Business Model
Innovation from
around the world
Presented by : Greg Bernarda
1m or 1b+
search
execution
design
testing
[Source: design squiggle adapted from Damien Newman, Central]
1
Tools
2
Design
3
Testing
Tools
http://media.100firsthits.com/2013/11/Startup-Mistakes-Infographics.png
!
customer profile
value map
tells the story of how
you create value for
your customers
sources: Henry Chesbrough, photo: life.com
1958
sources: Henry Chesbrough, photo: xerox.com
tells the story of how
you create value for
your customers
tells the story of how
you create, deliver
and capture value for
your organization
… … … … … … … … … … … …clear conversations
Joe Shlabotnik
New focus on
home customer
Cheap enough
high-quality
machines
Create loyalty
+ lock-in
Capsules
Own channels
Sell coffee
with much
higher
margin
HOW MUCH IS
1KG
OF COFFEE
IN SWITZERLAND?
CHF 9.-
(LKR 1,200)
/kg
CHF
95.-
(LKR 13,150)
/kg
Over
CHF 3 billion
(LKR 415
billion)
annual revenue with
1 product line
Nespresso
changed the
business model
for espresso
Designing great BMs
2
7
Questions for business
models as
stories
1
How could we dramatically
increase switching costs?
2
How could we generate more
sources: Henry Chesbrough, photo: xerox.com
COST STRUCTURE REVENUE STREAMS KEY
PARTNERS ACTIVITIES KEY
KEY RESOURCES CHANNELS CUSTOMER SEGMENTS CUSTOMER RELATIONSHIP VALUE PROPOSITIONS
Sales o
f
Tools
R&D
Manufact
-uring
Customer
Service
Brand
Production
facilities
Production
Quality
Power T
ools
Red Box
Quality
B2B
Partner
Stores
Constru
c-
tion Wo
rkers
I want to avoid
delays, they cost
me money!
I want top
quality tools!
COST STRUCTURE REVENUE STREAMS KEY
PARTNERS ACTIVITIES KEY
KEY RESOURCES CHANNELS CUSTOMER SEGMENTS CUSTOMER RELATIONSHIP VALUE PROPOSITIONS
Production
Red Box
Quality
B2B
Partner
Stores
Sales o
f
Tools
Constru
c-
tion Wo
rkers
R&D
Manufact
-uring
Brand
Production
facilities
Repair &
Mainte-
nance service
Fleet
Mgt
Service
www.
hilti
.com
Recurring
Lease Fees
Lease
Contract
Fleet F
orce
IT Systems
Inventory
Customer
Service
Contract MgtDire
ct Sale
s
Quality
Power T
ools
Beats
competition
New
Customer
Recurring
revenues
Higher
margins
CEOs
3
Are we earning money before
we are spending it?
4
Is our cost structure substantially di
ff
erent
5
How much does our business model get
customers or third parties to create value
for us?
http://www.suttonselect.com/wp-content/uploads/2013/08/bigstock-Cute-Red-haired-Female-Reading-20577437.jpg
Data: Strategy Analytics
Chinese consumers Chinese smartphone + operating system
at low price
Social media (Weibo)
Hardware & software Taobao (e-commerce) Sale of smartphones OEMs Chinese consumers Chinese smartphone + operating system
at low price
Social media (Weibo)
Hardware & software Taobao (e-commerce) Sale of smartphones OEMs Fans of high-tech
Engage fans in product development
Word of mouth
Ethos: ‘Just for fans’
Inclusion of fans
Chinese consumers Chinese smartphone + operating system
at low price
Social media (Weibo)
Hardware & software Taobao (e-commerce) Sale of smartphones OEMs Fans of high-tech
Engage fans in product development
Word of mouth
Ethos: ‘Just for fans’
New innovation engine
Innovation + commercialization engine TV Games … TV Games … Chinese consumers Chinese smartphone + operating system
at low price
Social media (Weibo)
Hardware & software Taobao (e-commerce) Sale of smartphones OEMs Fans of high-tech
Engage fans in product development
Word of mouth
Ethos: ‘Just for fans’ Innovation + commercialization engine TV Games … TV Games …
Re-distribution of value
Priority access to new products 10% of revenues to fans’ projects Best fans become core teamIn… 5 years!
As of March 2015
6
How rapidly can we grow our business
model without hitting roadblocks (e.g.
2009
2011
Bits competing with bricks
End 2014
Bits competing with bricks
Early 2015
Bits competing with bricks
Mid 2015
Airbnb
$ 20 bln
!
Airbnb
$ 25.5 bln
!
| fortune.com!
7
How much is our business model
protecting us from competition?
appstore + ecosystem
1998
2002
2007
2009
DIGITAL
PLATFORM
DIGITAL
LIFESTYLE
DIGITAL
HUB
HARDWARE
MANUFACTURER
Act I
‘A Climate of suspicion’
IT Infrastructure
development 0.- 2-way review system
Express Logistics providers
Build missing infrastructure
Large choice of goods at best price quality
ratio
Banks & Alipay
Large pool of consumers with safe
payment process
Taobao.com Taobao.com
Act I: a climate of suspicion
淘宝网
Taobao.com
Chinese consumers Chinese sellersAct II
‘The Rise of
Micro-Entrepreneurs’
Large pool of consumers with safe
payment process 2-way review system
Express Logistics providers
Build missing infrastructure
Large choice of goods at best price-quality ratio Chinese consumers Chinese sellers
Business growth & management
Help entrepreneurs
succeed
Training & empowerment App developers
Fashion models Taobao.com Taobao.com Banks & Alipay
Act II: the rise of micro-entrepreneurs
Micro-entrepreneurs
淘宝网
Taobao.com
Act III
IT Infrastructure
development 0.- 2-way review system
Express Logistics providers
Build missing infrastructure
Large choice of goods at best price-quality ratio Chinese consumers Micro-entrepreneurs Help entrepreneurs succeed Taobao University Ads Sales of advanced features App developers
Fashion models
Access to hundreds of millions of consumers Ecosystem management
Business growth & management
Personalized assistance
Membership fees 2-5% on sales
Taobao.com Taobao.com
TMall.com
Banks & Alipay
Act III: a new asset is revealed
淘宝网
Taobao.com
Taobao in 10 years
C2C
small B2C
big B2C
?
C2B ?
1
Switching Costs
2
3
4
5
6
7
Recurring Revenues
Earning before spending
Di
ff
erent cost structure
Include customers in product
Scale rapidly
Protection from competition
Testing
3
1m or 1b+
search
execution
design
testing
[Source: design squiggle adapted from Damien Newman, Central]
