Innovation Lec 4 - Business Model Canvas

What are the characteristics of costs?

Fixed Costs Variable Costs Economies of Scale Economies of Scope

What are the three types of Business Model Innovation?

Industry Model Revenue Model Enterprise Model IM RM EM

What are the 3 main categories of Key activities?

Production: Designing, making, delivering products in quantity or quality Problem Solving: consultancies like McKingsey Platofrm/network: Platform management, service provisioning, platform promotion: ebay/Visa

How did Zara apply business model innovation?

They followed enterprise Model business innovation. They linked customer demand to manufacturing and manufacturing to distribution.

What are the two types of revenue streams?

Transactional - One time customer Payments Ruccuring revenues - Ongoing payments to deliver a VP or provide post-purchase customer support e.g. car servicing.

What are the 3 questions to ask regarding value proposition and give some examples of them:

What do we deliver to customers? Which customer problems are we helping to solve? Which bundles of products/services are we offering to each customer segment?

What does it mean that banks have a multi-channel architecture?

branches, online banking, mortgage broke

Give some examples of Long tail companies

costs netflix very little to hold thousands of films Google shopping , from froogle and other google things

What are the economics, culture and competition within the a Customer relationship type business?

economics, competition and culture

What is an example of a unbundled business model?

tries separating to tackle all 3 sectors (Operational excellence ,Product Leadership ,Customer intimacy)

what are economies of scope?

Advantages of scope of operations. e.g. in a large enterprise the same marketting activites or distribution channels may support multiple products

Give some examples of ways to generate revenue streams

Asset sale usage fee subscription fees lending/renting/leasing Lisencing Brokerage fees Advertising

What are the two broad classes of cost structure?

Cost Driven (No frill airlines - low price value proposition, maximum automation, extensive outsourcing e.g. nokia, IBM) Value Driven (focus on value creation; luxury hotels)

What are fixed costs?

Costs remain the same in spite of volume of goods or servies produced; e.g. salaries, rents, manufacturing facilities

What are variable costs?

Costs that vary with volume of goods or servies produced ; e.g. music festivbal

What are the 4 chunks for the business model canvas?

Customer Production Cost Revenue

What is the motivation to gain customer relationships?

Customer Aquisition Customer retention Boosting Sales (upselling)

What are 3 fundamentally different types of businesses?

Customer relationship businesses Product innovation businesses Infrastructure businesses

What is a Business Model?

Describes the rationale of how an organisation creates, delivers and captures VALUE.

What is the point of a business model?

Enables new products and technologies to solve (new) customer problems

What is Zara's business model and unique about their marketting?

Fast Fashion Marketting strat: Zara focuses heavily on their product, place and pricing as opposed to promo>on.

What is Business Model important for Competitive advantage?

In opperations, many of the innovations and cost savings have already been achieved. It is important to innovate in areas where the competition doesn't act.

What is the the Revenue model of business model innovation?

Innovating how revenue is generated through: New Value Propositions Pricing Models

What is the the Enterprise model of business model innovation?

Innovating the VALUE chain roles by: Changing the extended enterprise to be more integrated or specialized Transforming networks with employees, suppliers, customers and others.

What is the the industry model of business model innovation?

It's innovating the industry VALUE chain by: Moving into new industries Redefining existing ones Creating entirely new value chains

Give 5 Examples of Customer Segments:

Mass Market Niche Market Segmented Diversified Multi-sided platforms

What is a Mass Market Customer Segment?

Model that doesn't distinguish between different customer segments. they focus on large group of customers with broadly similar needs and problems. e.g. consumer electronics

What is a Long Tail business Model Pattern?

Offering a large number of niche products, each of which sells relatively infrequently. It requires: low inventory cost and a strong platform. Sells very large number of niche pruducts in small quantities. lulu.com (anone can prublish) Lego factory (customer designed kits)

What should companies narrow their focus on?

Operational excellence Product Leadership Customer intimacy (very hard to do all 3)

What are the 3 motivations for partnerships?

Optimization and economy of scale Reduction of risk and uncertainty Aquisition of particular resources/activites.

What is an Owned Channel?

Owned Channel: have higher margins than partner ones but can be costly to put in place and to operate. They can be direct, such as inhouse sales force or a website or they can be indirect such as retail stores own and operated by the organisation.

What is a partner channel

Partner channel: Leads to lower margins, but they allow an organisation to expand its reach and benefit from partner strengths. They are indirect and span a whole range of options, such as wholesale distribution, retail or partner owned websites.

What are the categories of key resources?

Physical (buildings, manufacturing plants, vehicles, PoS systems) Intellectual: Brands (nike/sony), Software (Microsoft SAP) Human: People in knowledge-intensive and creative industries Financial: IBM financial services help customers to lease or buy IBM kit and deliver IBM a good revenue stream.

What is a Segmented Market Customer Segment?

Serve market segments with slightly different needs and problems. e.g. serving the medical, watch and industrial automation sectors.

What is a Diversified Customer Segment?

Serves two unrelated customer segments with very different needs. e.g. Amazon moving into the cloud.

What is a multisided customer segment?

Some organizations serve two or more independent customer segments.

What is a Niche Market Customer Segment?

Specific, Specialised customer segment that is all tailored to the requirements of nich market.

What are the 4 different type of Key Partnerships?

Strategic alliances : between non-competitors Co-opeition: strategic partnerships between competitors , often out sourcing Joint Ventures: to develop new businesses Buyer Suplier relationships : Enables reliable supply

How did Apple apply business model innovation?

They followed Industry Model business innovation. They changed the industry by producing Itunes and Ipod to make music accessible and easy to use. Followed up with Iphone and Ipad changing the market.

What are the questions to ask regarding Customer Relationships?

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