Business Model Generation

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Enhance Dialogue

Collective reference point, shared language, joint understanding

Improve Communication

Create company-wide understanding, selling internally, selling externally (sell to investors)

Factors specific to Established Organizations

Reactive, Adaptive, Expansive, Pro-active/Exploration

Business Model Design and Innovation

Satisfy market, Bring to Market, Improve Market, Create Market

Brainstorming Rules

Stay focused, enforce rules, think visually, prepare for brainstorming with some sort of immersion experience

9. cost structure

The business model elements result in the cost structure

1 customer segments

an organization serves one or several customer segments

Customer-driven

based on customer needs, facilitated access, or increased convenience

A business model

describes The rationale of how an organization creates delivers in captures value

2. value propositions

it seeks to solve customer problems and satisfy customer needs with value propositions

Resource-driven

originated from an organizations existing infrastructure or partnerships to expand or transform the business model

5. revenue streams

revenue streams result from value propositions successfully offered to customers

3. channels

value propositions are delivered to customers through communication distribution and sales channels

Understand the essence

visual grammar, capturing the big picture, seeing relationships

Explore Ideas

visual representation makes things less vague and triggers ideas, a visual business model also provides opportunity for play

Design Attitute

Business model takes time bc there is so much ambiguity. The DA in contrast assumes that it is difficult to come up with an outstanding alternative, but once you have, the decision about which alternative to select becomes trivial.

Technique 1 Customer Insights

Good businesses view the business model through the customers eyes, an approach that can lead to the discovery of new opportunities. Apple perceived that customers wanted a seamless way to seek, buy, and download music. The challenge is to develop a sound understanding of customers on which to base business model design choices. The challenge of innovation is developing a deeper understanding of customers rather than just asking them what they want. A number of business model innovations have succeeded precisely because they satisfied the unmet needs of new customers ex easyJet made air travel available to lower and middle income customers who rarely flew

6. Key resources

Key resources are the assets required to offer and deliver the previously described elements

Business Model Design Process

Mobilize Understand Design Implement Manage

Technique 2 Ideation

Real innovations emerge from something better described as systematic chaos. Ideation is a creative process for generating a large number of business model ideas and successfully isolating the best ones. Business model innovation is not about copying or benchmarking. Ideation has 2 main phases: 1. idea generation where quantity matters and 2. synthesis in which ideas are discusses, combined, and narrowed down to a small number of viable options. We are held back by the status quo sometimes; it stifles imagination.

8. Key partnerships

some activities are outsourced and some resources are acquired outside the enterprise

The Ideation Process

1. Team Composition: need a diverse team to generate fresh business model ideas 2. Immersion: ideally teams should go through an immersion phase, which would include general research, studying customers of prospects 3. Expanding:team expands the range of possible solutions, aiming to generate as many ideas as possible. Each of 9 business model building blocks can serve as starting point 4. Criteria Selection: the team should define criteria for reducing the number of ideas to a manageable few 5. Prototyping: Team finds 3 ideas and uses the BMC to sketch out and discuss each idea as a business model prototype Business model innovation requires the participation of people from across the entire organization

The Business Model Canvas

A shared language for describing visualizing assessing and changing business models

5 phases of process

Mobilize=prepare for a successful business model design project, setting the stage, create awareness for a new business model. Establish the BMS as the shared language of the design effort Understand=research and analyze elements needed for the business model design effort, immersion. This includes sketching competitor business models Design=generate and test viable business model options and select the best, so make prototypes, and narrow it down, expansive thinking. explore multiple ideas bc it will yield the best alternatives Implement=execution Manage=adapt and modify the business model in response to market reaction

5 Storytelling

Why storytelling? -Introduces the new. A good story is a compelling way to quickly outline a broad idea before getting into the details -Pitching to Investors -Engaging Employees Making Business Models Tangible: Give the company perspective or customer perspective Making the future Tangible: a good story can help you challenge the status quo by blurring the lines between reality and fiction Developing the story: Amazon example Techniques: talk and image, video clip, role play, text and image, comic strip

7. Key activities

by performing a new number of key activities

goal of customer empathy map

create a customer viewpoint for continuously questioning your business model assumptions

Offer-driven

create new value propositions that affect other business model building blocks

4. customer relationships

customer relationships are established and maintained with each customer segment

4 main areas of a business

customer, offer, infrastructure, and financial viability

Finance-Driven

driven by new revenue streams, pricing mechanisms, or reduced cost structures that affect other business model building blocks. Ex Xerox leased copying machine for 95 dollars per month

Multiple-epicenter driven

innovations driven by multiple epicenters can have significant impact on several other building blocks. EX Hilti moved away from selling tools outright and toward renting sets of tools to customers. This changed Hilti's value proposition and its Revenue Stream

Technique 4: Prototyping

making and manipulating a business model prototype forces us to address issues of structure, relationship, and logic in ways unavailable through mere thought and discussion. Businesses that fail to take the time to develop groundbreaking business model ideas risk being sidelined or overtaken by more dynamic competitors. Design attitude is to think through a number of basic business model possibilities before developing a business case for a specific model. The attributes of design att include willingness to explore crude ideas, rapidly discard them, then take the time to examine multiple possibilities before choosing to refine a few and accepting uncertainty until a design direction matures. DA demands changing one's orientation from making decision to creating options from which to choose. Business model prototyping stands for an uncompromising commitment to discovering new and better business models by sketching out many prototypes representing many strategic options. Napkin Sketch>Elaborate Canvas>Business Case>Field test

6 Scenarios

primary function is to inform the business model developmen process by making the design context specific and detailed first scenario describes customer setting second scenario describes future environments in which a business model might compete 1. Develop a set of future scenarios based on 2 or more criteria 2. Describe each scenario with a story that oulines the main elements of the scenario 3. Develop one or more appropriate business models for each scenario

Technique 3 Visual Thinking

visual techniques gives life the business model and unearth logical gaps. Post it notes are important because in the beginning ppl do not immediately agree on what should be included on the business model canvas. Crude drawings can make things tangible and understandable


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