17/1/2012 MEGA TRENDS 2020: ‘Shaping India’s Future’1 Mega Trend #: 2 New Business Models in...

117/1/2012 MEGA TRENDS 2020: ‘Shaping India’s Future’

Mega Trend #: 2New Business Models in the Age of

Distributed Capitalism

• Prof. Shailendra Raj Mehta• IIM-Ahmedabad and Duke CE

MEGA TRENDS 2020: ‘Shaping India’s Future’

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Business Models are Important• Often a new technology or market needs a new business model• There are lead markets

– High tech for the US– Miniaturization for Japan– Low cost innovation including bottom of the pyramid in India

• Google and Apple succeeded because they created Technology + Business Model (Search + Adwords) (iPod + iTunes)

• US universities prospered by changing the business model – Alumni control

• “As against a 60 million job creation in the period 1999-2000 to 2004-05, just about a million jobs were created in 2004-05 to 2009-10.” (Rangarajan, Kaul et al. 2001).

• Important in Entrepreneurship and New Job creation.17/1/2012


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Innovative Business Models – Johnson 2010Affinity club MBNABrokerage Century 21, OrbitzBundling Fast-food value meals, iPod/ iTunesCell Phone Sprint, Better PlaceCrowdsourcing Wikipedia, You TubeDisintermediation Dell, WebMDFractionalization Time-sharing condos, Net JetsFreemium Skype, Linkedin, PandoraLeasing Xerox, Luxury cars, Machinery LinkLow-touch Southwest, Wal-mart, XiameterNegative operating cycle AmazonPay-as-you-go PG&E, metered ISPsRazors/ blades Gillette, personal printersReverse auction Elance.com, OnForce.comReverse razors / blades iPod/iTunes, Amazon KindleProduct-to-service IBM, Hilti, ZipcarStandardization Minute ClinicSubscription club Magazines, Costco, NetflixUser communities Angle’s List

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Business Model Definition

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Customer Value Proposition Profit Formula Key Resources Key Processes

Target Customer Revenue Model People Routines

Job to be Done Cost Structure TechnologyRules and Metrics

Offering Margin Model Equipment Norms

Resource Velocity Information

Channels

Partnerships

Brand

From Johnson, Christensen et.al. HBR 2008


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Indian Business Models

• Bottom of the Pyramid – C.K. Prahalad• But also “frugal engineering” or “Gandhian

engineering”• India is the lead market for Bottom of the

Pyramid Innovation• Want to look at what has happened in the last

10 years• Link up to

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12 Models – Direct Fit with Rifkin – Distributed Information and Energy

• Government– Aadhar– Aakash

• Indian Companies– Forus Healthcare– Ekgaon– Mahindra Reva– Tata Nano– Chotukool– Microfinance– Global Delivery Model– E-choupal

• Social Sector– 108 Emergency

• MNCs– e-Shakti

• Others– 21 other models (33 in

all)

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Government Sector

• Aakash Tablet– Create community learning solutions– 40,000 print materials by IGNOU, 1600 videos (free)– IITs and IISc. http://nptel.iitm.ac.in/ – MIT open course ware

• Aadhar Card– Clear Trip– ATM machines– Limited only by our imagination

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http://nptel.iitm.ac.in/

http://nptel.iitm.ac.in/


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Ekgaon

• customized farming recommendations

• based on local weather, crop and soil conditions using text and voice,

• delivered to the most basic and cheap cellphones that dot the rural countryside.

• Cloud computing• Rs 250 a year• 12,000 paying

subscribers

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Reva – Electric Car

• Created by the Maini Group• Taken over by Mahindra and Mahindra• Today, Mahindra Reva has one of the largest

deployed fleets of electric cars in the global market and the accumulated data from more than 100 million km of user experience.

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Forus Healthcare

• The large number of blind people who have what may be called “avoidable blindness” on account of a neglect of cataracts, glaucoma, refraction problems, corneal problems and diabetic retinas.

• Forus has created a “a single, portable, intelligent, noninvasive, eye prescreening device”

• tests for all five of these conditions and if any anomalies are found connects the patient to a doctor via telemedicine.

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Formula• One visionary• Low cost highly skilled talent• Simple, affordable, bundled technology, complete or customized

solution using technology• Low cost distribution using low cost sales force• Combination of high tech and low tech management• Large volumes, low prices• Scale up fast while remaining very close to the customer• Appeal to the impulse to make a difference (CSR)• Good stakeholder management• Key Question – How will these new business models mix and

match to create new value in the future?

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17/1/2012 MEGA TRENDS 2020: ‘Shaping India’s Future’1 Mega Trend #: 2 New Business Models in...

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