The Business Model Canvas, Toolbox or Comic? Dr Gaston TRAUFFLER Brussels, February 11 th, 2015

Transcription

1 The Business Model Canvas, Toolbox or Comic? Dr Gaston TRAUFFLER Brussels, February 11 th, 2015

2 There are two basic ways to tackle a problem West China Hospital, Chengdu: Considered as the biggest hospital on earth 4800 beds 3.5million patients treated in

3 Do more of the same or Do differently 3

4 What is a business model? Strategic Goals A business model describes the rationale of how an organization creates, delivers, and captures value. Operations 4

5 King of Ice Frederick Tudor Ice harvesting in New England around 1800 New England Ice trade

6 Transformation of industries and business models K employees $31 billion market capitalization K employees Bankrupt: sold for $525 millions 2012 Start of project Burbn photography for mobile devices 13 employees Sold for $1 billion 6

7 Generating a business model in 9 building blocks (I) 1. Customer segments, An organization serves one or several customer segments. 2. Value proposition, It seeks to solve customer problems and satisfy customer needs with value propositions. 3. Channels, Value propositions are delivered to customers through communication, distribution, and sales channels. 4. Customer Relationships, Customer relationships are established and maintained with each customer segment. 7

8 Generating a business model in 9 building blocks (II) 5. Revenue Streams, Revenue streams result from value propositions successfully offered to customers. 6. Key Resources, Key resources are the assets required to offer and deliver the previously described elements Key Activities... by performing a number of key activities. 8. Key Partnerships, Some activities are outsourced and some resources are acquired outside the enterprise. 9. Cost Structure, The business model elements result in the cost structure. 8

9 The BM Canvas a Diagram of flows between the company and its customers 2. Value proposition 7. Key activities 4. Customer relationships 8. Key partners 1. Customer segments 9. Cost structure 6. Key Resources 3. Channels 5. Revenue streams 9

10 Example: Business Model of Google (I) Key partners Key activities Value proposition relationships segments Google profile Search and Find Key resources Channels Cost structure Revenue streams 10

11 Example: Business Model of Google (II) Double sided Business Model Key partners Key activities Value proposition relationships segments Google profile maintenance Search and Find Key resources Channels Algorithms Cost structure Revenue streams costs 11

12 Does it work? Google s full year revenue for 2014 was $66 billion, up 19% year on year and this quarter, our revenue was $18.1 billion, despite strong currency headwinds. December 31,

13 1. CUSTOMER SEGMENTS Which customers and users are you serving? Which jobs do they really want to get done? 13

14 2. VALUE PROPOSITIONS What are you offering customers? What products and services create value for a specific customer segment? 14

15 3. CHANNELS How does each customer segment want to be reached? Through which interaction points can you communicate with them? Communication, distribution, and sales channels comprise a company's interface with customers. 15

16 4. CUSTOMER RELATIONSHIPS What relationships are you establishing with each segment? Personal? automated? acquisitive? retentive? How to acquire, to keep and grow customer? 16

17 5. REVENUE STREAMS What are customers really willing to pay for? how? Are you generating transactional or recurring revenues? 17

18 6. KEY RESOURCES Which resources underpin your business model? which assets are essential? 18

19 7. KEY ACTIVITIES Which activities do you need to perform well in your business model? What is crucial? 19

20 8. KEY PARTNERS Which partners and suppliers leverage your model? Who do you need to rely on? 20

21 9. COST STRUCTURE What is the resulting cost structure? Which key elements drive your costs? 21

22 Overview 7. Key activities 2. Value proposition 4. Customer relationships 8. Key partners 1. Customer segments 9. Cost structure 6. Key Resources 3. Channels 5. Revenue streams 22

23 2 23

24 A thoughleader, this man? 24

25 and a successful manager? Name Age Estimated net worth* Ranking: Wealthiest person in the world* Ingvar Kamprad, IKEA 88 US $50.7 billion 5th Larry Page, Google Inc. 41 US $26.2 billion 20th Michael Dell, Dell Inc. 49 US $14.8 billion 59th 25 *source: Bloomberg Billionaires July 2013

26 Facts & Figures 2013 Net Profit: 70 million up to 516millon 15.7% to 2013 Revenue: 28.5 billion, up 7.5% to 2013 New products Developed 2,000+ new products Opened 10 new stores 4.2% sales growth in existing stores 26 Source IKEA: 2014

