Business Model Creativity

Andreas Rusnjak, MBA

eMail: [email protected]

URI: businessmodelcreativity.net

Twitter & facebook: bmcreativity

Business Model Framework

About Andreas

• Year of birth 1974

• Diploma Degree in Economics

• Master of Business Administration

• Job- & Startup-Experience

• HUK-Coburg

• Jobscout24

• flyerwire

• scovilla

• Caban

• Dissertation @ CAU Kiel/ Uni Leipzig• Business Model Innovation

• Business Model Transformation

• Initiator of runpat.com

• Focus• eCommerce

• Consulting, Coaching

• Entrepreneurship

• Business Modeling

• Strategy Development

Work in Progress…

Authors:Andreas RusnjakMatthias PohleThomas Matyssek

IN GENERAL

The Goal of every Company should be to create and

deliver a customer value which will be better than

the value offered by the competition.

Increasing competitive pressure, technologicaladvance, innovation, changing social values and a

continuously rising power of the user are forcing companies more and more to challenge and change their business models, to develop new business models or to

liquidate existing ones.

Trends for this Decade

• Functionality

• Engagement & Experience

• Co-Creation & Lean-Startup

• Crowdfunding/ Community-Funding

• Eco-/ Green Business Models

• …

Adapted from: Thaesis

The Transformation-Cyclesof business models

will become more frequentand will occur at increasingly short intervals

In this context Transformation means the development, the design, the change and/ or the implementation

of a business model.

Today the capability for transformation can be seenas a critical success factor for companies.

Roles involved in transformation processes

Sales

HR

Customer Care

Production

…

Participants of transformation projects are often different in their professional background and their experience

as well as in their social background and education.

These people often speak and think in different pictures and languages.

• Unrealistic goals

• Important stakeholders are not involved

• Lack of support by the top management

• Insufficient Resources

• Unclear context to strategy

• Poor communication

• No or little involvement of the project members

Common reasons for the failure of transformation projects

It is a 100 times more expensiveto fix errors in production than during the

earliest development phases of transformation projects.

B. Boehm and V. Basili, “Software Defect Reduction Top 10 List,” IEEE Computer, vol. 34(1): 135-137, January 2001

BUSINESS MODELING

Level of Competition

Ecosystem

Price

"Business model innovationwill become as important

as technological innovation."

Henry Chesbrough (2011)

"There has never been as much interest in business models as there is today; seven out of 10 companies are trying to create innovative business models, and 98% are

modifying existing ones, according to a recent survey."

Casedesus-Masanell & Ricart (Harvard Business Review, JAN-FEB/2011)

The term business modeling is often associatedwith the transformation of business models

and has gained attention sincethe emergence of the New Economy.

Business Modeling and Business Process Modeling

Business Process ModelingBusiness Modeling

Who are the actors involved in the operations?

Which operational activities can be distinguished?

Which activities are executed by which actors?

What are the inputs and outputs of activities?

What is the sequence of activities to be carried out for a specific case?

Who are the value-adding business actors involved?

What are the elements of offerings?

What value-creating or -adding activities produce and consume these offerings?

What are the offerings of which actors to which other actors?

Which value-creating or -adding activities are performed by which actors?

Who offers what to whom? What are the value creating activities?

Gordijn, J.; Akkermans, H.; van Vliet, H.: Business Modelling Is Not Process Modelling.; Conceptual Modeling for E-Business and the Web, 2000; S. 40‐51

Entrepreneurial Business Modeling means

the development of a business model– referred to the definition before –

in its first, early stage of developmentand is used to create competitive advantage/ growth

through Creativity.

Formal Business Modeling should be used on

later stages of development and higher degrees of maturity of a business model and should lead to

competitive advantage/ growth through Efficiency.

The focus of bmcreativity points to the

early stages of business model development.

DESCRIBE THE BUSINESS MODEL BEHIND APPLES IPOD!

