Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map
Why the Balanced Scorecard is Good but Not Great: The BUSINESS MODEL STRATEGY MAP
63
Business Model Strategy Map for Apple’s iPod DELIGHT: Revenue Streams (R$) iPod Hardware iTunes Commissions Key Partners (KP) Record companies Original Equipment Manufacturers Channels (CH) & Customer RelaBonships (CR) Apple.com; Big Box Retailer iTunes Store; Retail stores Online/FacetoFace; Lockin VALUE: PROFIT High Profit Margin Extraordinary Profit Performance Metrics Value ProposiBon (VP) “A Thousand Songs in Your Pocket” Seamless Music XP iPod Hardware Key AcBviBes (KA) Luxury Spot Strategy Hardware/SoTware Design MarkeUng & Sales Key Resources (KR) Staff/Employees Brand/Culture IP Infrastructure: IT Customer Segments (CS) Luxury SpoXer: Listen to music everywhere Customer Habit Engine PAIN: Cost Structure (C$) Staff/Employees Manufacturing/Infra’ MarkeUng & Sales MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different” Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com ) which is licensed under the CreaBve Commons ANributeShare Alike 3.0 Unported License
-
Upload
rod-king-phd -
Category
Business
-
view
3.477 -
download
0
Transcript of Why the Balanced Scorecard is Good but Not Great: The BUSINESS MODEL STRATEGY MAP
Business Model Strategy Map for Apple’s iPod
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
Key Partners (KP) q Record companies q Original Equipment
Manufacturers
Channels (CH) & Customer RelaBonships (CR) q Apple.com; Big Box Retailer q iTunes Store; Retail stores q Online/Face-‐to-‐Face; Lock-‐in
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
Value ProposiBon (VP) q “A Thousand Songs in Your
Pocket” q Seamless Music XP q iPod Hardware
Key AcBviBes (KA) q Luxury Spot Strategy q Hardware/SoTware Design q MarkeUng & Sales
Key Resources (KR) q Staff/Employees q Brand/Culture q IP q Infrastructure: IT
Customer Segments (CS) q Luxury SpoXer: Listen to music everywhere q Customer Habit Engine
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
MISSION/VISION/PURPOSE: Why does the organizaMon exist?
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
How does the organizaUon make money (profit) and/or share value (happiness)?
How does the organizaUon engage, acquire, and retain customers?
How does the organizaUon create, improve, or innovate on a product/strategy/business model?
MISSION/VISION/PURPOSE: Why does the organizaMon exist?
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
How does the organizaUon make money (profit) and/or share value (happiness)?
How does the organizaUon engage, acquire, and retain customers?
How does the organizaUon create, improve, or innovate on a product/strategy/business model?
Enterprise Hypotheses Growth Hypotheses Value Hypotheses
A New Look At
The Balanced Scorecard
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
Why the BALANCED SCORECARD is Good But Not Great
STRUCTURE The Balanced Scorecard (BSC) is frequently presented as a chain or sequence of 4 boxes – “perspecUves” – of a business (system). The 4 boxes (perspecUves) of a BSC relate to only 4 blocks of a business model.
The 4 perspecUves of a BSC deal with performance management of the 3 models or engines of a business model: q Provider (Supply) Model or Enter-‐
prise Engine for creaMng value q Customer (Demand) Model or
Growth Engine for delivering value q Performance (Profit) Model or
Value Engine for sharing value However, channels are ignored.
THE BALANCED SCORECARD
Source: h"ps://balancedscorecard.org/Resources/Abou"heBalancedScorecard/tabid/55/Default.aspx A Balanced Scorecard is good as a Business Scorecard and Checklist as well as Performance Management Dashboard for transla>ng a business’s vision, goals, objec>ves, and strategy into reality but …
LINKAGES (FUNCTIONAL ANALYSIS) The Balanced Scorecard (BSC) does not focus on showing micro-‐cause-‐and-‐effect relaUonships in a business. That funcUon is taken up by the complemen-‐tary tool of Kaplan and Norton’s Strategy Map which is also limited to 4 corresponding perspecUves.
Consequently, the BSC is not a detailed network (funcUonal analysis) diagram that illustrates exchange of resources between boxes or perspecUves.
