Describe and Improve Your Business Model 1193048778204895 2

© Arvetica

How to Describe and Improveyour Business ModelOpeninnovation, Dublin, 24 Oct 2007

© Arvetica, September 2007

© Arvetica

photos are from flickr under a « creative commons » license - authors are referenced in the comment section

© Arvetica

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

IBM Global CEO Survey

© Arvetica

How Do We Describe Business Models Today?

© Arvetica

Going to War without a Map…

Karl von Clausewitz (~1800)

© Arvetica

Here

CEOs10°

Managers60°

Here

Staff360°

Ok

Insufficiently Well

© Arvetica

The Result

© Arvetica

Could it Be Different?

© Arvetica

It Exists in Business Process Modeling

© Arvetica

A Management Toolbox for Business Model Design and Innovation

© Arvetica

A Template to Describe Business Models

42’941 downloads

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Describe a Business Model: 9 Building Blocks

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS

COMPETENCIES, ACTIVITIES,

RESOURCES


RESOURCES

PARTNER NETWORKPARTNER NETWORK

REVENUEFLOWS

REVENUEFLOWS

DISTRIBUTION CHANNELS


KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Example: Bizner Bank

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES


REVENUEFLOWS

REVENUEFLOWS

entrepreneursentrepreneurs

automatized relationship

automatized relationship

BizBallance (integrated banking

and accounting)

BizBallance (integrated banking

and accounting)

monthly feemonthly fee

ReeleezeeReeleezee

IT infra mgmt account mgmt,

transactions, etc.

IT infra mgmt account mgmt,

transactions, etc.

IT infrastructure, marketing,

partnership costs

IT infrastructure, marketing,

partnership costs


DISTRIBUTION CHANNELSWebWeb

KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE

IT, accounting, banking

IT, accounting, banking

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Xerox 914 Business Model

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES


REVENUEFLOWS

REVENUEFLOWS



KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE

large companies

large companies

transactionaltransactional

sales teamsales team

1 time sales fee

1 time sales fee

photocopiersphotocopiersR&D manufacturing

R&D manufacturing

regularregular

large companies

large companies

lease high-end photocopiers

lease high-end photocopiers

sales teamssales teams

lease & 4ct per copy (2k+)

lease & 4ct per copy (2k+)

financing & billing

financing & billing

© Arvetica

REVENUESREVENUESCOSTSCOSTS

KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE ACTIVITIESACTIVITIES

PARTNERSPARTNERS RELATIONSRELATIONS

OFFEROFFER CLIENTSCLIENTSCHANNELSCHANNELS

total remanufacturing solutions of high end IT platforms

total remanufacturing solutions of high end IT platforms

manufacturingmanufacturing

long term deep

integration

long term deep

integration

brand manufacturers

customers base

brand manufacturers

customers base


IT brand manufacturer

s

IT brand manufacturer

s

sales commission

sales commission

re-marketingre-marketing

inventory management

inventory management

systems knowledgesystems

knowledge

manage secondary

supply chain

manage secondary

supply chain

reverse logisticsreverse logistics


inventoryinventory

« sales » team

« sales » team

brand manufacturers of high end IT

platforms

brand manufacturers of high end IT

platforms

flat feeflat fee

Multis Example

© Arvetica

The Process

© Arvetica

find a way to play poker to unlock these models

Prof Henry Chesbrough, Berkeley

“”

© Arvetica

5 Steps to Business Model Design & Renewal

→ describe

existing business model

→ assess

strengths and weaknesses

→ brainstorm on

improvements & opportunities

→ turn new model

into a project roadmap

11 22 4433VISUALIZEVISUALIZE ASSESSASSESS RENEWRENEW PLANPLAN 55 IMPLEMENTIMPLEMENT

→ implement

project roadmap

© Arvetica

Visualize

© Arvetica

Visualizing

© Arvetica

Visualizing Amazon.com

© Arvetica


KEY ISSUES TO SOLVE




selling stuffon the Webselling stuffon the Web

IT infraIT infra

automatized relationshipsautomatized relationships

mass customer

mass customer

data servicesdata services

Amazon.com data grid


partnerspartners

selling stuffselling stuff

Amazon.comAmazon.com

warehousing & distributionwarehousing & distribution

distributiondistribution

content management

content management

product selectionproduct

selection

product search

product search

marketingmarketing

affiliatesaffiliates

© Arvetica

Assess, Design & Renew

© Arvetica

good ideas are widely distributed, nobody has a monopoly on innovation

Prof Henry Chesbrough, Berkeley

“

”

© Arvetica

Assessing Amazon.com

• where are some of Amazon.com‘s highest costs located?

• what are some of Amazon.com‘s core competencies?

• how could they leverage these competencies?

• how could they leverage investments?

