why are we here? why are we here? to generate new ideas for a better tomorrow (tnb) grouping

Why are we here?Why are we here?

To generateTo generateNew Ideas for New Ideas for a better tomorrow a better tomorrow

(TNB)(TNB)

groupinggrouping

Tools to help usTools to help usto generate new ideato generate new idea

Basic of …Basic of …

byby

Facilitate byFacilitate bywww.miorazli.comwww.miorazli.com

Business Model Generation CanvasBusiness Model Generation Canvas

IntroductionIntroduction

What isWhat is ??

??

We defined We defined ‘Business Model’‘Business Model’

as the logic by as the logic by which an enterprise which an enterprise

sustains itself sustains itself financially. financially.

Put simply, it’s the logic by which an Put simply, it’s the logic by which an enterprise earns its livelihood.enterprise earns its livelihood.

AlexAlex

YvesYves

+ 470 Practitioners+ 470 Practitioners

Business Model?Business Model?

Video-InnovateBizModVideo-InnovateBizModDifferentiation! BM Important? Able design BM?Differentiation! BM Important? Able design BM?

Customer Customer SegmentsSegments

Value Value PropositioPropositionsns

ChannelsChannels

Customer Customer RelationshRelationshipsips

Revenue Revenue StreamsStreams

Key Key ResourcesResources

Key Key ActivitiesActivities

Key PartnersKey Partners

Cost Cost StructureStructure

Elements ofElements ofBusiness Model?Business Model?

Video- Elements XplainVideo- Elements Xplain

CustomCustomer er SegmenSegmentsts

ValueValuePropositiPropositionsons

ChannChannelsels

Customer Customer RelationshipsRelationships

RevenRevenueueStreaStreamsms

KeyKeyResourResourcesces

KeyKeyActivitiActivitieses

KeyKeyPartnePartnersrs

CostCostStructStructureure

Design For:Design For: Design By:Design By: Date:Date: Ver:Ver:

LOGICALLOGICAL CREATIVITYCREATIVITY

An Organization An Organization serves serves

Customers …Customers …

… … by solving by solving Customer Customer

problems or problems or satisfying satisfying

Customer needs.Customer needs.

OrganizationsOrganizationsCommunicate Communicate

and deliver Value and deliver Value in different ways in different ways

……

… … and establish and establish and maintain and maintain

different kinds of different kinds of relationships relationships

with Customers.with Customers.

Money comes in when Customers pay forMoney comes in when Customers pay forValue Provided.Value Provided.

These are the assets These are the assets needed to create needed to create and/or deliver the and/or deliver the

previous described previous described elements.elements.

These are the actual These are the actual tasks & actions tasks & actions

required to create required to create and deliver the and deliver the

previously described previously described elements.elements.

Some activities Some activities are outsourced, are outsourced,

and some and some resources are resources are

acquired outside acquired outside the organization.the organization.

These are expenses incurred acquiringThese are expenses incurred acquiringKey Resources, performing Key Activities,Key Resources, performing Key Activities,

and working with Key Partners.and working with Key Partners.

LatihanLatihan

At a glance …At a glance …

OperationalOperationalExcellenceExcellence-Wal-Mart--Wal-Mart-

ProductProductLeadershipLeadership

-Nike--Nike-CustomerCustomerIntimacyIntimacy

-Nordstrom--Nordstrom-

AwarenessEvaluating

BuyingDelivering

Following-up

1.1. Executive SummaryExecutive Summary

2. The Team2. The Team• Management ProfileManagement Profile• Why we are the winning teamWhy we are the winning team

3. The Business Model3. The Business Model• Vision, Mission & ValuesVision, Mission & Values• How our Business Model works?How our Business Model works?• Value PropositionValue Proposition• Target MarketsTarget Markets• Marketing PlanMarketing Plan• Key Resources & ActivitiesKey Resources & Activities

4. Financial Analysis4. Financial Analysis• Breakeven AnalysisBreakeven Analysis• Sales scenarios and projectionsSales scenarios and projections• Capital SpendingCapital Spending• Operating CostsOperating Costs• Funding RequirementsFunding Requirements

5. External Environment5. External Environment• The EconomyThe Economy• Market Analysis and Key TrendsMarket Analysis and Key Trends• Competitor AnalysisCompetitor Analysis• Competitive Advantage of Our Business ModelCompetitive Advantage of Our Business Model

6. Implementation Roadmap6. Implementation Roadmap• ProjectsProjects• MilestonesMilestones• RoadmapRoadmap

7.Risk Analysis7.Risk Analysis• Limiting Analysis and ObstaclesLimiting Analysis and Obstacles• Critical Success FactorsCritical Success Factors• Specific Risks and Countermeasures.Specific Risks and Countermeasures.