Also, techniques such as Premortem (Failure Analysis) and Hypothesis GeneraUon cannot be simply carried out using the Balanced Scorecard.
LOGIC (PREDICTIVE CAPABILITY) A Balanced Scorecard (BSC) can be considered as a “surrogate” or parBal visualizaBon of a business model: it shows minimal cause-‐and-‐effect relaUonships between the 4 perspecUves. The BSC does not adequately describe a business model as the BSC does not show the macro-‐logic of how an organizaUon creates, delivers, and captures or shares value (profit). Consequently, the BSC is of limited use for Business Model Performance Management and PredicUon especially at the macro-‐level. Although in theory the BSC can be applied to non-‐profit organizaUon, its focus is on achieving financial objecUves.
“Good” vs “Great” BALANCED SCORECARD REQUIREMENTS (TASKS/FUNCTIONS) FOR BUSINESS MODEL PLANNING, STRATEGY, PERFORMANCE MANAGEMENT, AND GAMIFICATION
“Good” Balanced Scorecard
“Great” Balanced Scorecard
1) Can be carried in pocket/wallet: ultra-‐portability; modularity ü 2) Visualize archetypal parts or elements of a business model (system): Business Model Outline (Form/Checklist/TreeMap)
ü ü 3) Organize and manage ideas regarding the parts or elements of a business model (system): Business Model Scorecard
ü ü 4) Illustrate the 3 macro-‐modules or engines of a business model: Provider (Supply) Model; Customer (Demand) Model; Value (Performance/Profit) Model: MulBlevel (Aggregate) Analysis
ü
5) Comprehensively show cause-‐and-‐effect relaUonships that illustrate how a business model works to deliver value: Business Model Strategy Map; FuncBonal Analysis Diagram
ü
6) Illustrate Problem-‐SoluUon Fit & Product-‐Market Fit: Lean Startup method; Engine of Growth
ü 7) Facilitate generaUon and management of business model hypotheses as well as strategy: Business Model Strategy
ü ü 8) Facilitate Premortem (Failure Analysis): Root-‐cause Analysis ü 9) Facilitate problem solving, innovaUon, and performance mngt as well as Outcome-‐driven Planning, including Discovery-‐driven Planning: Universal Project Management (UPM) Dashboard
ü
10) Can be deployed as a boardgame with “naUve” game pieces (cards) & board: Business Model Jigsaw (BMJ) Game
ü
(3/10) (10/10)
“Good”
A Balanced Scorecard (BSC) Uses
4 PerspecBves To Organize and Manage InformaUon
on The Performance of a Business Model:
q Financial PerspecUve q Customer PerspecUve q Processes PerspecUve q Learning & Growth PerspecUve
TradiBonal Balanced Scorecard (BSC) Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
Source: h"ps://balancedscorecard.org/Resources/Abou"heBalancedScorecard/tabid/55/Default.aspx
Learning & Growth
Customer
Processes
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Balanced Scorecard (BSC) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
Finance
Topics in brown color are from descripUons of “boxes” or perspecUves of the Balanced Scorecard
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Learning & Growth
Customer
Processes
Finance
Topics in brown color are from descripUons of “boxes” or perspecUves of the Balanced Scorecard
Balanced Scorecard (BSC) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Learning & Growth
Customer
Processes
impact(s) deliver(s)
Balanced Scorecard (BSC) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
Finance
Topics in brown color are from descripUons of “boxes” or perspecUves of the Balanced Scorecard
A Balanced Scorecard (BSC) Is
A Minimum Viable Product (MVP) Of
A Business Model Strategy Map
“Great”
Business Model Strategy Map
For a Comprehensive Project, Four Sets of
Business Model (BM) Strategy Maps Should be Completed in the Categories of
M.O.S.T.:
q M: Mission (Vision/Goal/Leap of Faith) q O: Outcome q S: Strategy (Hypotheses) q T: Targets (Hypotheses)
Note For startups or startup projects, it is advisable to prepare Analog & AnBlog-‐Business Model Strategy Maps before compleUng M.O.S.T.-‐Business Model Strategy Maps
A Business Model (BM) Strategy Map Is Designed to Facilitate 3 “Jobs-‐To-‐Get-‐Done”:
Translate into reality an OrganizaBon’s Mission, Vision, Purpose, Goal and/or Strategy Document and improve the performance of any organizaUon
Visualize or document the 3 engines of a business model (system) as well as prototype and test the hypotheses of its 9 parts, “strategy blocks” or perspecBves
1
2
3
A Business Model (BM) Strategy Map Uses
3 “Engine Maps” For Organizing and Managing InformaUon
About The Performance of a Business Model: q Value Engine (VE) Map q Growth Engine (GE) Map q Enterprise Engine (EE) Map
3 QuesBons for The Business Model Strategy Map
Value Engine Map: How do we capture or share value (wealth; profit; learning; happiness)?
