business models overview
TRANSCRIPT
Business Models Primer
INNOVATION PRIMER
INTRO TO BIZ MODELS
Business Models Primer
DISRUPTIVE INNOVATORS: WHY BUSINESS MODELS MATTER
Lady Gaga Mark Zuckerberg Oprah Winfrey Steve Jobs
Label Musician Entrepreneur Talk Show Host Inventor
Areas of Innovation
Notable in Business
Fast Company: Most Creative
Person in Business
Creative Consultant -
Polaroid
Time Magazine Person of the Year
World’s Youngest Billionaire
Barron’s: World’s Best CEO
Forbes: CEO of the Decade
CNN, Time, Life Magazines: Most
Influential Woman in the World
MusicMarketing
Business ModelFashionTheater
Activism
TechnologySocial Media
Business Model
MediaBranding
Business ModelPhilanthropy
TechnologyBranding
Business ModelExperience Design
Business Models Primer
CONTEXT: IDEO WAYS TO GROW MATRIX
NEW STUFF TO SAME OLD PEOPLE
TWEAK PRODUCT, SERVICE OR BRAND
SELL OLD STUFF TO NEW PEOPLE
SELL NEW STUFF TO NEW PEOPLE
Business Models Primer
WHAT IS INNOVATION?
EXAMPLES OF DISRUPTIVE INNOVATION
Business Models Primer
Profit ModelThe way in which you make money (Skype-
Freemium)
NetworkConnections with others to make value (Target-
designers)
StructureAlignment of Talent and Assets (Whole Foods-
feedback)
ProcessSuperior Methods
(Zara- Fast Fashion)
Product PerformanceDistinguishing Features and Performance
(OXO- Universal Design)
Product SystemComplimentary
Products, Systems, Services (Apple)
ServiceSupport enhancement that surround offering
(Zappos)
ChannelHow Products + Services
are Delivered (IKEA)
BrandRepresentation of Brand and Businesses (Virgin-
diversity)
Customer EngagementDistinct Interactions
(Wii)
DOBLIN TEN TYPES OF INNOVATION
Business Models Primer
APPAREL- FOOTWEAR INDUSTRY
Price Newness Style + Materials
Story Customer Engagem
ent
LOWLevel
Offering
HIGHLevel
offering
Customer Service + Loyalty
Mid RangeOffering
BLUE OCEAN STRATEGY CANVAS
Business Models Primer
Price Wine Distinctio
n + Marketing
Complexity and
Prestige
Ease of Selection
Fun and Adventur
e
Easy Drinking
BUDGET WINE
PREMIUM WINE
BLUE OCEAN STRATEGY CANVAS
LOWLevel
Offering
HIGHLevel
offering
Mid RangeOffering
Business Models Primer
Price Seating Choices + Lounges
Hub Connectivity
Speed Frequency point to point
departures
Friendly, flexible service
BANKRUPTCY
BLUE OCEAN STRATEGY CANVAS
LOWLevel
Offering
HIGHLevel
offering
Mid RangeOffering
Business Models Primer
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WHAT IS REALLY INNOVATIVE ABOUT THE IPOD? THE PRODUCT?
Business Models Primer
2006 2007 2008 2009 2010 2011
LIFECYCLE OF A DISRUPTIVE PRODUCT INNOVATION
Flip Video Launched May 2006 HD Flip Video Launched
Business Models Primer
WHAT EXACTLY IS A BUSINESS MODEL?
Business Models Primer
BUSINESS MODEL= ENGINE
FINANCIAL MODEL= FUEL OR ENERGY
BUSINESS PLAN= ROAD OR TRIP PLAN
BUSINESS MODELS: RELATED BUT OFTEN CONFUSED
Business Models Primer
Key Activities
Key Resources
Key PartnersINFRASTRUCTURE
How are you solving it?
The Value Proposition
Solution to the Pain Point
OFFERING
What problem are you solving?
Customer Relationship
s
Distribution Channels
Customer Segments
CUSTOMER
For whom are you solving it?
Cost Structure Revenue Streams
VALUE
Why are you solving it?