8. Conclusion8. Conclusion

9. Annexes 9. Annexes

Business Model vs Business Plan?Business Model vs Business Plan?Business Model

Business Modelis a part of ais a part of aBusiness Plan

Business Plan

A Business Plan includes the following …A Business Plan includes the following …

Convince Convince your your

Investor!Investor!

Cupcakes BusinessCupcakes Business


Customer vs Customer vs Value PropositionValue Proposition

How do you identify How do you identify your your Value Value

Proposition?Proposition?


ProjectsProjects

Design For:Design For: Design By:Design By: Date:Date: Version:Version:

1) Customer 1) Customer SegmentsSegments

2) Value 2) Value PropositionsPropositions

3) Channels3) Channels

4) Customer 4) Customer RelationshipsRelationships

5) Revenue 5) Revenue StreamsStreams

6) Key 6) Key ResourcesResources

8) Key Partners8) Key Partners

9) Cost Structure9) Cost Structure

7) Key 7) Key ActivitiesActivities(80/20 Rule)(80/20 Rule)

Current ActivitiesCurrent ActivitiesNew ActivitiesNew Activities

Tips:Tips:1 – Create your current Business Model Canvas.1 – Create your current Business Model Canvas.2 – Identify your Competitor & create their Canvas.2 – Identify your Competitor & create their Canvas.3 – Identify differences between you and your Competitor.3 – Identify differences between you and your Competitor.4 – Develop your new Business Model Canvas.4 – Develop your new Business Model Canvas.

To PonderTo Ponder‘‘WORK’WORK’

I've been thinking for a long time about what we do in our life...

We start by being taught in schoolhow to become good citizens.

We spend a great part of ourchildhood studying,

and finally we get the diploma that willensure us “the position we deserve”.

We participate to the increase of unemployment

...until we find a job.

Through hard tests we areaccepted in the world of work.

We perform a good professional careerfilled with activity and efforts

…a lot, a lot of efforts...

till we fall down exhausted...

BUT we are great professionalswith our valuable market share.

Time keeps on passing, and...

...we select new targets.

We meetthe sweetheartof our life...

...and promisea never endinglove.

Passionate hugs,

and here comesa baby into ourhome.

Damned night,couldn’t close my eyes!

We keep on advancingin the society

trying to make the best of our time.

We are the starswherever we go

and we are finallyRICH!

But we needsome time more

to triumph completely.

Gosh! One day they tellthey can do without you.

By this time,you think yougetting crazy,

you feel destroyed,

you feel youlost means ofcommunication.

You realise you are cut off from everything.

Now timedoes not passany longer,still you are loosing it.

You realiseyou’ve been livingin the fog

in search ofa silly target.

You become a walkingghost

trying to escapeyour enemies.

You are the only onelonging for thehours to pass

till your timecomes.

Upon this evaluation, an idea came to my mind on how to improve my life.

I'll take things easy.I'll try to open my heartto my love.

I'll listen moreto the onessurrounding me.

I'll try to travel more.

No, karaoke I'll never do,but I believe I'll sing more.

I'll go more timesto the seaside.

I'll make my bestto cook tasty food.

I'll join my friends’warmth.

A bit love more.

I'll be happierto get news from my friends...

and achieve together commonobjectives

I can’t be sure,but I believeit worths trying.

“Well, say what you want, but I ama nice guy!”

I'll co-operate clean the worldfrom nasty people.

And I hopethey won’t stop me

when my time comes.

I do not know whether it is good for everybody, but I’m sure that at least I will have had a wonderful time…

which by the way is what counts more.DON’T YOU THINK SO?

Setmy goal

andgo for it!

Last but not least …

Sincerely from ...

www.miorazli.com


OrganizationOrganization PersonalPersonal


OrganizationOrganization

Cost StructureWhat are the most important costs inherent in our business model?Which Key Resources are most expensive?Which Key Activities are most expensive?Revenue Streams?

IS YOUR BUSINESS MORE:• Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)• Value Driven ( focused on value creation, premium value proposition)

SAMPLE CHARACTERISTICS:• Fixed Costs (salaries, rents, utilities)• Variable costs• Economic of scale• Economics of scope

Customer SegmentsFor whom are we creating value?Who are our most important customers?

• Mass Market• Niche Market• Segmented• Diversified• Multi-sided Platform

Value PropositionsWhat value do we deliver to the customer?Which one of our customer’s problems are we helping to solve?Which bundles of products and services are we offering to each Customer Segments? Which customer needs are we satisfying?

Characteristics• Newness• Performance• Customization• “Getting the Job Done”• Design• Brand/Status• Price• Cost Reduction• Risk Reduction• Accessibility• Convenience/Usability

ChannelsThrough which Channels do our Customer Segments want to be reached ?How are we reaching now?How are our Channels integrated?Which ones work best?Which ones are most cost –efficient?How are we integrating them with customer routines?

