Business Model Generation

Transcription

1 Business Model Generation What is Business Model Generation? Alexander Osterwalder & Yves Pigneur have written the book Business Model Generation, which gives you strong, simple and proven tools to understand, re-design and implement business models. The book is a practical and inspirational guide for anyone who wants to improve their business or develop a new one. The book and tools are for entrepreneurs, game changers and pioneers who are striving to defy outdated business models and design tomorrow's businesses. The book is a result of input from 470 business Model Canvas practitioners from 45 different countries. Business model generation is for those who are trying to find innovative ways of doing business to replace old, outdated ones, to create value. Quite simple, innovation of business models is about creating value - for companies, for customers and for society. Innovation of business models is not a new phenomenon. When the founders of Diners Club in 1950 introduced the credit card, it was business model innovation. The same happened when Xerox as they launched a leasing photocopiers. Now we see innovative business models in an unprecedented turn and pace. Michael Porters Five Forces Managers who have studied at universities or business Schools are familiar with Michael Porter's Five Forces, which were introduced in the early 1980s. This business model provides an overview of the competitive situation and opportunities. The model uncovers how attractive it is to be in the industry, or to enter the industry. If the company is already in the industry this business model helps clarifying how strong a position the company has. Porter's Five Forces identifies five critical external factors that affect strategy in any industry. Threat of new entrants (also known as barriers to entry) Threat of substitutes Rivalry Bargaining power of suppliers Bargaining power of buyers Porter's Five Forces model is still used by many companies, but is more suited in a stable market and does not match the speed in which technology and customer behavior are currently changing. 1

2 Blue Ocean Strategy After Porters Five Forces two professors W. Chan Kim and Renée Mauborgne from the business school INSEAD introduced the Blue Ocean Strategy in The goal is to create uncontested market space and make the competition irrelevant. It is about a developing a proactive strategy designed to create value for customers and increase customers willingness-to-pay. The book Blue Ocean Strategy has now sold over 3.5 million copies, been translated into a record-breaking 44 languages, and is a bestseller across five continents, making it one of the most successful business books of all time. Gamechanger companies New innovative companies will enter the market in untraditional ways and challenge the large existing companies because they offer products that replace former needs or target an audience that have not been served before. Gamechangers are disruptive and innovative. They think and act differently. They collaborate with customers and partner up with other businesses, connecting ideas and utilizing their capabilities. Apple, Google, Airbnb, Uber, Alibaba, Red Bull and Nespresso are all good examples of companies, which have explored new avenues, where no one had gone before. They all put the customer and the customer's needs in focus and not only what the company is already good at. The customers have easy access to information to search for the right solution and they are not necessarily loyal to a specific service or provider, if they can solve their need better elsewhere. In effort to do something new and different, the nine elements of the Business Model Canvas Model have been important strategic management - and entrepreneurial tools. The model allows you to describe, design, challenge, invent, and pivot your business model. Business model generation is based on the business model of Business Model Canvas, which is built around a visual diagram that describes a company's or product's value creation, infrastructure, customers and economy. Business model generation provides you with practical innovative techniques used by leading global companies. The model provides you with a systematic understanding of how your business model looks and how it can be re-designed. It provides a thorough insight into what business models are and describes traditional and completely new models, as well as their dynamics, innovation techniques and how to position businesses in a highly competitive market. 2

3 Here is a 2 minutes video, which illustrates the nine blocks in the business model. New innovative business models and companies are evolving and it is very popular to talk about disruptive innovation, sharing economy and game-changers. There is constant focus on start-up companies, entrepreneurs and contractors which takes market share from established companies by covering new needs of the customers. How do you work with Business Model Generation How do you manage to create a business that differentiates itself and avoids the existing competition? How do you challenge and transform the old and outdated models? How do you transform the visionary ideas to unconventional groundbreaking business models? Business model generation illustrates the basic elements of a business model quickly, simple and in a visual format. Some of the tools are taken from the design industry, where designers work without compromise to create the new, discover the unexplored or discover new functional applications. A designer aims to expand the imagination limits, create new opportunities and eventually end up creating value for the customers. It requires that you have the ability to imagine what does not exist yet. 3

4 Many business leaders are already practicing design and design thinking every day without knowing it. They design organizational charts, strategies, business models, processes and projects. They also have to include elements such as competitors, technology and legal requirements / limitations. In order to discover the "new big thing", it requires that they also work in an unknown and unexplored territory. The six design techniques to create new business models are: Customer insights Ideation creation Visual Thinking Prototypes Storytelling Scenarios Companies invest a lot of money in market research, but often they miss the emotional behavior of the customer for choosing a given product or service when they subsequently develop products, services and business models. Successful innovation is about understanding customers, their environment, daily routine, problems and dreams. One of the fundamentals of Business Model Generation is how to come up with new ideas for the business model. One of the challenges is to ignore the status quo and override concerns about the operational issues. New business models is about challenging the standard for designing original models which covers new or hidden customer needs. What if questions? It can be difficult to create innovative business models because we are held back in our thinking by the status quo and our comfort zone which states that we know what we have, but we do not know where the "new thing" will bring us. One way to overcome the problem is to challenge conventional assumptions with what if questions. It helps us break free of constraints imposed by current models and provoke us and challenge our thinking. IKEA, SKYPE, and ROLLS-ROYCE are classic examples of how to change the condition of an industry: IKEA by delivering components in flat pack form from large warehouses, where the buyers have to assemble the product themselves in their homes. SKYPE by launching a service that allowed free calls over the internet and ROLLS-ROYCE offering engine with payment for every hour the engine runs instead of selling them. Innovation of business models rarely come by chance. But it is not only for creative geniuses such as Steve Jobs and Elon Musk. It should be structured in processes and with action groups working with innovation. 4

5 Quite simple you can split the Business Model Generation process up in three phases Examine and understand Develop prototype business models Implement the business model GERBUS Academy - Executive Education Programs GERBUS Academy provides business innovation Programs targeted at executives and topmanagers across Europe, who wants to learn more about business model innovation and innovation driven growth. The GERBUS Gamechangers Germany executive program enables the participants to develop the right strategy, smarter innovation and winning business, applied to their industry and their company. It is fast, detailed, facilitated and practical, applied to the best opportunities to help the participant s own business innovate and grow, and for them to lead and create their better future. The Gamechangers Germany Program is a 2 module (of each 2 days) with Prof. Peter Fisk, taking place in Hamburg. Peter Fisk is professor at IE Business School and best-selling-author. He features on the Thinkers 50 Guru Radar as one of the world s top business experts and was described by Business Strategy Journal as one of the best new business thinkers. Back to New Insights For content requires: Kommunikation & Design: GERBUS Academy sternklar GmbH T: T: E: kontakt@gerbus-academy.com E: info@sternklar.com 5