Business model & strategy New Business Development Class # 8 2017
Course agenda The Business Plan Framework Sustainable Competitive Advantage Delta Model Blue ocean The Strategic Profile 2
Structure of a Business Plan A BP is composed of several sections that relate and allow a global understanding of the business in a few pages. Executive summary (synthesis, write at the end) Company and Team Products and services description Market and Competition Strategic analysis Marketing and sales Financial plan 3
The Business Model Canvas Osterwalder & Pigneur 4
Cost leadership Porter s Generic Strategies Simple products and services Design for lower cost products and processes Scale economy Use of learning curve Cost leadership Broad market Niche market Differentiation Quality, Name, Brand Customer orientation Performance, design Patents, innovation Distribution system Comprehensive line Differentiation Niches, segments, regions, products or specialized services 5
Value Disciplines (Treacy and Wieserman 1995) Operational excellence Low price, competitive High reliability Basic service without adding unnecessary costs Customer intimacy Customized products and services Expert Advice "Customs made" solutions Product leadership Superior performance Dominant design Emotional impact Status in consumption 6
Delta Model: options for strategic management System lock-in Dominant Exchange ebay, Yellow Pages Submarino Proprietary Standard Microsoft, Intel Horizontal Breadth Fidelity, Bradesco, Mag. Luíza Total customer solutions Customer integration (defined relationship) Saturn, TAM (1990s), Pão de Açucar Especial Viability Through the Effective use gives technology Low cost Southwest Airlines, Nucor, Gol, CVRD Casas Bahia Best product Differentiation Sony, Apple,Lab Fleury 7
Relationship Metrics Scope 3 positioning options from Delta Best Product Customer Solution System Lock-in Low Cost or Differentiation Wide range offered: Product Packages Joint development Outsourcing Encourage to complementary Variety of solutions Open architecture Product: Market share Customer: Participation in clients System: Participation of complements With the product: The first in the market Dominant design With the clients: Customer Capture Learning Customization With the system: System inhibits competitor action Own standards predominate 8
The Blue Ocean Strategy Develop a blue market, away from the bloody and red sea of highly contested markets. Innovate based on creating value for the customer, not the technology or the price. Costs Value Reference: Kim, W. Chan e Mauborgne, Reneé, Blue Ocean Strategy, Harvard Business School Press, 2005 Differentiation with cost reduction 9
Blue Ocean Strategy (Reference: Chan Kim & Renné Mauborgne, 2005) Disputing an existing market presupposes a win-lose game Avoid confrontation: create a new market! "Blue Ocean" 100% Red Study with 108 companies: Blue Ocean is profitable! 86% Red Blue 62% 61% 38% 39% 14% 0% Blue % products % revenue % profit 10
Blue Ocean Strategy principles Conception: Redefining market frontiers; Look for demand outside the existing market; Focus on the overall value, not just the costs; Have a solid strategic sequence of execution Clear, focused and communicable strategy Have a distinct strategic profile, different from the traditional one, with a unique value proposition 11
Four Action Framework Reduce production factors that are well below Industry s standards Eliminate traditional factors that the industry take for granted Value creation Create new factors of attraction that are not offered in the sector Increase factors which generate value well above Industry s standards 12
Redefine borders: Escape herd vision; generally accepted views and market assumptions Look at other industries and other markets; radical innovation comes from market periphery; Identify and understand who is not your consumer; look for common interests between customers and non-customers. 13
The traditional Circus Focus on children, tents, lots of animals and hard benches!
The Cirque du Soleil Case www.cirquedusoleil.com Created in 1984 by Guy Laliberté and colleagues from a street troupe. It grew out of a mature industry: the circus. The circus sector in 1984: traditional format, few skilled labor and declining public; Competition for many new entertainment options Today, a major export product from Canada, assisted by more than 80 million customers in nearly 100 cities worldwide.
Performance Distinctive strategic profile ex. Gol Linhas Aéreas Inteligentes 10 8 6 4 2 0 Meals VIP room Classes Connections Cordiality Frequency Speed Price (low) Importance (high) Gol TAM Buses 16