Business models midterm:
Chapter 1:
- Temporary competitve advantage: succes scan only be maintainted i fits roots are
continualy re-examined and nurtured
- 4 dimensions of overall model, magic traingle:
1. The customer
2. The value proposition
3. The value chain: how do we produce our offerings
4. Profit mechanism: why does it generate value?
- Who-what-how-value
- Who and what= external
- How and value= internal dimensions
- Bm innovation affects at least 2 of the 4 dimensions
- Goal bm: create and capture value
- Blue ocean strategy: you must leave the competitive red ocean and create a blue
ocean that is new, uncontested market space. Beat your competitors without trying
to beat them
- 3 challenges that make it difficult for companies to tackle the issue of BM innovation:
- 1. Thinking outside of ones own dominant industry logic: this is no simple matter as
mental blocks hamper the development of fresh ideas.
To come up with ideas for an innovative bm, it is essential to overcome the
dominant logic residing within an industry. New ideas can only be found beyond
the confines of current concepts.
2. Thinking in BM’s rather than in technologies or products: people prefer physical
technologies and products they can see and understand. Most find it difficult to
think of more abstract world of BM’s
3. Thinking without systematic tools: chaotic process and only creative geniuses can
bring truly revolutionary innovations in the market.
7 myths:
1. Initial ascent myth: success comes with ideas no one has ever had before.
New bm’s borrow from other industries so this is a myth.
, 2. The think big myth: bm innovations are always radical and new to the world.
It can be incremental.
3. The technology myth: every bm innovation is based on a new fascinating new
technology that inspires new products.new technologies drive new BM but
they are often generic in nature.
4. The luck myth: just matter of luck. It costs much hard work creating new BM.
It requires persistence and drive it is not luck.
5. The Einstein myth: only masterminds can come up with ideas. It’s a team
sport not a individual matter.
6. The size myth: big breakthrough requires big resources. Small startups are
responsible for the most important BM revolution
7. R&D myth: R&D are the source of important innovations. The change can
come from anywhere not just from R&D.
Chapter 2:
- TRIZ: theory of inventive problem solving= identification, amplification and
elimination of technical and physical contradiction in technical systems. Elementary
principles to solve technical problems: divide or segment, remove damaged parts,
use asymmetry, couple similar parts, employ countermeasures, boosts software.
- Creative imitation and the importance of recombination: 95% of all new businesses
are not actually new, they are based on 55+ existing patterns. Creatively imitating
BMs from other industries can empower your business to become and innovation
leader in your industry. Just remember that learning and understanding is more
important than pure copying.
- Subscription pattern: allows customers to pay a monthly or yearly fee to gain access
to a product or service. It can lead to radical innovation when introduced into new
contexts.
- Razor and blade: Gillette gave away free razor holders and sold matching blades with
high prices. In order to ensure that customers return to make purchases at the
original company, exit barriers such as patents or strong branding need to be
created.
- Strategies for new business model ideas:
1. Transfer: an existing business model is ported to a new industry. Most companies
use this strategy. Advantages: other companies serve as blueprints and their
mistakes can be avoided, enabling you to become an innovation leader in your
industry. Major challenge: leaving enough room for experimentation and
adaption. Here, avoid the temptation to copy and paste.
2. Combine: transfer and combine 2 business models. Especially innovative
companies can even use three business models simultaneously. Major
advantage: synergies decrease the likelihood that competitors will imitate your
BM. Major challenge: planning and execution become more complex.
3. Leverage: a company uses a successful BM for another product range. Only the
most innovative business can pull this off. Major advantages: ability to capitalise
on experiences and synergies: manageable risk. Major challenge: balancing
change and stability.
, - Navigator process: initiation, ideation, integration and implementation.
I Initiation: analysing the ecosystem
BM is complex network of relationships with constantly changing ecosystem of
your business. To meet challenges of BM innovation, you need to have indepth
understanding. Also the roles played by stakeholders and diverse influencing
factors.
BMs are often analysed in too much detail, caught up in the company’s daily
struggles. Thus, it’s a good idea to visualise examining the problem not from
ground level, but from 30 000 feet up.
We recommend describing your BM on the basis of the four core dimensions>
Who what how value.