Channel Phases1. Awareness – How do we value awareness about our company’s products and services?2. Evaluation – How do we help customers evaluate our organization Value’s Propositions? 3. Purchase – How do we allow customers to purchase specific products or services?:4. Delivery – How do we deliver a Value’s Propositions to customers?5. After Sales – How do we provide post-purchase customer support?

Customer RelationshipWhat type of relationship does each ?Segments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our business model?How costly are they?

EXAMPLES:• Personal Assistance• Dedicated Personal Assistance• Self-Service• Automated Services• Communities• Co-creation

Revenue StreamsFor what value are our customers really willing to pay?For what do they currently pay?How are they currently paying?How much does each Revenue Stream contribute to overall revenues?

TYPES::•Asset sale•Usage fee•Subscription Fees•Lending/Renting/Leasing•Licensing•Brokerage fees•Advertising

FIXED PRICING:•List Price•Product feature dependent•Customer segment dependent•Volume dependent

DYNAMIC PRICING:•Negotiation (bargaining)•Yield Management•Real-time-Market

Key ResourcesWhat Key Resources do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue Streams?

TYPE OF RESOURCES:• Physical• Intellectual (brand, patents, copyrights, data)• Human• Financial

Key ActivitiesWhat Key Activities do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue Streams?

CATEGORIES:• Production• Problem Solving• Platform/Network

Key PartnersWho are our Key Partners?Who are our Key Suppliers?Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?

MOTIVATIONS FOR PARTNERSHIPS:• Optimization and economy• Reduction of risk and uncertainty• Acquisition of particular resources and activities


Customer Segments

For whom are we creating value?Who are our most important customers?

• Mass Market• Niche Market• Segmented• Diversified• Multi-sided Platform

Value PropositionsWhat value do we deliver to the customer?Which one of our customer’s problems are we helping to solve?Which bundles of products and services are we offeringto each Customer Segments? Which customer needs are we satisfying?

Characteristics• Newness• Performance• Customization• “Getting the Job Done”• Design• Brand/Status• Price• Cost Reduction• Risk Reduction• Accessibility• Convenience/Usability

Create Value in …

•Data & Info•HR Mgmt•Process Mgmt •Vendor Mgmt•CSR •Customer Mgmt •Financial •Communication•Leadership

ChannelsThrough which Channels do our Customer Segments want to be reached ?How are we reaching now?How are our Channels integrated?Which ones work best?Which ones are most cost –efficient?How are we integrating them with customer routines?

Channel Phases1.Awareness – How do we value awareness about our company’s products and services?2.Evaluation – How do we help customers evaluate our organization Value’s Propositions? 3.Purchase – How do we allow customers to purchase specific products or services?:4.Delivery – How do we deliver a Value’s Propositions to customers?5.After Sales – How do we provide post-purchase customer support?

Customer RelationshipWhat type of relationship does each ?Segments expect us to establish and maintain with them?Which ones have we established?How are they integrated with the rest of our business model?How costly are they?

EXAMPLES:•Personal Assistance•Dedicated Personal Assistance•Self-Service•Automated Services•Communities•Co-creation

Revenue StreamsFor what value are our customers really willing to pay?For what do they currently pay?How are they currently paying?How much does each Revenue Stream contribute to overall revenues?

TYPES:•Asset sale•Usage fee•Subscription Fees•Lending/Renting/Leasing•Licensing•Brokerage fees•Advertising

FIXED PRICING:•List Price•Product feature dependent•Customer segment dependent•Volume dependent

DYNAMIC PRICING:•Negotiation (bargaining)•Yield Management•Real-time-Market

Key Resources

What Key Resources do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue Streams?

TYPE OF RESOURCES:•Physical•Intellectual (brand, patents, copyrights, data)•Human•Financial

Key Activities

What Key Activities do our Value Propositions require?Our Distribution Channels?Customer Relationships?Revenue Streams?

CATEGORIES:•Production•Problem Solving•Platform/Network

(80/20 Rule)

(80/20 Rule)

Key Partners

Who are our Key Partners?Who are our Key Suppliers?Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?

MOTIVATIONS FOR PARTNERSHIPS:•Optimization and economy•Reduction of risk and uncertainty•Acquisition of particular resources and activities

Cost Structure

What are the most important costs inherent in our business model?Which Key Resources are most expensive?Which Key Activities are most expensive?Revenue Streams?

IS YOUR BUSINESS MORE:•Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)

•Value Driven ( focused on value creation, premium value proposition)

SAMPLE CHARACTERISTICS:•Fixed Costs (salaries, rents, utilities)•Variable costs•Economic of scale•Economics of scope


CreativityCreativity

Think out of Think out of the Box?the Box?