Growth Engine Map: How do we deliver value?
Enterprise Engine Map: How do we create value?
VE
GE
EE
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
Visualize, Prototype, and Test A Business Model
In Terms of 9 Strategy Blocks
Key Partners (KP) Value ProposiBon (VP) PAIN: Cost Structure (C$)
Key Resources (KR) Channels (CH) & Customer RelaBonships (CR)
DELIGHT: Revenue Streams (R$)
Key AcBviBes (KA) Customer Segments (CS) VALUE: PROFIT
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Upstream Midstream Downstream
Blank Gameboard for Business Model Strategy Map
Key Partners (KP)
Key Resources (KR)
Channels (CH) & Customer RelaBonships (CR)
Customer Segments (CS)
Value ProposiBon (VP)
Key AcBviBes (KA)
DELIGHT: Revenue Streams (R$)
PAIN: Cost Structure (C$)
VALUE: PROFIT
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Key Partners (KP)
Key Resources (KR)
Channels (CH) & Customer RelaBonships (CR)
Customer Segments (CS)
Value ProposiBon (VP)
Key AcBviBes (KA)
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
DELIGHT: Revenue Streams (R$)
PAIN: Cost Structure (C$)
VALUE: PROFIT
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Key Partners (KP)
Key Resources (KR)
Channels (CH) & Customer RelaBonships (CR)
Customer Segments (CS)
Value ProposiBon (VP)
Key AcBviBes (KA)
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
drive(s)
DELIGHT: Revenue Streams (R$)
PAIN: Cost Structure (C$)
VALUE: PROFIT
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Key Partners (KP)
Key Resources (KR) Learning & Growth
Channels (CH) & Customer RelaBonships (CR)
Customer Segments (CS) Customer
Value ProposiBon (VP)
Key AcBviBes (KA) Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
drive(s)
DELIGHT: Revenue Streams (R$)
PAIN: Cost Structure (C$)
VALUE: PROFIT Finance
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Key Partners (KP) Strategy
Key Resources (KR) Strategy: Learning & Growth
Channels (CH) & Customer RelaBonships (CR) Strategy
Customer Segments (CS) Strategy: Customer
Value ProposiBon (VP) Strategy
Key AcBviBes (KA) Strategy: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
drive(s)
DELIGHT: Revenue Streams (R$) Strategy
PAIN: Cost Structure (C$) Strategy
VALUE: PROFIT Strategy: Finance
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Key Partners (KP) Targets
Key Resources (KR) Targets: Learning & Growth
Channels (CH) & Customer RelaBonships (CR) Targets
Customer Segments (CS) Targets: Customer
Value ProposiBon (VP) Targets
Key AcBviBes (KA) Targets: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Targets
PAIN: Cost Structure (C$) Targets
VALUE: PROFIT Targets: Finance
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Key Partners (KP) Targets
Key Resources (KR) Targets
Channels (CH) & Customer RelaBonships (CR) Targets
Customer Segments (CS) Targets
Value ProposiBon (VP) Targets
Key AcBviBes (KA) Targets
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Targets
PAIN: Cost Structure (C$) Targets
VALUE: PROFIT Targets
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Key Partners (KP) Hypotheses
Key Resources (KR) Hypotheses
Channels (CH) & Customer RelaBonships (CR) Hypotheses
Customer Segments (CS) Hypotheses
