurshipApril 18th & 19th, 2011Dr. oec. Patrick Sthler

2. Your expectation? 3. A word of warningThis masterclass might begood enough in its ownway, but it is a mightybloodless substitute forstarting a new venture inreal life.Adopted from Robert Louis Stevenson 4. Agenda Monday April 18th Tuesday, April 19th Morning Session (9-12.30)!Get-to-know your ideas (Present your idea to! How to find customer insights as a source of an the group in 5min)innovative business model!Its not the product, stupid! The importance of ! Customer development step in step with business model for innovation and startupsproduct development!What is an innovation?! Business model innovation or the art of being!What is a business model? different Lunch Break 12.30-13.30 Afternoon Session (13.30-17.30)!First pitching to the group and feedback! Business Model Design process & tools!It is the customer, stupid! The importance of the ! How to write a good business plan value proposition and the jobs you solve for! Wrap up your customers!Preparation of the pitching in the evening Evening (starting 18.15) Reception and Live Pitching 5. 1st partInnovation and Your Business Model 6. The Reality: Nobody waits for you! We have too much of everything! We have too much choice! We are bombarded by advertising and commercials! 7. Why should any- body care aboutyour idea?What is the purpose of your business? 8. 1. Make MeaningGreat ideasWhat is your meaning? for starting something!2. Make MantraSource: Great ideas for starting something (by Guy Kawasaki)Take the meaning and make a mantra out of it3. Get GoingStart creating and delivering, not pitching, writing or planning4. Dene your business modelThe whole business model counts, not just the product5. Weave a Mat (Milestones, Assumptions, and Tasks) 9. What is the biggest innovation in your rm? 10. What are innovative companiesfor you?What can we learn from them? 11. Which innovation expanded the global addressable market for mobile communication the most?**After the invention of mobile telephony itself 12. Whichinnovation madethis possible?!Dr. Patrick Sthler | 12 13. A smal l changopened e in bill new ma ing Africa, rkets in Asia, L Americata, Yout in hs, etc..!Prepaid 14. But what is aninnovation? 15. Technological Innovation 16. Process Innovation 17. Process Innovation 18. Product Innovation 19. Business ModelInnovation 20. The magicformular forCustomerutilitygreat rmscustomer + valuepricecompany + prot costs 21. Wouldyosay this u dare to? would b Whate of your the answerboss?!Well, I know we are in acommodity market where theprice is key, but I believe we cansell the good for 10x as muchas before. 22. The Transistor was invented at theimportance of end of the 1940sbusinessmodel thinking! 23. But SONY made in 1955 a successfulproduct out of the transistor anddeveloped a successful business modelout of it for the next 50 years. 24. Do you know this man?Hans Rausing = Inventor of theTetra Pack Systems Dr. Patrick Sthler | 26 25. He could have sold hispackaging machines, but 26. But he sold packaged services Tetra Pack is not a product innovation but an innovation of an innovative business model! 27. Business Modelinnovation Beats Technology Beats Product Beats Process 28. The business model creates value not technology or aproduct itself technologyX value / utilitycreates enables business modeldenes business strategy 29. To develop a business model with a purpose, isTo Do theright thingsAnd not to do things right 30. Strategy is often seen as the corporate strategy of a rm, but the businessstrategy decides upon success or failure in the markets Owner Strategy Corporate StrategyBusinessstrategyBusiness StrategyProductProduct Product strategy 1 strategy 2strategy .. That is where the business is! That is were innovation should start.! 31. Awareness Test 32. What is abusinessmodel? 33. Are youaware ofyour DNA?!The business model is theDNA of your business 34. The business model givesmeaning to your employeesand customers 35. The purpose ofa business is tocreate customers. Peter Drucker 36. 1. What value/ benet do wecreate for whom?2. How do we do it?3. How do we earn money?4. What values do we pursue? 37. Now, we need a commonlanguage for describing abusiness modelDr. Patrick Sthler | 40 38. Components of a business model Value PropositionWhat value or benet do we create for ourcustomers and partners?Value ArchitectureHow do we create the value?Revenue ModelHow and with what do we earn money?Values/ CultureWhat values do we pursue? 