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Management2.0: Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD DRAFT.

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Presentation on theme: "Management2.0: Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD DRAFT."— Presentation transcript:

1 Management2.0: Competitive Advantage through Business Model Design & Innovation Guadalajara, June 2007 Alexander Osterwalder, PhD alex@arvetica.com DRAFT VERSION

2 change is the process by which the future invades our lives -> Alvin Toffler

3 first of all: what are YOUR concerns? (buzz groups)

4 what are YOUR biggest issues and fears you face in strategic management today?

5 where do YOU see the largest opportunities to improve strategic management today?

6 your expectations for today?

7 what is innovation?

8 tell me about the most important innovations in your company

9 types of innovation?

10 technology innovation

11 process innovation

12 product & service innovation

13 business model innovation

14 four levels of innovation business model innovation product & service innovation process innovation technology innovation

15 “Business model innovation matters” and it is a top priority of CEOs

16 Operating Margin Growth in Excess of Competitive Peers compound annual growth rate over five years [Source: IBM, CEOs are expanding the innovation horizon: important implications for CIOs]

17 Benefits Cited by Business Model Innovators percent of respondents [Source: IBM, Global CEO Study 2006]

18 why talk about business models?

19 how do you describe a business model?

20 without a common language

21 how do you communicate a business model?

22 Development plan Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci. Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem. Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat. Strategy Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper, risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felis pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec diam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod. Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor. Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibus vulputate. Proin dignissim eros at augue. Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulum condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae purus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque. Words Text 18% 300% 12% 1% through inappropriate means

23 how do you implement a business model?

24 with outdated methods

25 how do you measure the success of a business model?

26 we don’t

27 how do you change a business model and innovate?

28 we re-invent the wheel

29 what is a business model?

30 VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIPS CUSTOMER SEGMENTS ACTIVITY CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURECUSTOMEROFFER FINANCE a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams DISTRIBUTION CHANNELS [Osterwalder (2004) The Business Model Ontology] business model framework

31 case study

32 you become the new owner of a soccer club …

33 describe YOUR club’s business model

34 describing how a wealth management bank acquires its clients what value proposition do you offer, to which customer segments?

35 VALUE PROPOSITION CUSTOMER SEGMENTS value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMEROFFER what value proposition do you offer, to which customer segments? (model)

36 what value proposition do you offer, to which customer segments? (example) spectacular offensive football fans CUSTOMEROFFER advertising space & high visibility advertisers ……

37 how do you reach your customers?

38 VALUE PROPOSITION COMMUNICATION & DISTRIBUTION CHANNELS value proposition 1 value proposition 2 … channel 1 channel 2 … OFFER how do you reach your customers? (model) CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER

39 spectacular offensive football stadium & box office CUSTOMEROFFER how do you reach your customers? (example) club owned TV channel fans mobile phone TV advertising space & high visibility sales forceadvertisers

40 how do you build relationships?

41 VALUE PROPOSITION CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … mechanism 1 mechanism 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … CUSTOMER how do you build relationships with your customers? (model)

42 spectacular offensive football personalized website (ticketing) CUSTOMEROFFER team blog (RSS)fans … how do you build relationships with your customers? (example)

43 how do you earn your money with this business model?

44 VALUE PROPOSITION REVENUE STREAMS value proposition 1 value proposition 2 … revenue stream 1 revenue stream 2 … OFFER CUSTOMER SEGMENTS target customer 1 target customer 2 … FINANCE how do you earn your money with this business model? (model)

45 spectacular offensive football ticket sales FINANCEOFFER TV channel subscriber fees fans mobile phone TV subscriber fees advertising space & high visibility advertising revenuesadvertisers how do you earn your money with this business model? (example)

46 the big picture (business model)

47 team management event management venue management ticketing VIP relationship management video crew … attractive soccer 360º event (match, dining, shopping) exclusive VIP lounges merchandising renting out stadium … stadium POS networks club website (+online TV) club cable TV channel mobile phone TV channel … play attractive & win games brand management video images channel management fans (families, etc.) fan groups companies event/concert organizers advertisers … team & maintenance infrastructure management marketing video Ticket fees & season tickets online TV subscription revenues revenue sharing cable & mobile phone TV renting out stadium for events advertising revenues merchandising revenues food & beverages ticketing services promoters ad placement telecom operator TV operator … personalized web profile newsletter team blog (RSS) VIP events with team … Value PropositionDistribution ChannelTarget Customer Customer RelationshipPartner Network Activity ConfigurationCore Capability Cost StructureRevenue Model the big picture