© Arvetica


KEY ISSUES TO SOLVE





IT infraIT infra


mass customer

mass customer




partnerspartners



warehousing & distributionwarehousing & distribution


content management

content management


selection

product search

product search

marketingmarketing


© Arvetica

Leveraging IT at Amazon.com

© Arvetica


KEY ISSUES TO SOLVE





IT infraIT infra


mass customer

mass customer




partnerspartners


Amazon S3Amazon S3


Internet APIInternet API

Web2.0 companiesWeb2.0

companieswarehousing & distributionwarehousing & distribution


content management

content management


selection

A9 product search

A9 product search

data storage fees

data storage fees

product search

product search

search engine revenues

search engine revenues

e-commerce sites

e-commerce sites

InternetInternet

marketingmarketing


© Arvetica

Changing the Business Model: Examples

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Building on Existing Customer Relationships:Walmart Clinics

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES


REVENUEFLOWS

REVENUEFLOWS



KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE shoppersshoppers

frequent relationshipfrequent

relationship

WalmartClinics

WalmartClinics

health serviceshealth services

medical knowledge and staff

medical knowledge and staff

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Changing the Game:Cirque de Soleil

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES


REVENUEFLOWS

REVENUEFLOWS



KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE

theater & opera visiitors

theater & opera visiitors

artistic circus without lions

artistic circus without lions

stage & manage spectacle &

logistics

stage & manage spectacle &

logistics

create art & atmospherecreate art & atmosphere

higher ticket prices

higher ticket prices

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Demand-Creating Alliances:Intel Processor Platform

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES


REVENUEFLOWS

REVENUEFLOWS



KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE end usersend usersspeedy

processorsspeedy

processors

partners with ever “heavier” applications

partners with ever “heavier” applications

© Arvetica

CLIENTSCLIENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

CLIENTSEGMENTS

Introducing a Family Office Service through a Partnership

OFFEROFFER

COST STRUCTURE

COST STRUCTURE

CLIENTRELATIONSHIPS

CLIENTRELATIONSHIPS

CLIENTSEGMENTS

CLIENTSEGMENTS


RESOURCES


RESOURCES

REVENUEFLOWS

REVENUEFLOWS



KEY ISSUES TO SOLVE

KEY ISSUES TO SOLVE

affluent clients (100k-1+mio)

affluent clients (100k-1+mio)

tight personal relationships

tight personal relationships

branches & bankers

branches & bankers

local private banking

local private banking

mainly product revenues

mainly product revenues

ultra high net worth individuals

ultra high net worth individuals

family office services


revenue sharing agreement

revenue sharing agreement

local branch of family office

local branch of family office

tight relationships with UHNWI

tight relationships with UHNWI

PARTNER NETWORKPARTNER NETWORKPARTNER NETWORKPARTNER NETWORK

independent multi-family

office

independent multi-family

office

© Arvetica

OFFEROFFER

CLIENT RELATIONSHIPS

CLIENT RELATIONSHIPS

CLIENT SEGMENTCLIENT

SEGMENT

ACTIVITIESACTIVITIES

PARTNERPARTNER

REVNUE STREAMSREVNUE

STREAMS

ACQUISITION CHANNELS

ACQUISITION CHANNELS

Project Roadmap



UHNWI relationships

UHNWI relationships

UHNWIUHNWI

client trust, internal cooperation

client trust, internal cooperation

mutli-family office partner

mutli-family office partner

revenue sharingrevenue sharing

relationship managers & new

office

relationship managers & new

office

design collaboration processdesign collaboration process

training programtraining program develop marketing materialdevelop marketing material

internal concept presentationinternal concept presentation

generate prioritized prospect listgenerate prioritized prospect list

work out client presentationwork out client presentation

establish acquisition learning processestablish acquisition learning process

relationship manager collaboration processrelationship manager collaboration process

team set-upteam set-up

client reception areaclient reception area

profit center set-upprofit center set-up

set-up CRM toolset-up CRM tool

© Arvetica

business people don’t just need to understand designers

better; they need to become designers

Roger Martin, Dean Rotman School

“

”

© Arvetica

Alexander Osterwalder

Before joining Arvetica Alex founded Business Model Design, a consulting boutique

specialized in business model innovation. Besides consulting the private sector he was also

involved in building up a globally active NGO based in Thailand in the field of knowledge

management, HIV/AIDS and malaria. Prior to consulting, Alex worked at the University of

Lausanne, as an entrepreneur in the banking sector and as an online journalist for the major

Swiss business magazine BILANZ. He holds a PhD and Masters degree of the HEC Business

School of the University of Lausanne, Switzerland. Alex is an active member of the IMD based

Open World Initiative (OWI).

© Arvetica

offer customer segment

revenue stream

distribution channel

waste water treatment system

Canadian mining sites

one time sales fee

sales force

© Arvetica

sell waste water treatment system


one time sales fee

sales forcetotal waste water

treatment management


recurring service fee

sales force

© Arvetica

sell waste water treatment system


one time sales fee

sales forcecore activitiescore capabilities

costs

partner network client relationship

build treatment systems

water treatment knowledge

production costs

suppliers follow-up

© Arvetica

build treatment systems

water treatment

knowledge

production costs

suppliers follow-up

total waste water treatment

management


recurring service fee

sales forcedispatch repair teams

error free systems

development

call center

variable costs of repair services

Describe and Improve Your Business Model 1193048778204895 2

Documents

Transcript of Describe and Improve Your Business Model 1193048778204895 2