39. What industry are we in? Who are our competitors? Dr. Patrick Sthler | 42 40. In which industry are we in? Dr. Patrick Sthler | 43 41. That was the job the customer wanted to do.Dr. Patrick Sthler | 44 42. Value Proposition/ customerWertschpfungsarchitektur customersValue Proposition/ KundenAngebot DistributionskanleKunden Wie sieht mein Angebot WhoWie erreicht das Angebot are our Wer ist mein Kunde? aus?meine Kunden? Welchen Job customers?bernehme ich fr What job do we solve meinen Kunden? Wertschpfungskette for our customers? Was sind die wichtigsten Schritte der Aktivitt 1 Aktivitt 2Aktivitt 3 Aktivitt 4Kunden Aktivitt 1 Nutzen Wertschpfung? Welchen Nutzen stifteich fr meinen Kunden?value proposition Welchen Nutzen stifteKernfhigkeiten Partner ich fr meine Partner? Welche Kernfhigkeiten What value do we create Welche Partner brauche ich?bentige ich? for our customers? What value do we create for our partners? Ertragsmodell Kostenstruktur Ertragsquellen Die Kostenstruktur wird durch Womit verdiene ichdie Wertschpfungs-architekturGeld?festgelegt.Kultur/ Werte FhrungsstilBeziehungskulturWerthaltung Welchen Fhrungsstil Wie gehen wir Welche Werte prgen uns? pege ich?miteinander um? 43. To refresh the world 44. To put a computer on everydesk and in every home 45. To organize the worldsinformation and make ituniversally accessible 46. Wertschpfungsarchitektur Value architecture Value Proposition/ Kunden Angebot Distributionskanle Kunden Wie sieht mein Angebotoffer Wie erreicht das Angebot distribution architectureist mein Kunde? Wer aus?meine Kunden? Welchen Job What is our offering? How do we reach ourbernehme ich frmeinen Kunden?customers? Wertschpfungskette How do we communicate Was sind die wichtigstenwith our customers? Schritte derAktivitt 1Aktivitt 2 Aktivitt 3 Aktivitt 4 KundenAktivitt 1Nutzen Wertschpfung?value chain Welchen Nutzen stifteich fr meinen Kunden? What Kernfhigkeitenareour value Partner Welchen Nutzen stifteich fr meine Partner? Welche Kernfhigkeiten steps? creating Welche Partner activity 1 activity 2activity 3activity 4 customeractivity What is our value brauche ich?bentige ich? chain?core capabilities partnerErtragsmodell Kostenstruktur Ertragsquellen What arethe Kostenstruktur wird durch Die core Which partners do ich Womit verdiene die Wertschpfungs-architekturcapabilities we need? festgelegt. we need?Geld?Kultur/ WerteFhrungsstilBeziehungskultur Werthaltung Welchen Fhrungsstil Wie gehen wir Welche Werte prgen uns?pege ich?miteinander um? 47. Revenue model < cost structuresources of revenue Cost structure is With what do wedened by the value earn money?architecture 48. Culture/ values leadership stylerelationship stylevalues What leadership How do we What values do style do we have? interact with eachwe pursue?other and thecustomer? 49. What business are we in? Our business modelValue architecture Value Proposition/ customeroffer distribution architecturecustomers What is our offering? How do we reach our Who are our customers?customers? How do we communicate What job do we solve with our customers? for our customers?value chain What are our value creating steps? value propositioncustomer activity 1 activity 2activity 3activity 4 What is our value chain? activity What value do wecreate for ourcustomers? core capabilitiespartner What value do we What are the core Which partners do we create for our partners? capabilities we need?need?Revenue modelcost structuresources of revenue Cost structure is dened by the With what do we earn value architecturemoney?Culture/ valuesleadership style relationship stylevalues What leadership style do How do we interact with What values do wewe have? each other and the pursue?customer? 50. What business are we in? Our business modelValue architecture Value Proposition/ customeroffer distribution architecturecustomers What is our offering? How do we reach our Who are our customers?customers? What job do we solvefor our customers?value chain What are our value creating steps? value propositioncustomer activity 1 activity 2activity 3activity 4 What is our value chain? activity What value do wecreate for ourcustomers? core capabilitiespartner What value do we What are the core Which partners do we create for our partners? capabilities we need?need?Revenue modelcost structuresources of revenue Cost structure is dened by the value architecture < With what do we earnmoney?Culture/ valuesleadership style relationship stylevalues What leadership style do How do we interact with What values do wewe have? each other and the pursue?customer? 51. 2nd partDevelop Your Business Model 52. Use the can vasto develop y ourbusiness model! 