Business modeling

• 1. Business ModelingThe Bridge business innovators

2. business modeling 3. Business model as the backbone ofhow teams plan and actBusiness planStrategicFinancial13 planningplanningBusinessBusiness model Case TeamRolloutAspects Plan Knowledge Project planning 24 planningBusiness modeling as a guidance creates:! a business mindset from day oneconsistency between teams a customer focusBusiness modeling 14 4. Analysis of the term business model The activity of buying and selling goods and services, or a particular company that does this, or work you do to earn money. BUSINESSMODEL A representation of something, either as a physical object which is usually smaller than the real object, or as a simple description of the object which might be used in calculations. What is a business model? 15 5. From marketing segments tostrategic segments 1 most valuable customer: on which customers are we focussing?2 what we offer: What do we deliver and how unique is this? 3how we deliver Searching for strategic segments value drives asks for different value conceptsStrategic segments 16 6. The challenge ! Choose the most important customers and organize around them WHO?WHAT?HOW? Unsatisfied customers Higher value Lower costs Non customers (yet) Lower pricesThe Challenge 17 7. Who is the most valued customer?businessman who doesnt pay his own bill Everyone whos paying for their own ticketCase18 8. How unique is the value curve?*Value attributesLow Medium High worldwide network wide choice in distribution new airplanes punctuality seat selection business class seat spacing in-flight meals frequent flyer miles refunds if plane is late flexibility to change flight refund for missed flight price attractiveness*based on marketing as strategy, nirmalya kumar Case 19 9. Different segments asks for a differentof realization of the value modelflexibelsingle fareWHAT? full-serviceno frillshigh prices Low prices Purchasing Integratedoutsourced Operations Multiple type of planes Single type aircraftShort- and long-haul routes point-2-point routesPrime airports (hubs) Rapid turnaroundAssigned seatingNo 0n-flight mealsHOW? MarketingSegmented customers Everyone is equalVaried meal servicesno frequent flyer programsFrequent flyer programone way ticket onlyVariable pricing Distribution Travel agents/worldwide systems direct sales*based on marketing as strategy, nirmalya kumarCase 20 10. Business modeling in all its aspectsWHO? WHAT? HOW?Target groupProposition Delivery model distributionproduct / service partner network target groupcore processescommunication revenue model coorporation model sources: G. Hamel - Leading the Revolution 2000; A. Osterwalder - How to Describe and Improve yourBusiness Model to Compete Better 2005; N. Kumar - Marketing as Strategy - 2004 Business model 23 11. From dream to business model WHO? WHAT? HOW? Target group Proposition Delivery model Correlation between definitionsdistribution WHAT?product / service HOW?partner networkgroup target group PropositionDelivery modelcore processes Business model communicationrevenue modelcoorporation model What value do we offer?distributionproduct / service partner network How do we realize it? core processes communication revenue modelcoorporation model Earning model How do we earn money with this business model? Business case What is the size of the target group? How much are they willing to pay? What are the cost to deliver? Is the P&L positive, or are there other advantages? Business model 24 12. Valued Customer Who are our valued customers? Are there customers who are unhappy with all the current offerings of theindustry? Are there customers who have a need but are not being currently served bythe industry? Are we trying to reach customers who are unaware that they need ourproduct? If so, how are we going to create the need? Who is the user? The buyer? The influencer? The payer? What are thepreferred criteria of each and their power in the buying decision? Is the target segment large enough to meet our sales objectives? What is the growth rate of the target segment?3Vs 25 13. Value Proposition What are the core needs we are trying to address with our value proposition? Does the value proposition fit the needs of our valued customers? What benefits are we actually delivering to the customers? Is our value proposition differentiated from the competitors or are wepositioning in a crowded space? Are our value proposition claims reinforced by underlying product and servicefeatures? Are we positioning on attributes that we can defend against competitiveattacks? 3 Vs 26 14. Value Network Can we serve the valued customers with the value propositions at a profit? Do we have the necessary capabilities to deliver the value proposition? If not,could we acquire or partner with them? Would serving the valued customers have negative consequences on ourexisting customers of businesses? If so how are we going to control for this? Which high-cost or low-value-added activities could be eliminated, reduced, oroutsourced in our value network? Where are the advantages of scale in our value network? Can we maintainscale while not losing flexibility? How different is our value network from the rest of the industry? What is our break-even point? Could we lower it by slightly varying the valuenetwork?3Vs 27 15. Examples of earning models time spent & fees subscription performance based spot market (share of) value creation % of revenues/profits generated % of cost cutting sales minus purchase web & portal related hardware & consumable software add on servicesEarning models 28 16. More information about innovationStationsplein 1P.O. 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