BUSINESS MODELS. ENGR 1060/2060, Fall 2013 Week 7 Dr. Alexander Dale

Transcription

1 BUSINESS MODELS ENGR 1060/2060, Fall 2013 Week 7 Dr. Alexander Dale

2 ADMINISTRATIVE First group deliverable due Friday (Oct. 11 th ) at 6pm - Sector, Clients, Business Model, Impact Metrics (<4 pages) Template available! 4 th Paper due next Friday (Oct. 18 th ) at 6pm - Applying the canvas to environmental problems

3 COMPARISON Income Taxes? Individual Profits? Expandable? Membership? Flexibility Corporation Yes, Corp. Yes Yes Not without IPO High LLC/Partners Co-Op Non-Profit Foundation Yes, Individ. Yes Limited Limited High Yes, Corp. Shared Yes Yes! High No No Yes Varies Good No No Limited No Low

4 BASICS OF A VENTURE Purpose - Mission, Vision Based on community needs Incorporate existing knowledge about system Easily communicated Approach - strategies/tactics Selling products? Providing services? Selling access to something? Educating people? Operating/administering something Financials Where will revenue come from? Where will revenue be spent? Who will benefit from any profit? How flexible are your finances? Management Who makes business decisions? How are leaders selected? How many paid staff? How much turnover? How to balance growth/ exiting

5 BUSINESS MODELS What makes up a business? Osterwalder s definition: How an organization creates, delivers, and captures value Creation - resources and supply chain Delivery - customers and channels Capture - revenues vs. costs

6 OSTERWALDER S CANVAS Osterwalder, A. et al. (2010). Canvas and Patterns, in Business Model Generation. Hoboken, New Jersey: Wiley Press

7 OSTERWALDER S CANVAS Osterwalder, A. et al. (2010). Canvas and Patterns, in Business Model Generation. Hoboken, New Jersey: Wiley Press

8 OSTERWALDER S CANVAS What are the limitations on applying this framework to social businesses? To non-profits? Which segments do you think see the most innovation? The least?

9 BUSINESS MODEL CASE STUDY Big Belly Solar Founded in 2003 to reduce fossil fuel consumption Mission: Displace fossil fuel usage through renewable energy Increase recycling rates and create the mechanism for self-funding new recycling programs Reduce litter and associated public health concerns Create a messaging platform to engage users and influence more environmentally-conscious behaviors. Remote monitored solar powered trash compactor

10 BIGBELLY SOLAR Aim to reduce costs from waste collection, thus reducing associated fuel and labor costs Remote monitored solar powered trash compactor Cost $3000-$4000 per unit or lease $70- $90/month Payback within two to four years based on savings from reduced man hours, fuel, and garbage trucks.

11 BIGBELLY SOLAR Osterwalder, A. et al. (2010). Canvas and Patterns, in Business Model Generation. Hoboken, New Jersey: Wiley Press

12 BIGBELLY SOLAR Municipalities Facilities Management Monitored trash compaction 24/7/365 in any region Software to manage levels Receptacles Manufacturing Sales/Marketing People R&D Reduce usage of fossil fuels and lower costs of waste management Automated service through software Municipalities BigBelly Solar Website Direct sales Leasing Niche Market with higher purchases per customer Osterwalder, A. et al. (2010). Canvas and Patterns, in Business Model Generation. Hoboken, New Jersey: Wiley Press

13 BIGBELLY SOLAR Collection frequency reduction from 5-7x a week to approximately 2x a week Capital payback in the vicinity of 3-4 years 10 year cost savings of over $2,000, Tons of C02 emissions saved annually 19,400-19,600 gallons of fuel saved annually Weekly Collection Frequency Current System With BigBelly

14 VALUE PROPOSITION What do you offer over your competitors? Examples: Newness Customization Brand Service Accessibility Performance Design Price Cost/risk reduction Convenience Lower Impacts Social Values

15 VALUE PROPOSITION What brands are your favorite? Why? Clif Bar Cares about ingredients Tastes good, even when smashed Independent 1% for the Planet member

16 VALUE PROPOSITION [Name of organization] provides [products/ services], which are [statement of key differentiators], for [target beneficiaries], and thereby creates [statement of social value/ impact], unlike [competition].

17 VALUE PROPOSITION Engineers for a Sustainable World provides project support, sustianability education, and community events, which are tangible, career-focused, and discipline-agnostic, for technical students and professionals, and thereby creates improves local sustainability and creates context-conscious professionals. ESW is distinct in its local focus, educational programs, and chapter autonomy.

18 VALUE PROPOSITION [Name of organization] provides [products/ services], which are [statement of key differentiators], for [target beneficiaries], and thereby creates [statement of social value/ impact], unlike [competition].

19 PROJECT TIME! What do your canvases look like?