53. Checklist for writing your business model Be specic Keep it simple Self-explanatory Focus on the relevant points Do not reinvent the world 54. Checklist for positioning your business model differentiated customer-centric specic better narrow than broad relevant based-on core capabilities 55. Innovation is all about beingdifferent 56. But if everybody is doing hesame, you have to ndsomething else 57. Optimal is when differentbusiness models exists and allhave devoted customers 58. Checklist for writing your business model Complete this sentence: If your organization never existed, the world would be worse off because ____________________________ ___________________________________________ 59. Please start ! 60. 3rd partThe Art of Pitching 61. The most salientphrase foranentrepreneur!I pitch,therefore I am 62. Know your audience for the pitchPitch toSales pitch toInvestors pitchpartnerscustomers 63. What do you do?What is a good pitch forProblem you solveinvestors? Your solution & benet for the customer Your business model (the essentials)Your competitorsUnderlying magic (uniqueness)Management TeamKey Financials Current Status, timeline 64. What do you do?What is a good pitch forinvestors? (short version)Problem you solveYour solution & benet for customerYour business model (the essentials) Underlying magic (uniqueness)Key nancialsCurrent Status, timeline 65. From a business idea to asustainable business modelThe Art of Strategic Innovation!Masterclass TiasNimbas Business SchoolOpen Innovation & EntrepreneurshipApril 18th & 19th, 2011Dr. oec. Patrick Sthler 66. Everybody wants to be innovativ: But what is an innovation? 67. 80 devices in Germany 68. 1 device 69. Innovation is all about beingdifferent 70. But if everybody is doing hesame, you have to ndsomething else 71. Optimal is when differentbusiness models exists and allhave devoted customers 72. The Case 73. At the beginning of the 1990s the world in the power tool industry was inperfect order Established brands in a growing, European market Competition was well dened and Bosch was the uncontested market leader 74. Die AusgangsituationAnd then the Chinese came along.. Over 200 new competitors in a short period of time 75. and the market stagnated at the same time. 76. Dire consequences: A steep decline in the average price per sold tool and.5,9 Sales(Mio. units) 3,8 307 Sales (Mio. Euro) 329 88 price in Euro78 69 65 64 6762 58 56 5293 9495969798 99 00 0102Source: GfKDo-it-yourself chains in Germany: 1993 until 2002 77. and declining market share for the established brands and exponentialgrowth for the no-names and trade brands Market Share Powertools (Germany)100%6272933 No Names & Trade Brands Established Brands 95 7371 67 0%19912000 2001 2002 Source: GfK, Do-it-yourself shops Strong increase of market share for no-names and trade brands Bosch Power Tools DIY 2002 with a market share of 33% but loss making 78. Simple task from your board: Defend market leadership Improve protability 79. Which directions should wetake?Dr. Patrick Sthler. Leuphana University Lneburg82 80. How about this crazy idea? How about making a power tool which is much weaker than the last generation but we make it also very handy and nicely designed. For that we charge a premium and market it to people who are not really into DIY. Great idea, isnt it? 81. The solution: Tools for theIKEA Generation 82. Here is the solution for Bosch: the IXO, the rst power tool for the IKEAgeneration Bosch introduces the IXO to the market Instead of following the traditional mantra of better, stronger, faster Bosch used a new battery technology to make tools smaller and more user friendly Instead of going for the traditional market of MMS (men, muscles and sweat) the IXO addresses the soft DIYs that assembles its IKEA furniture but not more Thereby, it addresses a new, previously unserved market of non-customers The IXO is a typical value innovation that opened up new, uncontested markets 83. Shift from technology to user orientation prior 2002 since 2002 Technologie User and usage orientationorientationBuilding and Building/repair, planning repairing and home decorationreliable, very powerful and reliable, easy to use long-living productsproducts and servicesunemotional inspiring people technology orientation 84. The traditional market:MMS or Men, Muscles and Sweat 85. New market:Addressing previously non-customers like soft DIYlers andparticularly woman Dr. Patrick Sthler | 88 86. Changed consumer behaviorThe rst power tool for the kitchendrawer 87. Bosch IXO is the world record holder in units sales10 Mio.times