Creativity!Creativity!exerciseexercise

StevenJohnson-CreativityStevenJohnson-CreativityAll Rights Reserved Mior Azli 2008 Kreativiti Untuk Berjaya


Blue Ocean Blue Ocean StrategyStrategy

Blue Ocean Strategy Blue Ocean Strategy is about creating is about creating completely new industries through completely new industries through

fundamental differentiationfundamental differentiation as opposed as opposed to competing in existing industries by to competing in existing industries by

tweaking established models.tweaking established models.

Idea 1/3Idea 1/3

Blue Ocean Strategy Blue Ocean Strategy is also about is also about exploring exploring non-customer groupsnon-customer groups to tap to tap

untouched marketsuntouched markets..

Idea 2/3Idea 2/3

Existing CustomerExisting Customer New CustomerNew Customer

Exi

stin

g S

ervi

ces

Exi

stin

g S

ervi

ces

New

Ser

vice

sN

ew S

ervi

ces

ExistingExistingMarketMarket

New New MarketMarket

New New MarketMarket

NewNewMarketMarket

Blue Ocean Strategy Blue Ocean Strategy is about is about increasing value for customers increasing value for customers by by creatingcreating new benefits and services, new benefits and services, while simultaneously while simultaneously reducingreducing costs costs by eliminating less valuable by eliminating less valuable

features or services. features or services.

Idea 3/3Idea 3/3

Value InnovationValue Innovation

- Cost- Cost + Value+ Value

Eliminate Raise

Which factors can you eliminate that your industry has long competed on?

Which factors should be raised well above the industry’s standard?

Reduce Create

Which factors should be reduced well below the industry’s standard?

Which factors should be created that the industry has never offered?

Value InnovationValue Innovation

CostCostImplicationImplication

ValueValueCreationCreation

Eliminate Raise

Which factors can you eliminate that your industry has long competed on?

Which factors should be raised well above the industry’s standard?

Reduce Create

Which factors should be reduced well below the industry’s standard?

Which factors should be created that the industry has never offered?

Case StudyCase Study

Circus IndustryCircus IndustryVideoOldCircusVideoOldCircus

Animal Care

AnimalsStar Performers

Costly Animal MaintenanceCostly Star Performers fees

Star PerformersAnimal ShowsMultiple Show

ArenaFun & HumorUnique Venue

Ticket Price IncreaseAisle Concession Sale

Focus on families

(80/20 Rule)(80/20 Rule)

ELIMINATE REDUCE RAISE CREATE

??? ??? ??? ???

Animal Care

AnimalsStar Performers

Costly Animal MaintenanceCostly Star Performers fees

Star PerformersAnimal ShowsMultiple Show

ArenaFun & HumorUnique Venue

Ticket Price IncreaseAisle Concession Sale

Focus on families

(80/20 Rule)(80/20 Rule)

ELIMINATE REDUCE RAISE CREATE

Star Performers

Animal Show

Multiple Show Arenas

Fun & Humor Unique Venue Theme

Refined Environment

Thrill & Danger

Artistic Music & Dance

ArtisticArtisticDevelopmentDevelopment

Animal CareAnimal Care

AnimalsAnimalsStar PerformersStar Performers

Refined Refined EnvironmentEnvironment

Costly Animal MaintenanceCostly Animal MaintenanceCostly Star Performers feesCostly Star Performers feesArtistic ProductionArtistic Production

Star PerformersStar PerformersAnimal ShowsAnimal ShowsMultiple Show Multiple Show

ArenaArenaFun & HumorFun & Humor

Thrill & DangerThrill & DangerThemeThemeRefined Refined

EnvironmentEnvironmentArtitistic Music Artitistic Music

& Dance& DanceUnique VenueUnique Venue

Ticket Price IncreaseTicket Price IncreaseMultiple Concession SalesMultiple Concession Sales

??????

Focus on Focus on familiesfamilies

Focus on Focus on Theater & Theater &

Opera VisitorsOpera Visitors

Adding the artistic Adding the artistic element to the Value element to the Value Proposition Proposition changes activities changes activities and costs.and costs.

Eliminating animals Eliminating animals from the show from the show substantially substantially reduces costs.reduces costs.

The Value The Value Proposition Proposition combines elements combines elements from circus, theater from circus, theater & Opera, which & Opera, which allows catering to allows catering to higher end higher end customers who pay customers who pay higher ticket prices.higher ticket prices.

++

ThemeTheme

Business Model CanvasBusiness Model Canvas Blue Ocean StrategyBlue Ocean Strategy

Exploring your Canvas with Exploring your Canvas with the Blue Ocean Strategy the Blue Ocean Strategy

(Four Actions Framework)(Four Actions Framework)

3 Approach3 Approach

EliminateEliminateReduceReduceRaiseRaiseCreateCreate



Approach 1Exploring

Cost Impact

Approach 2Exploring

Value PropositionImpact

Approach 3Exploring

Customer Impact


Approach 1: Exploring Cost Impact

•Which activities, resources & partnership have the highest cost?

•What happens if you reduce or eliminate some of these factors?

