Business Model Generation
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