sold200420052006 2007200820092010 IXO was rst power tool with Li-Ionen technology IXO is the best selling power tool in the world 88. Growing market share and highly protable Market share in power tools (DIY Shops Germany) 27 293335343838 No Name / Trade Brands40 3829 34312625 Other Brands Bosch33 3333343736370001 02 03 04 05 06 Source: GfK 89. OK, lets do some analytics andtheory 92 90. Bosch used the new battery technology for a disruptive value innovationSustaining innovation = Serving todayscustomers Extend performance in direction of whatAdvantages of Li-Ion todays customers like can be formed into a variety of shapes and sizes so as to efciently ll available space in the Use the Li-Ion technology for stronger and devicesmore heavy duty tools lighter than otheroften much lighter. do not suffer from the memory effect low self-discharge rate of approximately 5% perDisruptive innovation = Finding new customers month, compared with over 30% per month in with different needs nickel metal hydride batteries (Source Wikipedia) Use for a new market segments that values different performance parameters like usability, handiness than traditional customers Performance of tool will be worse in parameters current customers value 91. The strategy canvas of Bosch IXO: A clear prole of the value innovation 6Traditional brands No-Name Bosch 5 4 3 2 1 0-1 92. If you are in a market forgiants... 93. .. and you play with their rulesyou will get nowhere 94. but if you can create your own rules of engagement than you can compete even in a market for giants. Dr. Patrick Sthler |97 95. Sounds t rival,but it isn t!Business model innovation1. Value Innovation (We offer a better value proposition for an existing ornew problem)2. Architectural innovation (We recongure the value chain so that a better valueproposition emerges)3. Revenue model innovation (We change the revenue mix and thereby creating abetter value proposition) 96. Fight eye diseases in Indiawith mass productionprocesses for low coststhe basic idea behind Aravind Eye Hospitals The network of not-for-prot hospitals and visioncenters performs 300,000 eye surgeries each year --70% for free -- using broadband connections to on-calldoctors in city hospitals for instant diagnosis. Camps in rural areas screen thousands of patientsweekly. "We are going from village to village to provideeye care to the unreached," says Aravinds chairman, Dr.P. Namperumalsamy. Aravind won the 2008 Gates Award for Global Health.Dr. Patrick Sthler | 99 97. paramedics scanning middle class Indians eye surgery rual villages poor Indians highly standardized surgeries high division of labor good quality eye surgery affordable eye surgery even for thepoor process know- Doing good for middle class indians how cross- subsidies between middle class low cost production system patients and the poorDr. Patrick Sthler | 100 98. Dr. Patrick Sthler | 101 99. A deliberate change of a business model is a good strategyStarting points of businessmodel innovation All components of a business model are starting points for innovation Value Innovation Architectural Innovation Revenue Model Innovation At the end, all business model innovation must create more value to the customers 100. Case IKEAValue Architecture Customers have to transport andassemble the furniture by themselves,thereby saving IKEA to expensive steps intheir value creating processValue Proposition At the same time a new value propositionis created: Instant satisfaction withoutwaiting for the later delivery of thefurnitureRevenue Model Due to the high volume, furniture can beproduced in an industrial fashion thatleads to even lower production costs Therefore, the furniture can be sold for amuch lower price 101. The Andermatt Challenge retreat of Swiss Army from Andermatt Andermatt was strongly depending on the Swiss Army but Army withdrew Tourism infrastructure is dated and no-investor could be found Reputation of area Urserental in Switzerland mixed due to Army time (cold, windy and very wet)Dr. Patrick Sthler | 104 102. +Dr. Patrick Sthler | 105 103. +Dr. Patrick Sthler | 106 104. The Challenge Traditional Swiss style touristic development didnot work since just small investments eg. one hotelwas not sufcient to bring the whole valley backto modernity Valley was seen as not-developable Dr. Patrick Sthler | 107 105. The Alps Pharaoh Sawiris with his company Orascom had the ideato build a whole resort into the Urserental notjust one hotelDr. Patrick Sthler | 108 106. Dr. Patrick Sthler | 109 107. Dr. Patrick Sthler | 110 108. Dr. Patrick Sthler | 111 109. The