Value ProposiBon (VP) Hypotheses
Key AcBviBes (KA) Hypotheses
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Hypotheses
PAIN: Cost Structure (C$) Hypotheses
VALUE: PROFIT Hypotheses
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Key Partners (KP) Obstacles
Key Resources (KR) Obstacles
Channels (CH) & Customer RelaBonships (CR) Obstacles
Customer Segments (CS) Obstacles
Value ProposiBon (VP) Obstacles
Key AcBviBes (KA) Obstacles
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Obstacles
PAIN: Cost Structure (C$) Obstacles
VALUE: PROFIT Obstacles
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Key Partners (KP) IniBaBves
Key Resources (KR) IniBaBves
Channels (CH) & Customer RelaBonships (CR) IniBaBves
Customer Segments (CS) IniBaBves
Value ProposiBon (VP) IniBaBves
Key AcBviBes (KA) IniBaBves
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) IniBaBves
PAIN: Cost Structure (C$) IniBaBves
VALUE: PROFIT IniBaBves
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Key Partners (KP) IniBaBves: Suppliers/Inputs
Key Resources (KR) IniBaBves: Employees/Team Machinery/Infrastructure
Channels (CH) & Customer RelaBonships (CR) IniBaBves: Retailers/Distributors
Customer Segments (CS) IniBaBves: Customer Archetype
Value ProposiBon (VP) IniBaBves: Ouptut -‐ Product/Service
Key AcBviBes (KA) IniBaBves: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) IniBaBves
PAIN: Cost Structure (C$) IniBaBves
VALUE: PROFIT IniBaBves: Shared Value (Strategy)
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Example
4 Business Model Engine (BME) QuesBons How Does the OrganizaMon Work?
q MISSION (M) QuesUon: Why does the organizaUon exist?
q VALUE ENGINE (VE) QuesUon: How does the organizaUon make money (profit) and/or share value (happiness)?
q GROWTH ENGINE(GE) QuesUon: How does the organizaUon
engage, acquire, and retain customers?
q ENTERPRISE ENGINE (EE) QuesUon: How does the organizaUon create, improve, or innovate on
a product/strategy/business model?
4 Business Model Engine (BME) QuesBons How Does the OrganizaMon Work?
Business Model Strategy Map
QuesBon
MISSION (M)
Why does the organizaUon exist?
VALUE ENGINE (VE)
How does the organizaUon make money (profit) and/or share value (happiness)?
GROWTH ENGINE (GE)
How does the organizaUon engage, acquire, and retain customers?
ENTERPRISE ENGINE (EE)
How does the organizaUon create, improve, or innovate on a product/strategy/business model?
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
MISSION/VISION/PURPOSE: Why does the organizaMon exist?
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
How does the organizaUon make money (profit) and/or share value (happiness)?
How does the organizaUon engage, acquire, and retain customers?
How does the organizaUon create, improve, or innovate on a product/strategy/business model?
MISSION/VISION/PURPOSE: Why does the organizaMon exist?
Business Model (BM) Strategy Map Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
0
123
How does the organizaUon make money (profit) and/or share value (happiness)?
How does the organizaUon engage, acquire, and retain customers?
How does the organizaUon create, improve, or innovate on a product/strategy/business model?