48 team management event management venue management ticketing VIP relationship management video crew … attractive soccer 360º event (match, dining, shopping) exclusive VIP lounges merchandising renting out stadium … stadium POS networks club website (+online TV) club cable TV channel mobile phone TV channel … play attractive & win games brand management video images channel management fans (families, etc.) fan groups companies event/concert organizers advertisers … team & maintenance infrastructure management marketing video Ticket fees & season tickets online TV subscription revenues revenue sharing cable & mobile phone TV renting out stadium for events advertising revenues merchandising revenues food & beverages ticketing services promoters ad placement telecom operator TV operator … personalized web profile newsletter team blog (RSS) VIP events with team … Value PropositionDistribution ChannelTarget Customer Customer RelationshipPartner Network Activity ConfigurationCore Capability Cost StructureRevenue Model value creates revenues

49 team management event management venue management ticketing VIP relationship management video crew … attractive soccer 360º event (match, dining, shopping) exclusive VIP lounges merchandising renting out stadium … stadium POS networks club website (+online TV) club cable TV channel mobile phone TV channel … play attractive & win games brand management video images channel management fans (families, etc.) fan groups companies event/concert organizers advertisers … team & maintenance infrastructure management marketing video Ticket fees & season tickets online TV subscription revenues revenue sharing cable & mobile phone TV renting out stadium for events advertising revenues merchandising revenues food & beverages ticketing services promoters ad placement telecom operator TV operator … personalized web profile newsletter team blog (RSS) VIP events with team … Value PropositionDistribution ChannelTarget Customer Customer RelationshipPartner Network Activity ConfigurationCore Capability Cost StructureRevenue Model creating value requires infrastructure

50 team management event management venue management ticketing VIP relationship management video crew … attractive soccer 360º event (match, dining, shopping) exclusive VIP lounges merchandising renting out stadium … stadium POS networks club website (+online TV) club cable TV channel mobile phone TV channel … play attractive & win games brand management video images channel management fans (families, etc.) fan groups companies event/concert organizers advertisers … team & maintenance infrastructure management marketing video Ticket fees & season tickets online TV subscription revenues revenue sharing cable & mobile phone TV renting out stadium for events advertising revenues merchandising revenues food & beverages ticketing services promoters ad placement telecom operator TV operator … personalized web profile newsletter team blog (RSS) VIP events with team … Value PropositionDistribution ChannelTarget Customer Customer RelationshipPartner Network Activity ConfigurationCore Capability Cost StructureRevenue Model infrastructure generates costs

51 team management event management venue management ticketing VIP relationship management video crew … attractive soccer 360º event (match, dining, shopping) exclusive VIP lounges merchandising renting out stadium … stadium POS networks club website (+online TV) club cable TV channel mobile phone TV channel … play attractive & win games brand management video images channel management fans (families, etc.) fan groups companies event/concert organizers advertisers … team & maintenance infrastructure management marketing video Ticket fees & season tickets online TV subscription revenues revenue sharing cable & mobile phone TV renting out stadium for events advertising revenues merchandising revenues food & beverages ticketing services promoters ad placement telecom operator TV operator … personalized web profile newsletter team blog (RSS) VIP events with team … Value PropositionDistribution ChannelTarget Customer Customer RelationshipPartner Network Activity ConfigurationCore Capability Cost StructureRevenue Model the profit zone <