•How could you replace, using less costly elements, the value lost by reducing or eliminating expensive resources, activities, or partnership?

•What value would be created by planned new investments?


Approach 2: Exploring Value Proposition Impact

•What less-valued features or services could be eliminated or reduce?

•What features or services could be enhanced or newly created to produce a valuable new customer experience?

•What are the cost implications of your changes to the Value Proposition?

•How will changes to the Value Proposition affect the customer side of the model?


Approach 3: Exploring Customer Impact

•Which new Customer Segments could you focus on, and which segments could you possibly reduce or eliminate?

•What job do new Customer Segments really want to have done?

•How do these customers prefer to be reached and what kind of relationship do they expect?

•What are the cost implication of serving new Customer Segments?




Approach 1: Exploring Cost Impact•Which activities, resources & partnership have the highest cost?•What happens if you reduce or eliminate some of these factors? •How could you replace, using less costly elements, the value lost by reducing or eliminating expensive resources, activities, or partnership?•What value would be created by planned new investments?

Approach 2: Exploring Value Proposition Impact•What less-valued features or services could be eliminated or reduce?•What features or services could be enhanced or newly created to produce a valuable new customer experience?•What are the cost implications of your changes to the Value Proposition?•How will changes to the Value Proposition affect the customer side of the model?

Approach 3: Exploring Customer Impact•Which new Customer Segments could you focus on, and which segments could you possibly reduce or eliminate?•What job do new Customer Segments really want to have done?•How do these customers prefer to be reached and what kind of relationship do they expect?•What are the cost implication of serving new Customer Segments?

GemuruhGemuruh


Strategy Patterns Strategy Patterns OverviewOverview

STRATEGY PATTERNS OVERVIEWSTRATEGY PATTERNS OVERVIEW

PATTERNS OVERVIEWPATTERNS OVERVIEW

UnbundlinUnbundling Business g Business

ModelsModels

FREE as a FREE as a Business Business

ModelModel

The Long The Long TailTail

Multi-Multi-Sided Sided

PlatformsPlatforms

Open Open Business Business ModelsModels

• Context Context (Before)(Before)• ChallengeChallenge• Solution Solution (After)(After)• RationaleRationale• ExamplesExamples

Unbundling Business Models

Context(Before)

An integrated model combines infrastructure management, product innovation, and Customer Relationships under one roof.

Challenge • Costs are too high• Several conflicting organizational cultures are combined in a single entity, resulting in undesirable trade-offs.

Solution(After)

The business is unbundled into three separate but complementary models dealing with:• Product innovation• Customer relationships• Infrastructure management

Rationale IT and management tool improvements allow separating and coordinating different business models at lower cost, thus eliminating undesirable trade-offs.

Examples • Private banking• Mobile Telco

Unbundling Business ModelsUnbundling Business Models

Product Innovation

Customer Relationship Managemen

t

Infrastructure

Management

UNBUNDLING BUSINESS MODELS

EconomicsCompetitio

nCulture

PERSPECTIVES

Product Innovation

Customer Relationship Management

Infrastructure Management

Economics Early market entry enables charging premium prices and acquiring large market share; speed is key

High cost of customer acquisition makes it imperative to gain large wallet share; economies of scope are key

High fixed costs make large volumes essential to achieve low unit costs; economies of scale are key

Competition • Battle for talent• Low barriers to entry• Many small players thrive

• Battle for scope• Rapid consolidation• Few big players dominate

• Battle for scale• Rapid consolidation• Few big players dominate

Culture • Employee-centred• Coddling the creative stars

• Highly service-oriented• Customer-comes-first mentality

• Cost-focused• Stresses standardization, predictability, and efficiency

The Long Tail

Context(Before)

The Value Proposition targets only the most profitable clients.The Value Proposition targets only the most profitable clients.

Challenge Targeting less profitable segments with specific Value Targeting less profitable segments with specific Value Propositions is too costly.Propositions is too costly.

Solution(After)

The new or additional Value Proposition targets a large The new or additional Value Proposition targets a large number of historically less profitable, niche Customer number of historically less profitable, niche Customer Segments– which in aggregate are profitable.Segments– which in aggregate are profitable.

Rationale IT and operations management improvements allow IT and operations management improvements allow delivering tailored Value Propositions to a very large number delivering tailored Value Propositions to a very large number of new customers at low cost.of new customers at low cost.

Examples • Publishing Industry (Lulu.com)Publishing Industry (Lulu.com)• LEGOLEGO

Multi-Sided Platforms

Context (Before)

One Value Proposition targets one Customer Segment.One Value Proposition targets one Customer Segment.