27 IKEA 27

28 Business Model: Furniture shop Getting others do the job Key partners Key activities Value proposition relationships segments Advertisment TV & Radio Rapid Production Solid furniture Key resources Sales force in the shops Build after order Channels Cost structure Revenue streams 28

29 Business Model: IKEA Getting others do the job Key partners Key activities Value proposition relationships segments IKEA Family Advertisment Card TV & Radio Production & Packaging Rapid Production Solid furniture Key resources Sales force in the shops Build after order Channels Construction area for the IKEA shop Cost structure Revenue streams 29

30 Is the canvas really all we need? Where is company culture? Where are competitors? Where are the processes? Where is the organization? Where are objectives? 31

31 Steve Jobs : «1000 songs in my pocket» 2001 Introduction of original ipod by Steve Jobs. 32

32 Business Model: Apple ipod Creating switching Costs Key partners Key activities Value proposition relationships segments ipod 1000 songs in a pocket Key resources Channels Cost structure Revenue streams 33

33 Business Model: Apple ipod Creating recurring business Key partners Key activities Value proposition relationships segments ipod 1000 songs in a pocket Key resources Channels Itunes software store Cost structure Revenue streams 34

34 Dell 35

35 Business Model: traditional PC manufacturer Key partners Key activities Value proposition relationships segments PCs Key resources Channels retail Cost structure Revenue streams 36

36 Business Model: traditional PC manufacturer Time gap between spending and earning Key partners Key activities Value proposition relationships segments PCs Key resources Channels retail Spending long before earning Cost structure Revenue streams Inventory depreciation 37

37 Business Model: Dell Key partners Key activities Value proposition relationships segments Supply chain management excellence Key resources Channels Cost structure Revenue streams 38

38 Business Model: Dell Earn before spending Key partners Key activities Value proposition relationships segments Supply chain management excellence Key resources Channels Spending and earning very close Cost structure Revenue streams Inventory depreciation 39

39 Nesspresso 40

40 Business Model: Nesspresso Transformed a transactional business into a recurring business Key partners Key activities Value proposition relationships segments Acquire and Acquire and locck-in locck-in Nesspresso manufacturer Key resources retail Channels Cost structure Revenue streams 41

41 Skype 42

42 Business Model: Telecom Companies Game changing cost structures Key partners Key activities Value proposition relationships segments calls Key resources Channels Cost structure Revenue streams 43

43 Business Model: Telecom Companies Major investments and high running costs Key partners Key activities Value proposition relationships segments calls Key resources Channels Offering calls require a network Itunes software store Cost structure Revenue streams 44

44 Business Model: Skype Game changing cost structures Key partners Key activities Value proposition relationships Global market segments Free (video) calls Skype requires no network Key resources Channels Cost structure Revenue streams 45

45 Business Model: Skype Key partners Key activities Value proposition relationships Global market segments Free (video) calls Skype requires no network Key resources Channels Cost structure Revenue streams Software & IP requires lower capital expenditures 46

46 Business Model: Skype Key partners Key activities Value proposition relationships segments Free Skype to Skype (video) calls Key resources Channels Cost structure Revenue streams Subsidise free calls 47

47 Business Modell Innovation: a two step approach 1. Business Model Generation 2. Business Model Innovation, testing, iterating 48

48 Exercise Build three a business model around this constains you have 9 minutes Key partners Key activities Value proposition relationships segments Key resources Channels Bicycle Cost structure Revenue streams 49

49 7 Questions of a good Business Model (BM) 1. Switching costs : how easy is it for my customer to move to a competitor. Example: apple itunes 2. Recurring revenues. Transform a transactional business into a recurring business Example: Nesspresso 3. Earning money before spending it. Example: Dell 4. Change the game of the cost structures from the one of the competitors. Example: Skype, Airtel outsourced network infrastrucutre, and payed variable costs to providers of the network 5. Getting others to do the work. Example: facebook the biggest value created in Facebook is not done by users. Facebook only provides the plattform, same for amazon s getting review. IKEA: transport and assembly by the customer 6. Is the BM scalabale. Example: Credit cards, online stock brokering, banking, auctions, e-commerce retail stores. 7. Protection from competition: how much does your overall BM design protect you from competitors. 50

50 Contact Dr Gaston TRAUFFLER Head of Department Start-up Creation & SME Performance LUXINNOVATION GIE > 7, rue Alcide de Gasperi > L-1615 Luxembourg T (+352) > gaston.trauffler@luxinnovation.lu 51