Multi-stakeholder Business Model Innovation: making the pie bigger
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1 Multi-stakeholder Business Model Innovation: making the pie bigger March 11th, 2013
2 Traditional business models are replaced by more complex situations with multiple stakeholders 2
3 Business model innovation: relevant areas the operation costs the offering the go to market revenues 3
4 Offering the offeri ng Products Solutions Services Repeating experience, enhancing the solution Flexible composition of standard components based on a platform, validated with and accepted by the customer Stable product, created and well tested inside factory. Broad catalogue of products to cover market segments 4
5 Operation the operation Services Solutions Products Service fulfillment (development, engineering, execution, maintenance) Partners in the ecosystem create new propositions Component development and Solution engineering Partnerships expand to address specific market needs. Product devt&ops are all under control of own organization Partnerships to optimize the efficiency of the devt&ops 5
6 Go to market the go to market Services Solutions Products Referral / Creative distinctive sales Partners add new propositions Consultative selling Partnerships in solution building from design up to realization Sales Partnerships for creating more market channels expanding the market, increasing sales effort, distribution and logistics 6
7 Stakeholder network: Philips as component supplier Philips only offering quotation for final design: No influence on design Competition on price/quality 7
8 The rules of each business game are different 8
9 Product business PRODUCTS BENEFITS Margin oriented - action is reaction: Cost as well as revenues are (or need to become) highly predictable Optimization of the whole flow creation, logistics, sales HOW TO WIN All focus on creating more volume (=more sales) Not by definition best consumer benefit Price / quality ratio is key Competition is fierce: easy comparison based Price / quality ratio Branding, regional aspects requiring diversity to tackle.. CHALLENGE Time to Market Best Price / quality ratio Market channels / branding 9
10 Solution Business SOLUTIONS PRODUCTS BENEFITS Project oriented - earn while learning: Knowledge build up at customer Solution defined with customer HOW TO WIN All focus on translating customer whishes in a solution Timing and speed Solution fit / price ratio is key Competition is complex solution fit / price ratio is not easy comparable Smart component platforms and knowledge build up CHALLENGE Consultative selling Building knowledge Expanding market channels through knowledge partners 10
11 Service Business SERVICES SOLUTIONS PRODUCTS BENEFITS Opportunity based, creative and distinctive seed and harvest: Not limited to own contribution anymore Once eco system works, enormous boost of underlying solution/components. HOW TO WIN Provide a solid solution / components to build service on (open up interface) Allow for creative and distinctive contributions CHALLENGE Provide open solutions / components Provide the structure for an eco system (online store, ) Allow for an community to develop (hire opinion leaders) 11
12 HOW TO MAKE THE PIE BIGGER
13 1. Redefine your proposition Question yourself and go beyond customer expectations! Realize that your product is not the center of gravity but provides a function to your customers that they want to pay money for! Think beyond the features of your product, and question yourself whether these features can be realized in a different way 13
14 2. Picture the ecosystem Realize your product is potentially part of a bigger need; analyze this ecosystem and picture the stakeholders Redefine; product, solution or service offering based on that 14
15 3. Picture the business model Question yourself how you will deliver your product to the markets Question yourself who will be the partners that will build your solutions together with you. Who will be in control? 15
16 4. Picture the business case Question yourself where the money will come from and where it will go, investments, partnership deals, EBIT Create scenarios 1
17 The pie will grow, layer by layer SERVICES SOLUTIONS PRODUCTS 17
18 Contact data Mariëlle Meuffels : m.e.h.meuffels@philips.com Rob Jaartsveld : rob.jaartsveld@philips.com Philips Innovation Services - Industry Consulting : industry.consulting@philips.com
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