Challenge Enterprise fails to acquire potential new customers who are Enterprise fails to acquire potential new customers who are interested in gaining access to a company’s existing customer interested in gaining access to a company’s existing customer base (e.g. game developers who want to reach console users)base (e.g. game developers who want to reach console users)

Solution(After)

A Value Proposition “giving access” to a company’s existing A Value Proposition “giving access” to a company’s existing Customer Segment is added (e.g. a game console manufacturer Customer Segment is added (e.g. a game console manufacturer provides software developers with access to its users)provides software developers with access to its users)

Rationale An intermediary operating a platform between two or more An intermediary operating a platform between two or more Customer Segments adds Revenue Streams to the initial model.Customer Segments adds Revenue Streams to the initial model.

Examples Google, Video game consoles (Nintendo, Sony, Microsoft), Apple Google, Video game consoles (Nintendo, Sony, Microsoft), Apple (iPod, iTunes, iPhone)(iPod, iTunes, iPhone)

FREE as a Business Model

Context (Before)

A high-value, high-cost Value Proposition is offered to paying A high-value, high-cost Value Proposition is offered to paying customers only.customers only.

Challenge The high price dissuades customers.The high price dissuades customers.

Solution(After)

Several Value Propositions are offered to different Customer Several Value Propositions are offered to different Customer Segments with different Revenue Streams, one of them being Segments with different Revenue Streams, one of them being free-of-charge (or very low cost)free-of-charge (or very low cost)

Rationale Non-paying Customer Segments are subsidized by paying Non-paying Customer Segments are subsidized by paying customers in order to attract the maximum number of users.customers in order to attract the maximum number of users.

Examples Advertising & newspapers, Advertising & newspapers, MetroMetro, Flickr, Open Source, Red Hat, , Flickr, Open Source, Red Hat, Skype (vs. Telco)Skype (vs. Telco)

Open Business Models

Context (Before)

R&D Resources & Key Activities are concentrated in-house:R&D Resources & Key Activities are concentrated in-house:• Ideas are invented “inside” onlyIdeas are invented “inside” only• Results are exploited “inside” onlyResults are exploited “inside” only

Challenge R&D is costly and/or productivity is falling.R&D is costly and/or productivity is falling.

Solution (After)

Internal R&D Resources and Activities are leveraged by utilising Internal R&D Resources and Activities are leveraged by utilising outside partners. Internal R&D results are transformed into a Value outside partners. Internal R&D results are transformed into a Value Proposition and offered to interested Customer Segments.Proposition and offered to interested Customer Segments.

Rationale Acquiring R&D from external sources can be less expensive, resulting Acquiring R&D from external sources can be less expensive, resulting in faster time-to-market. Unexploited innovations have the potential in faster time-to-market. Unexploited innovations have the potential to bring in more revenue when sold outside.to bring in more revenue when sold outside.

Examples Procter & Gamble, GlaxoSmithKline, InnocentiveProcter & Gamble, GlaxoSmithKline, Innocentive

Unbundling Unbundling Business Business ModelsModels

The Long TailThe Long Tail Multi-Sided Multi-Sided PlatformsPlatforms

FREE as a FREE as a Business Business

ModelModel

Open Open Business Business ModelsModels

Context Context (Before)(Before)

Infrastructure management + product innovation + customer r/ship

Most profitable clients Main target

1 VP 1 Customer Segment (CS)

High-value, high-cost VP Paying customers ONLY!

R&D must only be conducted within the company itself

ChallengeChallenge High costs and clash of organizational cultures

Targeting less profitable clients with over-Specific Value Propositions (VP) is too costly

Failure to gain new customers to add to existing customer base

High price = no customers

Too expensive; decrease in productivity

Solution Solution (After)(After)

Solved into 3 separate complementary models (refer “Context”)

New/additional VP targets niche customers profitable

VP access to company’s existing CS

Some VP different CS with different RS (e.g. FOC or very low cost)

Internal R&D transformed into VP interested CS

RationaleRationale Eliminates undesirable trade-offs

Allow delivering VP to a large number of new customers + low cost

Intermediary with more CS adds Revenue Streams (RS)

Non-paying CS subsidised by paying customers attract maximum amount of users

R&D from external sources Less costly Faster time-to-market


Implementing Business Implementing Business Models In OrganizationsModels In Organizations

Implementing Business Models In Implementing Business Models In OrganizationsOrganizations

5 IMPORTANT AREAS THAT SHOULD BE ALIGNED IN AN ORGANIZATION

STRATEGY REWARDSSTRUCTURE PROCESSES PEOPLE

STRATEGYSTRATEGY

• Strategy drives the business model. • Do you want to grow 20% in new market segments? • Then that should be reflected in your business model in terms of new Customer Segments, Channels or Key Activities.

• Strategy drives the business model. • Do you want to grow 20% in new market segments? • Then that should be reflected in your business model in terms of new Customer Segments, Channels or Key Activities.

STRUCTURESTRUCTURE• The characteristics of a business model determine the optimal organisational structure for its execution. • Does your business model call for a highly centralised or decentralised organisational structure? • If you will implement the model in an established business, should the new operation be integrated or spun off?

