v.camp: business model development & innovation ( p)re-think your business model introduction...
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v.camp: Business Model Development & Innovation (P)Re-Think Your Business ModelIntroductionTrainingOct 21st/22nd , Rot
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The Business Model Development & Innovation ApproachWhat is it Built Upon?
Our Research
6 years of research 20+ 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
processteam
mindset
Business Model Development & Innovation
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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
processteam
mindset
Business Model Development & Innovation
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BMDI Complements Existing Innovation Approaches with a Focus on Economic Viability for the Optimal Solution
Design Thinking
Business Model Development & Innovation (BMDI)
(Lean) Software Engineering
Business Models:Definition & Description
processteam
mindset
Business Model Development & Innovation
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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
2
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Business Model DescriptionNetwork View
My Company My Customers My Partners My Competition
Partner Network Customer Network Competition
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Business Model Description Enterprise View
My Company My Customers My Partners My Competition
Value Capture
Value CreationCompetition
Why?
How? What? Who?
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Enterprise View = Osterwalder Canvas
Sources: www.businessmodelgeneration.conm (A. Osterwalder / Y. Pigneur)
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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
Franchisees
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A Well-Known Example: McDonald’sEnterprise View
Consumers: ONE global customer experience
Fast Food / Coffee Culture
Experience
Franchisees: Global Brand & Marketing
Equipment, 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
Franchisees
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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.
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Me
Competitor Group
CustomerSegment
Behind the Value Proposition is Your ProductWhat 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
Proposition
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Analyzing All Influencing FactorsBuilding 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 Competition
Business Model Development & Innovation:
Approach, Process & Methods
processteam
mindset
Business Model Development & Innovation
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Business Model Development & Innovation Our Definition and Approach
An iterative process resulting in a suitable business model adding economic value to the company.
Execution & ScalingAnalysis
Design
Verification
Piloting
Current Business Model or Baseline Influencing Factors
FutureBusiness Model
Innovation / Transformation
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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.
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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.
Mindset
Visionary
Customer-centric
OpenAdventurous
Analytical
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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
Experts
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Business Model Development & Innovation For Success All Elements Have to Come Together
TeamProcess
Mindset
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Level of Uncertainty & Need for AssumptionsHow to Use the BMDI Approach
Solution
Ma
rke
t
Close to Core Far from Core
Clo
se
to
Co
reF
ar
fro
m C
ore
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
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When and Where to Start?How to Use the BMDI Approach
Type of solution Typical triggers Business model
New solution Ensure economical viability, outperform competition, opportunities in the market
Needs to be developed; First ideas and assumptions are used as a starting point
Existing solution Limited economical success, inappropriate business model (e.g. acquired) , changes in market environment
Needs 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.
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Don‘t Re-Invent the Wheel How to Use the BMDI Approach
Findings 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 )
Thank You!
Contact information:
team
mindset
Business Model Development & Innovation