Enterprise Hypotheses Growth Hypotheses Value Hypotheses
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
Channels (CH) & Customer RelaBonships (CR) q Apple.com; Big Box Retailer q iTunes Store; Retail stores q Online/Face-‐to-‐Face; Lock-‐in
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
Value ProposiBon (VP) q “A Thousand Songs in Your
Pocket” q Seamless Music XP q iPod Hardware
Customer Segments (CS) q Luxury SpoXer: Listen to music everywhere q Customer Habit Engine
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
Key Partners (KP) q Record companies q Original Equipment
Manufacturers
Channels (CH) & Customer RelaBonships (CR) q Apple.com; Big Box Retailer q iTunes Store; Retail stores q Online/Face-‐to-‐Face; Lock-‐in
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
Value ProposiBon (VP) q “A Thousand Songs in Your
Pocket” q Seamless Music XP q iPod Hardware
Key AcBviBes (KA) q Luxury Spot Strategy q Hardware/SoTware Design q MarkeUng & Sales
Key Resources (KR) q Staff/Employees q Brand/Culture q IP q Infrastructure: IT
Customer Segments (CS) q Luxury SpoXer: Listen to music everywhere q Customer Habit Engine
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) q Record companies q Original Equipment
Manufacturers
Channels (CH) & Customer RelaBonships (CR) q Apple.com; Big Box Retailer q iTunes Store; Retail stores q Online/Face-‐to-‐Face; Lock-‐in
Value ProposiBon (VP) q “A Thousand Songs in Your
Pocket” q Seamless Music XP q iPod Hardware
Key AcBviBes (KA) q Luxury Spot Strategy q Hardware/SoTware Design q MarkeUng & Sales
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
Key Resources (KR) q Staff/Employees q Brand/Culture q IP q Infrastructure: IT
Customer Segments (CS) q Luxury SpoXer: Listen to music everywhere q Customer Habit Engine
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
Key Partners (KP) q Record companies q Original Equipment
Manufacturers
Channels (CH) & Customer RelaBonships (CR) q Apple.com; Big Box Retailer q iTunes Store; Retail stores q Online/Face-‐to-‐Face; Lock-‐in
Value ProposiBon (VP) q “A Thousand Songs in Your
Pocket” q Seamless Music XP q iPod Hardware
Key AcBviBes (KA) q Luxury Spot Strategy q Hardware/SoTware Design q MarkeUng & Sales
VALUE: PROFIT q High Profit Margin q Extraordinary Profit q Performance Metrics
Key Resources (KR) q Staff/Employees q Brand/Culture q IP q Infrastructure: IT
Customer Segments (CS) q Luxury SpoXer: Listen to music everywhere q Customer Habit Engine
PAIN: Cost Structure (C$) q Staff/Employees q Manufacturing/Infra’ q MarkeUng & Sales
DELIGHT: Revenue Streams (R$) q iPod Hardware q iTunes q Commissions
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) Strategy
Key Resources (KR) Strategy: Learning & Growth
Channels (CH) & Customer RelaBonships (CR) Strategy
Customer Segments (CS) Strategy: Customer
Value ProposiBon (VP) Strategy
Key AcBviBes (KA) Strategy: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Strategy
PAIN: Cost Structure (C$) Strategy
VALUE: PROFIT Strategy: Finance
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) Targets
Key Resources (KR) Targets: Learning & Growth
Channels (CH) & Customer RelaBonships (CR) Targets
Customer Segments (CS) Targets: Customer
Value ProposiBon (VP) Targets
Key AcBviBes (KA) Targets: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Targets
PAIN: Cost Structure (C$) Targets
VALUE: PROFIT Targets: Finance
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) Targets
Key Resources (KR) Targets
Channels (CH) & Customer RelaBonships (CR) Targets
Customer Segments (CS) Targets
Value ProposiBon (VP) Targets
Key AcBviBes (KA) Targets
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Targets
PAIN: Cost Structure (C$) Targets
VALUE: PROFIT Targets
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) Hypotheses
Key Resources (KR) Hypotheses
Channels (CH) & Customer RelaBonships (CR) Hypotheses
Customer Segments (CS) Hypotheses
Value ProposiBon (VP) Hypotheses
Key AcBviBes (KA) Hypotheses
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) Hypotheses
PAIN: Cost Structure (C$) Hypotheses
VALUE: PROFIT Hypotheses
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) IniBaBves
Key Resources (KR) IniBaBves
