Business Model Design and Analysis. Antero Juntunen

Transcription

1 Business Model Design and Analysis Antero Juntunen

2 Structure of the presentation Theoretical framework for analyzing and designing business models: STOF Model & Method Practical application of the STOF Model: the NFC Mobile Ticketing case 2

3 STOF Model STOF: Service, Technology, Organization, Finance A framework for analyzing business models Source: Bouwman et al.,

4 STOF Model Gives a holistic view of the business model of a service One problematic detail may be enough to cause an otherwise functional service to fail STOF Model can help in identifying the key points which could cause a service to fail Identifying these points early makes it easier and cheaper to fix any problems Source: Bouwman et al.,

5 Service Domain: Important design variables Value proposition Customer, End User, Market Segment Context Pricing Effort (ease of use) Bundling Source: Bouwman et al.,

6 Service Domain Source: Bouwman et al.,

7 Critical Design Issues: Service Domain Critical Design Issue Description Balance of requirements Targeting Creating value elements Branding Customer retention How to define the target group? How to create value for the targeted users of the service? How to promote/brand the service? How to stimulate recurrent usage of service? Generic vs. niche service B2C vs. B2B service Technological possibilities vs. user needs and wishes Operator vs. content brand Customer lock-in vs. customer annoyance Source: Bouwman et al.,

8 Technology Domain: Important design variables Technical Architecture Applications Devices Service Platforms Backbone Infrastructure Access Networks Data Technical Functionality Source: Bouwman et al.,

9 Technology Domain Source: Bouwman et al.,

10 Critical Design Issues: Technology Domain Critical Design Issue Description Balance of requirements Security Quality of service System integration Accessibility for customers Management of user profiles How to arrange secure access and communication? How to provide for the desired level of quality? How to integrate new services with existing systems? How to realize technical accessibility to the service for the target group? How to manage and maintain user profiles? Ease of use vs. abuse and privacy Quality vs. costs Flexibility vs. costs Open vs. closed system User involvement vs. automatic generation Source: Bouwman et al.,

11 Organization Domain: Important design variables Actors Roles Value Network Interactions and Relations Strategies and Goals Resources and Capabilities Value Activities Organizational Arrangements Source: Bouwman et al.,

12 Organization Domain Source: Bouwman et al.,

13 Critical Design Issues: Organization Domain Critical Design Issue Description Strategic Interests Partner Selection Network openness Network governance Network complexity How are partners selected? Who is allowed to join the value network? How is the value network orchestrated? Who is the dominant actor? How to manage increasing number of relations with actors in a value network? Access to critical resources and capabilities Desired exclusiveness, control, and customer reach of service Customer ownership and control over capabilities and resources Controllability of value network and access to resources and capabilities Source: Bouwman et al.,

14 Finance Domain: Important design variables Revenues and Revenue Sources Costs and Cost Sources Performance Indicators Capital and Investment Sources Risks and Risk Sources Financial Arrangements Pricing Source: Bouwman et al.,

15 Finance Domain Source: Bouwman et al.,

16 Critical Design Issues: Finance Domain Critical Design Issue Description Strategic Interests Pricing Division of investments Valuation of contributions and benefits Division of costs and revenues How to price the service for end users and customers? How to divide the investments among business partners? How to measure and quantify partners contributions and (intangible) benefits? How to divide the costs and revenues among business partners? Realize network profitability, realize market share Match individual partners profitability and risk Fair division of costs and revenues Balance between individual partners profitability and network profitability Source: Bouwman et al.,

17 Critical Success Factors: Customer Value Clearly Defined Target Group Compelling Value Proposition Unobtrusive Customer Retention Acceptable Quality of Service Source: Bouwman et al.,

18 CDIs & CSFs relating to customer value Source: Bouwman et al.,

19 Critical Success Factors: Network Value Acceptable Profitability Acceptable Risks Sustainable Network Strategy Acceptable Division of Roles Source: Bouwman et al.,

20 CDIs & CSFs relating to network value Source: Bouwman et al.,

21 STOF Method A step-by-step approach to designing business models for services Source: Bouwman et al.,

22 Dynamic Business Model Framework Business models are not static, but they have to be changed over time Source: Bouwman et al.,

23 STOF Model in practice: NFC Mobile Ticketing One example of using the STOF Model in practice The STOF Model can and should be adapted to the needs of a particular case For example, CSFs and CDIs can be tailored to the specific service 23

24 NFC Mobile Ticketing: General Information Near Field Communication is a RFID-based short-range communication technology NFC Mobile Ticketing simplified is bringing the travel card into the mobile phone Many pilots worldwide, but very limited commercial rollouts NFC in mobile phones has numerous uses Unclear business model a big reason behind the lack of NFC handsets on the market 24

25 Usage example: NFC Mobile Ticketing

26 NFC Mobile Ticketing: Service domain NFC mobile ticketing brings concrete benefits to end users Adopting the service should be easy The service should be at least as easy to use as travel cards Users should be able to choose from multiple payment options Customer service should be arranged in a clear way for the user 26

27 NFC Mobile Ticketing: Technology domain NFC compatible with ISO Lack of NFC handsets is a symptom of other issues Public has a negative perception of the security and privacy with NFC handsets UICC ( SIM card ) currently the choice for secure element Many solutions for designing UIs 27

28 NFC Mobile Ticketing: Organization domain 28

29 NFC Mobile Ticketing: Organization domain MNOs have multiple roles in the value network Banks needed for payment solutions Friction between banks and MNOs Public Transport Operators can reduce their costs Handset manufacturers balance between banks and MNOs Uncertainties with the Trusted Service Manager role 29

30 NFC Mobile Ticketing: Finance domain MNOs make the biggest investments No transaction fees for MNOs MNOs may charge rent for applications residing on the UICC Hard numbers needed for effective evaluation of NFC services 30

31 Drivers for Mobile Ticketing Intuitive touch-based interaction Real value for customers Compatibility with the legacy ticketing infrastructure Reduced costs in ticketing for PTOs 31

32 Restraints for Mobile Ticketing Usability may be an issue with the software Users have negative perceptions of the security and privacy of NFC and RFID Uncertainties in the value network Limited availability of handsets 32

33 Further information Course T Network Services Business Models in spring 2010 examines the topic in more detail Lecturing researcher Sakari Luukkainen Course book Mobile Service Innovation and Business Models (Bouwman et al., 2008, available online via Nelliportaali: MyiLibrary) 33