How: key resources, key activities, value chain , partners, suppliers
Value: sources of income, main costs, main risks
Understanding the actors
- Customers, partners and competitors
Chapter 1:
- Temporary competitve advantage: succes scan only be maintainted i fits roots are
continualy re-examined and nurtured
- 4 dimensions of overall model, magic traingle:
1. The customer
2. The value proposition
3. The value chain: how do we produce our offerings
4. Profit mechanism: why does it generate value?
- Who-what-how-value
- Who and what= external
- How and value= internal dimensions
- Bm innovation affects at least 2 of the 4 dimensions
- Goal bm: create and capture value
- Blue ocean strategy: you must leave the competitive red ocean and create a blue
ocean that is new, uncontested market space. Beat your competitors without trying
to beat them
- 3 challenges that make it difficult for companies to tackle the issue of BM innovation:
- 1. Thinking outside of ones own dominant industry logic: this is no simple matter as
mental blocks hamper the development of fresh ideas.
To come up with ideas for an innovative bm, it is essential to overcome the
dominant logic residing within an industry. New ideas can only be found beyond
the confines of current concepts.
2. Thinking in BM’s rather than in technologies or products: people prefer physical
technologies and products they can see and understand. Most find it difficult to
think of more abstract world of BM’s
3. Thinking without systematic tools: chaotic process and only creative geniuses can
bring truly revolutionary innovations in the market.
7 myths:
1. Initial ascent myth: success comes with ideas no one has ever had before.
New bm’s borrow from other industries so this is a myth.
, 2. The think big myth: bm innovations are always radical and new to the world.
It can be incremental.
3. The technology myth: every bm innovation is based on a new fascinating new
technology that inspires new products.new technologies drive new BM but
they are often generic in nature.
4. The luck myth: just matter of luck. It costs much hard work creating new BM.
It requires persistence and drive it is not luck.
5. The Einstein myth: only masterminds can come up with ideas. It’s a team
sport not a individual matter.
6. The size myth: big breakthrough requires big resources. Small startups are
responsible for the most important BM revolution
7. R&D myth: R&D are the source of important innovations. The change can
come from anywhere not just from R&D.
Chapter 2:
- TRIZ: theory of inventive problem solving= identification, amplification and
elimination of technical and physical contradiction in technical systems. Elementary
principles to solve technical problems: divide or segment, remove damaged parts,
use asymmetry, couple similar parts, employ countermeasures, boosts software.
- Creative imitation and the importance of recombination: 95% of all new businesses
are not actually new, they are based on 55+ existing patterns. Creatively imitating
BMs from other industries can empower your business to become and innovation
leader in your industry. Just remember that learning and understanding is more
important than pure copying.
- Subscription pattern: allows customers to pay a monthly or yearly fee to gain access
to a product or service. It can lead to radical innovation when introduced into new
contexts.
- Razor and blade: Gillette gave away free razor holders and sold matching blades with
high prices. In order to ensure that customers return to make purchases at the
original company, exit barriers such as patents or strong branding need to be
created.
- Strategies for new business model ideas:
1. Transfer: an existing business model is ported to a new industry. Most companies
use this strategy. Advantages: other companies serve as blueprints and their
mistakes can be avoided, enabling you to become an innovation leader in your
industry. Major challenge: leaving enough room for experimentation and
adaption. Here, avoid the temptation to copy and paste.
2. Combine: transfer and combine 2 business models. Especially innovative
companies can even use three business models simultaneously. Major
advantage: synergies decrease the likelihood that competitors will imitate your
BM. Major challenge: planning and execution become more complex.
3. Leverage: a company uses a successful BM for another product range. Only the
most innovative business can pull this off. Major advantages: ability to capitalise
on experiences and synergies: manageable risk. Major challenge: balancing
change and stability.
, - Navigator process: initiation, ideation, integration and implementation.
I Initiation: analysing the ecosystem
BM is complex network of relationships with constantly changing ecosystem of
your business. To meet challenges of BM innovation, you need to have indepth
understanding. Also the roles played by stakeholders and diverse influencing
factors.
BMs are often analysed in too much detail, caught up in the company’s daily
struggles. Thus, it’s a good idea to visualise examining the problem not from
ground level, but from 30 000 feet up.
We recommend describing your BM on the basis of the four core dimensions>
Who what how value.
How: key resources, key activities, value chain , partners, suppliers
Value: sources of income, main costs, main risks
Understanding the actors
- Customers, partners and competitors