52 the process of designing a business model

53 the focus of the business modeler

54 user-centered

55 Nokia: Jan Chipchase

56 creativity & exploration

57 Googleplex

58 interdisciplinary approach

59 Grameen Phone Bangladesh

60 holistic design

61 Apple iTunes & iPod

62 strategic fit

63 Amazon.com

64 the business modeler’s toolbox

65 co-creation

66 ideation

67 visualization

68 prototyping

69 the design process

70 1. identify interdisciplinary stakeholders -> set-up team

71 2. understand business environment –> frame problem

72 3.suspend reality -> ideate

73 4.bring back reality -> prototype

74 5.chose suitable design -> decide

75 6.sketch out projects & workload -> draw implementation plan

76 7.outline key indicators to follow -> choose measures

77 8.select the right teams and people -> make responsible

78 9.execute the plan -> manage implementation & change

79 10.evaluate, learn and redesign -> manage improvement

80 examples

81 to come…

82 feedback for this draft ppt welcome!! alex@arvetica.com

83

84 Alexander Osterwalder, PhD alex@arvetica.com www.arvetica.com

85 all photos from Flickr under a creative commons license authors indicated in comment page of ppt

86 we co-create Nobody knows your business environment better than yourself. We co-design your strategic vision by building on your knowledge. Through group thinking we find the right answers to the right questions together we operationalize Having a great vision is not sufficient - implementation counts. We help you reconcile long term views with short term actions. We make strategy everyone's job by translating it into pragmatic and prioritized projects. we manage change Change does not happen accidentally it has to be managed. We help you align strategy, people and processes with respect to your organizational culture and values. we build knowledge When you stop learning, you stop competing. We scan the knowledge universe for you, across disciplines and industries. We transfer the best methods, tools and theory in business to your organization. we connect Specific problems require specific skills that you do not necessarily dispose of in-house. Through our interdisciplinary network we connect you with leading domain experts.

87 annexes

88 annex I business model template

89 VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS INFRASTRUCTURECUSTOMEROFFER FINANCE a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams

90 VALUE PROPOSITION COST STRUCTURE CUSTOMER RELATIONSHIP TARGET CUSTOMER DISTRIBUTION CHANNEL VALUE CONFIGURATION CORE CAPABILITIES PARTNER NETWORK REVENUE STREAMS gives an overall view of a company's bundle of products and services portrays the network of cooperative agreements with other companies describes the channels to communicate and get in touch with customers describes the arrangement of activities and resources explains the relationships a company establishes with its customers sums up the monetary consequences to run a business model describes the revenue streams through which money is earned describes the customers a company wants to offer value to outlines the capabilities required to run a company's business model INFRASTRUCTURECUSTOMER OFFER FINANCE describing a company’s business model

91 VALUE PROPOSITION value proposition 1 value proposition 2 … OFFER describing a company’s offer

92 VALUE PROPOSITION TARGET CUSTOMER value proposition 1 value proposition 2 … target customer 1 target customer 2 … CUSTOMEROFFER describing who a company offers value to

93 VALUE PROPOSITION TARGET CUSTOMER DISTRIBUTION CHANNEL value proposition 1 value proposition 2 … distribution channel 1 distribution channel 2 … target customer 1 target customer 2 … CUSTOMEROFFER describing how a company reaches its customers

94 VALUE PROPOSITION TARGET CUSTOMER RELATIONSHIP value proposition 1 value proposition 2 … relationship type 1 relationship type 2 … target customer 1 target customer 2 … CUSTOMEROFFER describing the relationships a company builds

95 TARGET CUSTOMER REVENUE STREAM revenue stream 1 revenue stream 2 … target customer 1 target customer 2 … FINANCE VALUE PROPOSITION value proposition 1 value proposition 2 … OFFERCUSTOMER describing how a company makes money

96 CORE CAPABILITIES VALUE PROPOSITION core capability 1 core capability 2 … value proposition 1 value proposition 2 … OFFERINFRASTRUCTURE describing what capabilities are required

97 describing what activities are required VALUE PROPOSITION VALUE CONFIGURATION CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … activity 1 activity 2 … INFRASTRUCTUREOFFER

98 describing the partners that leverage the business model VALUE PROPOSITION PARTNER NETWORK CORE CAPABILITIES value proposition 1 value proposition 2 … core capability 1 core capability 2 … partner 1 partner 2 … INFRASTRUCTUREOFFER

99 VALUE PROPOSITION COST STRUCTURE cost account 1 cost account 2 … value proposition 1 value proposition 2 … FINANCEINFRASTRUCTUREOFFER describing the costs of a business model CORE CAPABILITIES core capability 1 core capability 2 …

100 annex ii other

101


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