Orascom Innovation: Resort vs. single developmentTraditional Swiss Andermatt resort single development of plan for a whole one hotel or appartment resort ranging from golf, complexhotels to apartments No international Internationals sales of distribution networksapartments & Villas International managementshort term prot from mid-term prot since someconstruction companies real estates stay with(traditional developers) Orascom problem of cold beds ???Dr. Patrick Sthler | 113 110. Geberit a product innovator?From plumber supply to under-the-wall systems for bathsDr. Patrick Sthler | 114 111. Geberit has developed an innovative business modelFrom plumbers supplier to baths renovator Plumbers are as well Homeowners,customers as the Plumbersdistribution channel Plumbers are alsoreached via trainings Faster and more convenient renovation of baths Partner management Plumbers Plumbers have all Training of components from one plumbers source. High margin Higher costs due to more Higher revenues since plumbers expenses e.g. trainings know only GeberitDr. Patrick Sthler | 115 112. Todays job posting market. More sites than ever but that makes it muchmore difcult for the candidate to nd the right jobToomuch!!yToo mant !irrelevan ! postingsDr. Patrick Sthler | 116 113. Experteer.com: To develop your carrier is already difcult enoungh, wend the right jobs for your next carrier step. = Experteerodelrevenue m !innovationCustomer Insight The offering on the web is toobroad and too much noise How do I nd the right job? Value Proposition for customer Experteer classies the jobs on thedifferent websites according tocarrier level and salary Based on the her prole the usergets just the relevant job offerings. Revenue model dia Without new me Instead of the employer the user ess Experteers businpays for getting just the relevantjob postings model would be impossible! 114. Business Models with aActuall Sustainabilityy, notpurpose: Prot & Impact & Impact a new id ea.!& Sustainability + old school Business Models non-protwith a purpose do-goodersnon-prot for prot old school companiesDr. Patrick Sthler | 118 Source: Inspired by Alexander Osterwalders presentation: Business models beyond prots 115. Self-help, self-responsibility and self-administration the basic idea of Friedrich Wilhelm Raiffeisen & Hermann Schulze-Delitzsch: Founder of the cooperative movement in Germany in the mid 1850s Cooperative banks for low-priced loans and advantageous investment opportunities for farmers to enable farmers to purchase agricultural equipment, fertilizers and livestock. The members then provided each other with mutual assistance. Dr. Patrick Sthler | 119 116. The modernMicro credits versionin BangladeHelp for Self-help: sh!the basic idea of Muhammad Yunus Yunus set up the Grameen Bank in 1976 to givecredit to the very poorest in his country,particularly women, in order to let them set uptiny businesses without collateral. The membersthen provided each other with mutual assistance. 117. Business Model InnovationHow to nd fresh customer insights 118. !squareBack to derstand unone to on! what is goingWhat is a newspaper?* *from a business point 119. I buy a newspaper for news,comments and backgroundstories! 1.business !content for readers! 120. s!2. busines With the WSJ I can reach 30% ofderssa les of reaoattention t the decision makers! ! marketeers 121. I buy the paper since Iam looking for a job.3. busines s !Matchingdemand and supp ly e.g. for jobs!Dr. Patrick Sthler |125 122. Where do we get a ValueInnovation from? Lets ndnew customer insights as a Customersstarting pointinsight New value proposition Business model innovation 123. How can we nd customer insights? 124. How about asking your customers? 125. How can we nd systematically new customer insights? Buyer Utility Map Delivery/Comple- BuyUsageService Disposal AssemblymentsUnderstand how the customers are buying, How can we improve the buyers utility cycle? using and disposing the product Can we do more for the customer?Understand the whole lifecycle of customers Can we leave something to the customer? utilitySource: cp. Kim, W.C., Mauborgne, R., Knowing a Winning Business Idea whenyou see one, HBR Sep-Oct. 2000 126. Where can I start in the buyer utility map? valueThe Dyson Vacuum CleanerDyson =! innovationStartingBuy Delivery Use ComplementsServiceDisposalPointsCustomerProductivitySimplicityUsability ++RiskImage & funEnviromental friendlyness 127. Dyson vacuum cleaner inspired by technologyThe vacuum cleaner for menDyson = ! Value n! Innovatio Customer Insights Bags and lters get clogged and restrict airow. Loss of suction Vacuum cleaners are marketed as household aids. Are there different segments? Value Proposition for customers Dyson vacuum cleaners have NO bags and do NOT get clogged due Cyclone technology. Therefore, NO loss of suction. Dyson positions itself as technical, highly engineered products that address men. Revenue Model Dyson demands premium prices for its vacuum cleaners. 