OSTERWALDER: THE BUSINESS MODEL CANVAS
Business Models Primer
$1000 per year $400-500 per year(device cost $250-$700)
Educational Textbooks
Business Models Primer
Key Activities
Key Resources
Key Partners The Value Proposition
Customer Relationships
Distribution Channels
Customer Segments
Cost Structure Revenue Streams
OSTERWALDER: THE BUSINESS MODEL CANVAS
Traditional Print Textbook Model
Instructor-Authors
EditorialProduct Develop
mentLearning Content
Direct (bookstores)
(Publishers- dedicated
sales force)
On Line Distributors
Bookstores
CONSUMERStudents
PURCHASER Bookstores
Owners
INFLUENCER Professor
EditorialKnowledge
Other Content
Providers:
Discovery Chanel
History Channel
National Geographic
Assoc Press
Intellectual Property
Print $5-$10Author Costs
$10-$15
SME Review
$15
Bookstore Mark up 20-
40%
Bookstore Returns
Editorial Staff +
Production
Textbook $100 ($120-$140 Retail)
Content Partner
Licensing
Business Models Primer
Key Activities
Key Resources
Key Partners The Value Proposition
Customer Relationships
Distribution Channels
Customer Segments
Cost Structure Revenue Streams
OSTERWALDER: THE BUSINESS MODEL CANVAS
Digital Textbook Model
Instructor-Authors
EditorialProduct Develop
mentLearning Content
Direct to Student
Itunes
Bookstores(Device)
PURCHASER Student
INFLUENCER Professor
EditorialKnowledge
Other Content
Providers:
Discovery Chanel
History Channel
National Geographic
Assoc Press
Intellectual Property
Digital Development Author Costs
$5-$10
SME Review
$15
Itunes Mark Up 30% NO RETURNS
CONSUMABLE
Editorial Staff +
Production
Digital License (40-50% of Print). $40-
$50)Content Partner
Licensing
Digital Product Development
Digital Learning Content
Knowledge
Business Models Primer
Home Video/Movies
$2.99 plus late fees $4.99-$19.99 month $7.99 month unlimited streaming$7.99 additional DVD mail unlimited
$1 per night
To Be Determined
Business Models Primer
Key Activities
Key Resources
Key Partners The Value Proposition
Customer Relationships
Distribution Channels
Customer Segments
Cost Structure Revenue Streams
OSTERWALDER: THE BUSINESS MODEL CANVAS
Blockbuster
Movie Studios
Access to
MoviesHome
Entertainment
Direct
Storefront
Mass Market
Inventory
Rent + Utilities
Advertising Movies
Breakage - Theft
InventoryMain Office Staff
Movie Rentals
Employees
Device Manufacturers
VHS and DVD Manufacturers
Movie SalesEquipment
RentalsSnacks
Business Models Primer
Key Activities
Key Resources
Key Partners The Value Proposition
Customer Relationships
Distribution Channels
Customer Segments
Cost Structure Revenue Streams
OSTERWALDER: THE BUSINESS MODEL CANVAS
Netflix by Mail (Old Model)
Postal Service
EditorialProduct Develop
ment FLEXBILE TO YOUR DOOR
Home Entertainment
Direct
Storefront
Originally Niche Market
Inventory
Distribution Warehouse
Advertising- Mailers-
Adoptions
Movies + Inventory
Breakage - Theft
Website, software, Algorithm
Main Office Staff
Movie Rentals
Employees
Device Manufacturers
DVD Manufacturers
Customer Preference Algorithm
Customer Reviews
Mass Market
Mail Distribution +
Fulfillment
Customer Preference Algorithm
Customer Reviews
Business Models Primer
Key Activities
Key Resources
Key Partners The Value Proposition
Customer Relationships
Distribution Channels
Customer Segments
Cost Structure Revenue Streams
OSTERWALDER: THE BUSINESS MODEL CANVAS
Netflix Streaming (New/Current Model)
EditorialProduct Develop
mentON DEMAND
Home Entertainment
Direct
Storefront
Originally Niche Market
Inventory
Content Storage
Advertising-
Movies
Main Office Staff
Movie Rentals
Device Manufacturers (Ipad, Wii, Wifi
Devices
Content Storage
Customer Preference Algorithm
Customer Reviews
Mass Market
Software developmen
t
Business Models Primer
What have we learned:
Innovation is more than product development and inventions
Business Models, Business Plans and Financial Models are different yet related and integrated.
External factors- changes in the environment force (and afford) business model innovation.
Industry disruption requires an integration of product/service innovation, infrastructure, and business.