Presentation by: Jackie MorrowBased on an article by:Johnson, M.W., Christensen, C. M., Kagermann, H.

ReinventingYourBusinessModel

Click box above to play video or visit:http://www.youtube.com/watch?v=nWqj6OQQOHA

2003 + 3 years =

50% of Apple’s revenue

iTunes store & iPod

“blades-and-razors” model

1. Satisfy

2. Blueprints

3. Compare

A real customer need.

Fulfill that “need” at a profit.

To existing model.

Customer Value Proposition (CVP)

Key Resources

Key Processes

Profit Formula

1234

CVP + Profit Formula = Value for Both Parties

Key Resources + Processes = HOW that value will be delivered

Traditional Power Tool Company

Hilti’s Tool Fleet Management Service

Sales of industrial and professional power tools

CUSTOMER VALUE PROPOSITION

Leasing comprehensive fleet of tools to increase

productivity for customers

Low margins, high inventory turnover

PROFIT FORMULA Higher Margins, asset heavy; monthly payments

for tools

Distribution channel and low cost manufacturing, R7D

KEY RESOURCES & PROCESSES

Strong direct sales approach, contract

management, IT Systems for inventory management,

and warehousing

Classroom Chalkboard Interactive White Board

Delivering lessons to students in classroom setting via chalkboard

CUSTOMER VALUE PROPOSITION

Deliver lessons to students via interactive technology

Low margins, low retention PROFIT FORMULA High margins, high retention

Chalk, Boards, Teacher, Students, Lesson Plans; Process is lecture

style lessons

KEY RESOURCES & PROCESSES

Interactive white board, projector, laptop, teacher,

students, multifaceted lessons; Process is

collaborative interactive lessons

“Truly transformative businesses are never exclusively about the discovery and commercialization of a great technology. Their success comes from enveloping the new technology in an

appropriate, powerful business model” (Johnson, pg. 59).

Presentation By: Jackie MorrowCC share and share alike, non commercial use

Morrowj1@ uw(dot)edu

Article and Book SourcesJohnson, M.W., Christensen, C. M., Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review, 51-59.

Christensen, C. M., Scott, A. D., & Roth, E. A. (2004). Seeing What’s Next. Boston: Harvard Business School Press.

Multimedia and Photo SourcesMovie Clip: http://www.youtube.com/watch?v=nWqj6OQQOHA

Money: http://www.flickr.com/photos/amagill/3366720659/Razor: http://www.flickr.com/photos/qualityandstyle/4628275080/

One Way Sign: http://www.flickr.com/photos/beatboxbadhabit/2411299467/Newspapers: http://www.flickr.com/photos/36000391@N07/4446929018/sizes/l/in/photostream/

Hands: Thinkstock subscription http://www.thinkstockphotos.comConstruction Guys: http://www.flickr.com/photos/perspective/5663116246/sizes/l/in/photostream/

Student: Photo by Jackie Morrow, Kent School District