128. Blacksocks we save the world from socks problemsPuttingStarting BuyDelivery Use Washing Disposalin pairsPointsCustomerProductivitySimplicityUsabilityRiskImage & funEnviromental friendlyness 129. Blacksocks We solve the world from its socks problems ks =Blacksocodelrevenue m !Socks subscription innovation(2001-2008) Customer Insights40000 Buying socks is no fun40000 Putting socks in pairs even less fun20% market share! Good socks are a sign of Being well dressedin Switzerland*! 30000 Value Proposition Blacksocks subscription solves all 25000 problems Always enough new socks No pairing needed since all socks are20000 identical 12000Revenue Model 10000 Upfront payment 10000 Easy planning and negative working capital0 20012002 2005 2008 * premium segment starting at 9CHF! 130. What is your rst thought as an insurer? 131. What are the rstt thoughts of the owner?rshe fi What is t your f thought o?! customer 132. How can we nd systematically new customer insights e.g. in an insurancecompany?Customers Insurance Utility Map Understand Do I need an Understand how the customers are buying andBuy Insuranceusing your insurance. Look at the emergencyinsurance?case Understand the whole lifecycle of customersutility not just the parts you are responsible for Nothing Pay insurance happens ChangeEmergencyGetting back to How can we improve the buyers utility cycle? happensnormal Can we do more for the customer? Can we do more to prevent damage? Can we leave something to the customer?Claimsettlement 133. With HelpPoints Zurich Insurance improved customer satisfaction ANDachieved lower cost for claim settlement Dr. Patrick Sthler |137 134. How do I dothis? 135. What toolsdo we have? 136. Creating Business model innovations is a creative andanalytical process at the same time. There is a reasonwhy god gave us two brain hemispheres 137. Buyer Utilitiy Map for Customer InsightsPuttingStartingBuy Delivery Use Washing Disposalin pairsPointsCustomerProductivitySimplicityUsabilityRiskImage & funEnviromental friendlyness 138. Develop you rbusiness model,play with al lcomponents ! 139. Map your positioning and show your difference 6Traditional brands No-Name Bosch 5 4 3 2 1 0-1 140. Is there aprocess? 141. If you want to nd a disruptive businessmodel innovation you just have tofollow the prescription to the right.Your success is guaranteed! 142. Sorry, life is not a fairy tale.You can nd sustaining innovation witha structured process, but not disruptivebusiness model innovation. Business model innovation are all abouttry and error under high uncertainty 143. The uidminds way of business model innovation UnderstandUnlearn & mobilize Ideate Find customer insights Unveil tacit assumptions Generatevia jobs-to-be-done about the industry value ideas Describe current Create discomfort with architectural ideasbusiness modelcurrent situation revenue ideas Understand markettrendsDesignSelect & Prototype Build & Learn Design new businessSelect business modelsExecute business modelmodelsPrototype & customerGather customer feedback Check interdependen-ciesDevelopment & datain business model Write Business Case Adapt business modelSelect new business model 144. The magicformular forCustomerutilitygreat rmscustomer + valuepricecompany + prot costs 145. And nowsuccess? 146. Beware of your existing customers. They want More-of-the-Same-for- Less!Dr. Patrick Sthler. Leuphana University Lneburg 147. But also it takes time to nd newcustomers and teach them theadvantages of your solution Dr. Patrick Sthler | 151 148. Even innovations that are self-evident & have no competition do not diffuse easily. The example of lemon juice and the British Navy Discovery that lemon juice prevents scurvy in 1601146 years Conrmation of the results 1747 48 yearsIntroduction to the Navy 1795 70 yearsIntroduction to the Merchant navy 1865Source: Mosteller, 1981 cited in Rogers, 1995 149. Business model innovation demands often new consumer behavior. Learning takesTIME and a GOOD REASON to do so! Have you ever thought of, howmuch knowledge consumer haveabout the consumption process? Most consumer knowledge islearned via from other peers To implement a new businessmodel in the heads of theconsumer takes time! Explain how to get the right gas to an alien. Easy, isnt it! ;-)! 