• The characteristics of a business model determine the optimal organisational structure for its execution. • Does your business model call for a highly centralised or decentralised organisational structure? • If you will implement the model in an established business, should the new operation be integrated or spun off?

• Different business models require different reward systems. • A reward system must use appropriate incentives to motivate workers to do the right things. • Does your model require a direct sales force to acquire new customers? • Then your reward system should be highly performance-oriented. • Does your model depend heavily on customer satisfaction? • Then your reward system must reflect that commitment.

• Different business models require different reward systems. • A reward system must use appropriate incentives to motivate workers to do the right things. • Does your model require a direct sales force to acquire new customers? • Then your reward system should be highly performance-oriented. • Does your model depend heavily on customer satisfaction? • Then your reward system must reflect that commitment.

REWARDSREWARDS

PEOPLEPEOPLE

• Certain business models call for people with particular mindsets. • For example, some business models call for particularly entrepreneurial mechanisms to bring products and services to market. • Such models must give employees significant leeway, which means hiring proactive, but dependable, free-thinkers.

• Certain business models call for people with particular mindsets. • For example, some business models call for particularly entrepreneurial mechanisms to bring products and services to market. • Such models must give employees significant leeway, which means hiring proactive, but dependable, free-thinkers.

PROCESSESPROCESSES

• Each business model demands different processes. • Operations run under a low- cost business model should be lean and highly automated. • If the model calls for selling high-value machines, quality processes must be exceptionally rigorous.

• Each business model demands different processes. • Operations run under a low- cost business model should be lean and highly automated. • If the model calls for selling high-value machines, quality processes must be exceptionally rigorous.

strategy

structurepeople

rewardsprocesse

s

Direction

What are your strategic goals? How do they drive the business models?

Power

What type of organisational structure does your business model require?

Information

What information flows, processes, and workflows does your business model require?

Motivation

What reward system does your business model require? How can you motivate your people?

Skills/mindset

What kinds of people with what skills does your business model require? What type of mindset is needed?


PersonalPersonal










7) Key 7) Key ActivitiesActivities

Who you help?Who you help?- Within Org.- Within Org.- Outside Org.- Outside Org.

How you Help?How you Help?- How you help How you help others others to get their job to get their job done?done?- What they hire What they hire me to me to perform?perform?

Reality Check:Reality Check:This is what the This is what the customers want customers want AND they don’t AND they don’t bother what you bother what you do!do!

How they know How they know you and how you you and how you deliver?deliver?- How they know How they know you you can help?can help?- How will they How will they decide decide whether to buy? whether to buy? - - (Benefits)(Benefits)- How will they How will they buy it?buy it?- How will you How will you deliver?deliver?- How to follow-How to follow-up? up?

How you interact?How you interact?Depending on:Depending on:- Single Single transactiontransaction- Ongoing servicesOngoing services

Personal?Personal?Automated?Automated?Self Service? Self Service?

What you get? (Revenue & Benefits)What you get? (Revenue & Benefits)- With $$$With $$$- Non $$$Non $$$

Who you are and Who you are and what you have?what you have?- Interest?Interest?- SkillsSkills- KnowledgeKnowledge- Tangible assetsTangible assets

What you do?What you do?- Day to dayDay to day- List out truly List out truly important only.important only.

MakingMakingSellingSellingIntellectualIntellectualFinancialFinancial

Who help you?Who help you?ProvideProvide- Motivation.- Motivation.- AdviceAdvice- OpportunitiesOpportunities

What you give? (Cost)What you give? (Cost)- With $$$With $$$- Non $$$Non $$$

(80/20 Rules)(80/20 Rules)

Design For: Design For: Design By: Design By: Mior AzliMior Azli Date: Date: 27 Aug 201227 Aug 2012 Version: Version: 11










SMEsSMEs

ProductivityProductivity

Tag LineTag Line““PPB3KPPB3K is a is a ‘productivity ‘productivity

plumber’.plumber’.PPB3KPPB3K locate locate

leaks and clogs leaks and clogs in a Biz Unit to in a Biz Unit to make needed make needed

repairs and keep repairs and keep profits flowing!profits flowing!

AccountAccountManagerManager

‘‘2’2’

SustainabilitySustainability@ AMD@ AMD

Networking!Networking!Networking!Networking!Networking!Networking!

InfluenceInfluenceDecisionDecision

MakerMaker

PersonPersonal Goalal Goal

•SeminarsSeminars•WorkshopWorkshopss•ConsultanConsultancycy•BooksBooks

PastPastCustomeCustomersrs

Quantum Quantum SolutionsSolutions

CreativityCreativity

OrganisationalOrganisationalTransformationTransformation

Change-MITMChange-MITM


Personal Personal ValidationValidation











Do the Do the customers customers care about care about the job that the job that you are you are providing?providing?