Channels (CH) & Customer RelaBonships (CR) IniBaBves
Customer Segments (CS) IniBaBves
Value ProposiBon (VP) IniBaBves
Key AcBviBes (KA) IniBaBves
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) IniBaBves
PAIN: Cost Structure (C$) IniBaBves
VALUE: PROFIT IniBaBves
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
Key Partners (KP) IniBaBves: Suppliers/Inputs
Key Resources (KR) IniBaBves: Employees/Team Machinery/Infrastructure
Channels (CH) & Customer RelaBonships (CR) IniBaBves: Retailers/Distributors
Customer Segments (CS) IniBaBves: Customer Archetype
Value ProposiBon (VP) IniBaBves: Ouptut -‐ Product/Service
Key AcBviBes (KA) IniBaBves: Processes
(Problem
-‐SoluU
on Fit; Produ
ct-‐M
arket F
it)
impact(s) affect(s)
impact(s) deliver(s)
impact(s)
impact(s)
affects
affect(s)
affect(s)
impacts
drive(s)
DELIGHT: Revenue Streams (R$) IniBaBves
PAIN: Cost Structure (C$) IniBaBves
Topics with AbbreviaUons are adopted from the Business Model Canvas (hNp://www.businessmodelgeneraBon.com) which is licensed under the CreaBve Commons ANribute-‐Share Alike 3.0 Un-‐ported License
Business Model Strategy Map for Apple’s iPod Rapidly Visualize, Prototype, and Test the 3 Engines of a Business Model
MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
VALUE: PROFIT IniBaBves: Shared Value (Strategy)
ENVIRONMENT
Business Model Environment Map for Apple’s iPod MISSION/VISION/PURPOSE: “Put a Dent in the Universe”/Create Insanely Great Customer Experience/“Think Different”
How to Use the Business Model Strategy Map
1. Plot the Gameboard of the Business Model Strategy Map on a Poster, e.g., 3k x 5k
2. Place the Poster on a Table
3. Lay Out – Especially Using Index Cards, Blank Business Cards, or Post-‐Its – the Business Model Strategy Map In Terms of the 3 Engine Maps:
q Value Engine (VE) Map q Growth Engine (GE) Map q Enterprise Engine (EE) Map As well as 9 Strategy Blocks
Mission/Vision/Purpose: ……………………………… Value Engine Growth Engine Enterprise Engine
Materials for Gameboard of Business Model Strategy Map (Non-‐magneUc/MagneUc/StaUc)
AlternaBve Forms of Cards for Business Model Strategy Map (Non-‐magneUc/MagneUc/StaUc)
“Startups also have a true north, a desBnaBon in mind:
creaBng a thriving and world-‐changing business. I call it a startup’s vision.
To achieve that vision, startups employ a strategy [Business Model Environment Map],
which includes q a business model, q a product road map, q a point of view about partners and compeBtors, and q ideas about who the customers will be.”
Eric Ries in his book, “The Lean Startup”
Business Model Environment Map A Gameboard for
ConBnuous InnovaBon Under CondiBons of Great Uncertainty
ENVIRONMENT
Business Model Environment Map MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
ENVIRONMENT
Business Model Environment Map MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
ENTERPRISE ENGINE: Build
GROWTH ENGINE: Measure
VALUE ENGINE: Learn
Value Crea>on: Upstream
Value Sharing (Happiness): Downstream
Value Delivery: Midstream
Bargaining Pow
er of Sup
pliers
Bargaining Pow
er of C
ustomers
Threat of New Entrants
Threat of SubsBtute Products or Services
Business Model Environment Map: Local Industry Factors MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Value Crea>on: Upstream
Value Sharing (Happiness): Downstream
Value Delivery: Midstream
ENTERPRISE ENGINE: Build
GROWTH ENGINE: Measure
VALUE ENGINE: Learn
Indu
stry Ecosystem
(IE): Sup
ply
Market E
cosystem
(ME): D
eman
d
Key Trends & Complementors (KTC): PESTLIED (-‐/+)
Macro-‐Economic Influencers (MEI): Global Economy
Business Model Environment Map: Global Environmental Factors MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
Value Crea>on: Upstream
Value Sharing (Happiness): Downstream
Value Delivery: Midstream
ENTERPRISE ENGINE: Build
GROWTH ENGINE: Measure
VALUE ENGINE: Learn
S: Stren
gths
O: O
pportuniBe
s
W: Weaknesses
T: Threats
Business Model Environment Map: “SWOT” Factors
Value Crea>on: Upstream
Value Sharing (Happiness): Downstream
Value Delivery: Midstream
MISSION/VISION/PURPOSE: ………………………………………………………………………………………………………………………………………
ENTERPRISE ENGINE: Build
GROWTH ENGINE: Measure
VALUE ENGINE: Learn
#4ROD. Dr. Rod King. [email protected] & hNp://businessmodels.ning.com & hNp://twiNer.com/RodKuhnKing