150. What is a good strategy? trenddifferenti focusationbuild on strengths 151. Its about nding the righttrend to surf! 152. It is about differentiation 153. Business model innovation is about beingDIFFERENT! 154. NO, REALLY DIFFERENT! 155. Dr. Patrick Sthler | 159 156. DOINGnot learning to do,is the essence of entrepreneurship Guy Kawasaki, The Art of the Start 2004, p. xi 157. Scary to be this nail. Wherewill the hammer hit nexttime? 158. Weitere Informationen!http://blog.business-model-innovation.com!Dr. oec. Patrick Sthleruidminds GmbHSeefeldstrasse 5aCH-8008 ZrichPatrick.Staehler@uidminds.chwww.uidminds.chblog.business-model-innovation.com 159. 4th partWhy do we not do it?Dr. Patrick Sthler | 164 160. Innovation Killers How Tools Destroy Your Capacity to Do New ThingsDr. Patrick Sthler |165 161. 12 40% gross23% gross prot protI n whichprojectshould we invest?!* You are in the same industry under the same rules of competitionDr. Patrick Sthler |166 162. 1Dr. Patrick Sthler |167 163. 2 164. Think more about ROI not just sales margin, but be aware of what the totalassets areProfitROI =TotalAssetsROI = ProfitMargin AssetTurnoverNetIncomeSalesROI = Sales TotalAssetsDr. Patrick Sthler |169 165. Besideshaving aBoth cases have approx. the same protabilityhigher n margin, discou the nte growing r market is !! 1 = Department stores2 = discountersNetIncomeSalesROI = Sales TotalAssets ROCII1 = 40% 3 = 120%ROCII2 = 23% 5.5 = 126.5% Figures are taken from Christensen, Raynor (2003), The innovators solution, p. 106 166. Ok, lets assume we are this turkeyhere. Lets call him Joey Dr. Patrick Sthler |17 171 1 167. Joey is a good student. He learnedthat analytics will help him tobecome a better turkey. Dr. Patrick Sthler | 172 168. So he introduces his well-being index that increases by the day since hisowner treats him so well..Joeys condence level that he lives in paradise876543210Dr. Patrick Sthler |173 169. y!!P oor Joe hear erDid he ev ksgiving?! han a bout T Dr. Patrick Sthler | 174 170. Ok, I understand,you think he isjust a turkey.!But think whatyou usually do inmarket analysis!!Dr. Patrick Sthler |175 171. Dr. Patrick Sthler | 176 172. Disruption can come from the low end of the market or from non-consumption sustaining technology bringing a better product into an established market most demanding customers different measure of performanceperformance least demanding customerslow end disruption addressing overserved customers with a low cost business model timenew market disruptioncompete against nonconsumptiontimebased on: the Innovators dilemma by Clayton M. Christensen and the innovators solution by Clayton M. Christensen and Michael E.Raynor, slide taken from provenmodels.com 173. We have a view of the world of what made us andour rm successfulMost assumptions are tacit andunspokenThese assumptions help us innormal circumstances very well! 174. Our mental model of our world. In a rm a dominant logic of how thingsought to be done existsMarketreports Customer FeedbackCompetitor AnalysisDomiant logic of the rm resides in the people gets stronger with success filters information helps to get things done with out too much coordination gets strengthens by knowledge management, best The world according practice and benchmarking is extremely important in a world of sustaining to our firm innovations, but an impediment to disruptive innovationsDr. Patrick Sthler |179 175. Hidden aws in strategy makingWe believe that with analytical tools of thepast we can foresee the future! For asustaining world we have the right tools! 176. Hidden aws in strategy making Typical aws Our successful human rationality Overconndence in our our capabilities and in Our decision process is well suited forour ability to judge the futurenormal environments The status quo bias: What we know can we Bounded rationality: impossible to analyseanalyze better and we love the present all facts Ancoring: Ecological rationality Mental shortcuts toreach a quick decision that are good The double-sided sunk-cost problem enough in normal situations The herding instinct: What the others do cant be Preference to be exactly wrong towrong! One reason for Me-too Strategies. vaguely right False consensus: conrmation bias, selectiverecall, group thinking 177. The peepoo bag. Short brainstorming what business models are possible? peepoo bag is a single-use, self-sanatising toilet bagsDr. Patrick Sthler | 182Source: Idea taken from Alexander Osterwalder 178. Dr. Patrick Sthler | 183