Are they Are they willing to willing to pay?pay?

Do you able Do you able to create a to create a memorable memorable elevator elevator pitch of your pitch of your VP?VP?

Through Through which CH the which CH the customers customers want to be want to be contacted contacted and served?and served?

Are you Are you proposing proposing the the appropriate appropriate CR?CR?

Are you able to make money?Are you able to make money?

Are the Are the customers customers confident confident that you that you possess KRs possess KRs to deliver to deliver your VP?your VP?

Do your KAs Do your KAs support your support your VP?VP?(80/20 Rule)(80/20 Rule)

Are the Are the customers customers confident confident that you that you possess KPs possess KPs to deliver to deliver your VP?your VP?

Are you able to serve more Customers without jeopardizing Are you able to serve more Customers without jeopardizing Quality?Quality?Are you able to serve more Customers with less Cost?Are you able to serve more Customers with less Cost? VideoPeopleOfCDSVideoPeopleOfCDS

(80/20 Rules)(80/20 Rules)


Cascading Cascading ConceptConcept

DepartmentDepartment

UnitUnit

IndividualIndividual

Ali

gn

men

tA

lig

nm

ent

Su

pp

ort

Su

pp

ort

Cascading ConceptCascading Concept


Design PhaseDesign Phase

BUSINESS MODEL DESIGN: 5 PHASESBUSINESS MODEL DESIGN: 5 PHASES

MOBILIZEMOBILIZEFocus:Focus: Setting Setting

the Stagethe Stage

UNDERSTANDUNDERSTANDFocus: Focus:

ImmersionImmersion

DESIGNDESIGNFocus:Focus: Inquiry Inquiry

IMPLEMENTIMPLEMENTFocus: Focus:

ExecutionExecution

MANAGEMANAGEFocus:Focus: Evolution Evolution

Assemble all the elements for successful business model design. Create awareness of the need for a new business model, describe the motivation behind the project, and establish a common language to describe, design, and analyse and discuss business models.

You and the business model design team immerse yourselves in relevant knowledge: customers, technology, and environment. You collect information, interview experts, study potential customers and identify needs and problems.

Transform the information and ideas from the previous phase into business model prototypes that can be explored and tested. After an intensive business model inquiry, select the most satisfactory business model design.

Implement the selected business model design.

Set up the management structures to continuously monitor, evaluate, and adapt or transform your business model.


BenefitsBenefits

BenefitsBenefits

Helicopter ViewHelicopter ViewOf Business ModelOf Business Model

InculcateInculcate

‘‘Buy-In’Buy-In’

What Else?What Else?TeamTxTeamTx

Meaning of WorkMeaning of Work(People Proposition)(People Proposition)

Avoid Silo MentalityAvoid Silo Mentality

MakingMakingThinkingThinkingVisibleVisible

ClearClearCustomerCustomer

ExpectationExpectation

Parting words …Parting words …

““Teachers open the door Teachers open the door but you must but you must enter by enter by

yourself.” yourself.”

Avoid Avoid L.O.D.I.L.O.D.I.((Law of Diminishing IntentLaw of Diminishing Intent))

TIMETIME

INT

EN

TIN

TE

NT

Kajian dari Universiti Brigham Young …Kajian dari Universiti Brigham Young …

1)1)Itu satu idea yang baik …Itu satu idea yang baik … Peluang untuk berubah – Peluang untuk berubah – 10%10%

2) Saya akan melakukannya …2) Saya akan melakukannya … Peluang untuk berubah – Peluang untuk berubah – 25%25%

3) Saya akan melakukannya pada tarikh … 3) Saya akan melakukannya pada tarikh … Peluang untuk berubah – Peluang untuk berubah – 40%40%

4) Saya telah mempunyai pelan terperinci untuk 4) Saya telah mempunyai pelan terperinci untuk melakukannya …melakukannya …

Peluang untuk berubah – Peluang untuk berubah – 50%50%

5) Saya telah komited pada seseorang untuk 5) Saya telah komited pada seseorang untuk melaksanakannya …melaksanakannya …Peluang untuk berubah – Peluang untuk berubah – 60%60%

6) Saya telah menentukan masa tertentu untuk 6) Saya telah menentukan masa tertentu untuk berkongsi kemajuan perlaksanaan ini dengan berkongsi kemajuan perlaksanaan ini dengan seseorang ...seseorang ...

Peluang untuk berubah – Peluang untuk berubah – 95%95%

Untuk elak L.O.D.I.!(Law of Diminishing Intent)

www.miorazli.comwww.miorazli.com

why are we here? why are we here? to generate new ideas for a better tomorrow (tnb) grouping

Documents

business model vision

cupcakes business slide

following slide

key trends market analysis

risk analysis

acquiring key resources

new idea slide

video elements xplain