business model cybernetics: simply create, deliver, and share awesome customer experiences (aces)
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#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
Living System Dashboard
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR (Tool/Org.;
Func@onality)
INPUT (Ideas/
Resources)
OUTPUT (Trade-‐off/ Experience)
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
INPUT (Ideas/
Resources)
Feedback(Strategy/TacIcs)
OUTPUT (Trade-‐off/ Experience)
+ -‐
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
PROCESSOR (Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
INPUT (Ideas/
Resources)
Learn (Strategy/TacIcs)
OUTPUT (Trade-‐off/ Experience)
+ -‐
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
PROCESSOR (Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
“Fake XP”/Build
Living System Dashboard
Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
INPUT (Ideas/
Resources)
Learn (Strategy/TacIcs)
OUTPUT (Trade-‐off/ Experience)
+ -‐
CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups)
PROCESSOR (Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
Learn (Strategy/TacIcs)
INPUT (Ideas/
Resources)
+ -‐
OUTPUT (Trade-‐off/ Experience) SU
PPLIER
S
CUSTOMER
S
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups)
PROCESSOR (Tool/Org.;
Func@onality)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups)
SUPERSYSTEM
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups) SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups) SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups) SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups) SYSTEM (Chain & Hierarchy of Jobs To Get Done)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
Present: RED OCEAN
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
(AWFUL FINAL RESULT/VISION/GOAL/FAILURE CRITERIA)
Living System Dashboard
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
Future: BLUE OCEAN
Living System Dashboard
“Fake XP”/Build Test XP/Measure
Legend The following topics, which describe elements of a business model on slides 7 to 13 are obtained from the book, “Business Model Genera@on” by Alexander Osterwalder and Yves Pigneur.
q Key Partners (KP)
q Key Resources (KR)
q Key Ac@vi@es (KA)
q Value Proposi@on (VP)
q Channels (CH)/Customer Rela@onships (CR)
q Customer Segments (CS)
q Cost Structure (C$)
q Revenue Streams (R$)
The above topics are also visually presented on the Business Model Canvas which can be obtained here: h`p://www.businessmodelgenera@on.com/downloads/business_model_canvas_poster.pdf
PESTLIED is an acronym for Poli@cal; Economic; Social; Technological; Legal; Interna@onal; Environmental; Demographic
Axiom of Business Model Cyberne^cs
CUSTOMER Hires (Chooses) OUTPUT (Product/Service) from PROCESSOR (Organiza@on/Tool) In Order to Achieve SYSTEM’S “Job To Get Done”
Examples
1-‐Minute Living System Dashboard (“Measure-‐Learn-‐Build (MLB)” Loop)
Startups Enjoy Great Success
When They Discover and Solve BUMPs: (Big Urgent Market Problems)
& Deliver ACEs
(Awesome Customer Experiences)
Measure and Disrupt the Trade-‐off of
Red Ocean (Exis^ng) Compe^tors
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS for Apple’s iPod
Living System Dashboard for Apple’s iPod
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Red Ocean DisrupIon (ROD) Strategy/TacIcs)
INPUT
Apple’s System: Listen to Music
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S
“Insanely Great Customer Experience”; Extraordinary Profitability
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
Digital Music Player
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS for Cirque du Soleil
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Red Ocean DisrupIon (ROD) Strategy/TacIcs)
INPUT
Cirque du Soleil’s System: Experience Live Entertainment
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S
Awesome Customer Experience, Loyalty, and Profitability
Living System Dashboard for Cirque du Soleil
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
Circus-‐Theater
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS for Southwest Airlines
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Red Ocean DisrupIon (ROD) Strategy/TacIcs)
INPUT
Southwest Airline’s System: Travel/Commute (by Air)
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S
Awesome Customer Experience, Loyalty, and Profitability
Living System Dashboard for Southwest Airlines
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
Airline Service
“Fake XP”/Build Test XP/Measure
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS for Zappos
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Red Ocean DisrupIon (ROD) Strategy/TacIcs)
INPUT
Zappos’ System: Buy Shoes Online
+ -‐
OUTPUT
NEW ENTRANTS (Startups)
KP
VP KA KR
CS R$ C$
CH
CR CUSTOMER
S
SUPP
LIER
S
“Insanely Great Customer Experience”; Extraordinary Profitability
Living System Dashboard for Zappos
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
eCommerce Website
“Fake XP”/Build Test XP/Measure
BONUS Integra^on of
Porter’s 5 Forces, Generic Strategies, and
Value Chain Using the Living System Dashboard
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
BUSINESS MODEL CYBERNETICS
ENVIRONMENT (IDEAL FINAL RESULT/VISION/GOAL/SUCCESS CRITERIA)
PROCESSOR
Learn (Strategy/TacIcs)
INPUT
+ -‐
OUTPUT
CUSTOMER
S
SUPP
LIER
S
IL
P T
HR FI O OL
MS S
Profit Margin
Simply Create, Deliver, and Share Awesome Customer Experiences (ACEs)
(IN)DIRECT COMPETITORS (Subs@tutes/Complements)
NEW ENTRANTS (Startups)
Living System Dashboard
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
“Fake XP”/Build Test XP/Measure
Legend The following topics, which describe elements of a business model on slide 24 are based on a descrip@on of ac@vi@es in Michael Porter’s Value Chain
Firm infrastructure
Human Resource Management
Technology
Procurement
Inbound Logis@cs
Opera@ons
Outbound Logis@cs
Marke@ng & Sales
Service
IL
P
T
HR
FI
O
OL
MS
S
COLLABORATORS
COMPETITORS
SUPPLIERS CUSTOMERS
DifferenIaIon of inputs
Supplier concentraIon
Importance of volume and speed to supplier
Cost relaIve to
total purchases
Impacts of input on cost & differenIaIon
Forward IntegraIon
Presence of subsItute inputs
Backward IntegraIon
RelaIve price performance of subsItutes
Switching costs Buyer propensity to subsItute
Diversity
Fixed costs/value added Brand idenIty
Overcapacity
InformaIon complexity Entry barriers
Product differences
Product differenIaIon
Buyer concentraIon
IncenIves for decision-‐makers
Price/ Volume/ Total purchase
Impacts of quality/performance
Switching costs
Buyer info’
Backward/Forward IntegraIon
Buyer profits
Access to distribuIon
Economies of scale Capital requirements
Government policy
Exit barriers
Channel/distributor concentraIon DifferenIaIon of channels/distributors
Backward IntegraIon Forward IntegraIon
Cost advantages Trends/PaYerns Tipping point
Virality
ROI
Source: Based on Porter, M. (1998) Compe^^ve Advantage. New York: The Free Press. Porter, M. (1998) Compe^^ve Strategy. New York: The Free Press.
#4ROD. Dr. Rod King. rodkuhnhking@gmail.com & h8p://businessmodels.ning.com & h8p://twi8er.com/RodKuhnKing
ENVIRONMENT (INDUSTRY)
SYSTEM (Chain & Hierarchy of Jobs To Get Done)
BUSINESS MODEL CYBERNETICS
Checklist for Industry Factors
Business Model Cyberne^cs Is About
Simply Crea^ng, Delivering, and Sharing Awesome Customer Experiences
(ACEs)
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