Example

Business Model Framework Einfache Fassungvon Alexander Osterwalder9 - Blöcke

in Anlehnung an Alexander Osterwalder (2010), online aus: http://www.slideshare.net/Alex.Osterwalder/what-is-a-business-model

in Anlehnung an Alexander Osterwalder (2010), online aus: http://www.slideshare.net/Alex.Osterwalder/what-is-a-business-model

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A business model describes in an abstract way a relevant selection of products (goods and

services), necessary means and corresponding information-, transfer and financial-flows along the

value chain(s) of a company or a business unit.

Important elements of a business model are

(1) involved actors (e.g. customers, suppliers, co-operation partner,

competitors, etc.) and their goals/ intention, (2) the value proposition, (3) channels and (4) relationships, (5) key resources, (6) key activities, (7) relevant costs and (8)

revenues as well as (9) critical success factors and (10) the

representation of the competitive strategies.

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PROCESS & BUSINESS MODEL-FRAMEWORK

The Goal of every Company should be to create and

deliver a customer value which will be better than

the value offered by the competition.

An important means of reaching this goal is the right configuration of the business model components and the right answers to fundamental key questions*.

*Key Questions based on a lot of well known researchers and praticioners…

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Find a way to bring it to market

Define the Problem and its possible solution

Process (in short)

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Go out of the building!!!

Begin with the NABC

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NEED

APPROACH

BENEFIT

COMPETITION/

COMPETENCIES

VALUE

PROPOSITION/

USP

• What are the most important, vital customer- and market-needs or grievances that point to needs?

• What are the unique approaches to address these needs?

• What is the specific benefit for your customers and your company?

• How predominant are these approaches against your competition or alternatives available for your customers?

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NEED

• Which customer segments do we address?

• What are the central customers’ needs?

• What do we, our friends, our family or colleagues lack?

• What are the challenges our customers struggle with?

• What can we improve?

• What are the typical use cases?

• Where is our chance?

• How important is the solution for our customers?

• What is important for our customers (price, quality, time, speed, status quo, know-how …)?

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APPROACH

• What is the design of our solution/ approach?

• How is our product designed?

• What are our core processes?

• What is our USP?

• How is the product developed and offered to our customers?

• In which situations does the customer use our product?

• What are the most important touchpoints and shared experiences between us and our users?

• Which role do we play?

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BENEFIT

• What is the benefit for our customers?

• Which advantages does our approach create for our customers?

• Which results do we want to provide to our customers?

• Which functional, monetary and emotional benefits will our customers have?

• What is the benefit for our company?

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COMPETITION

• Which alternatives exist today?

• Who and where are our most important (possible) competitors?

• Which alternatives can come tomorrow?

• What or where are the (possible) risks?

• What will happen if we do nothing?

• What are our most important chances or competencies on market?

• Do we have market entry barriers?

• Can we create market entry barriers?COMPETENCIES

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VALUE

PROPOSITION/

USP

• Our value proposition/ USP in one short sentence

• Alternatively: Our value proposition/ USP in a maximum of seven words

From value proposition to business model framework

THE COMPONENTS

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VISION

CUSTOMERS

VALUE

PROPOSITION

CUSTOMER

RELATIONSHIPS

CHANNELS

COST

STRUCTUREMISSION

CRITICAL

SUCCESS

FACTORS

KEY ACTIVITIES

KEY

PARTNERSHIPS

KEY

RESOURCES

STRATEGIES

REVENUE

MODEL

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VISION

• Where do we want to be in 2, 5, 10 years?

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CUSTOMERS

• Who are our customers?

• Who are our most important customers?

• Which customer segments do we address?

• Whose problems do we solve?

• Which role do our customers have in their organization?

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VALUE

PROPOSITION

• What are the most important, vital customer- and market-needs or grievances/challenges that point to needs?

• What are the unique approaches to address these needs?

• What is the specific benefit for our customers and our company?

• How predominant are these approaches against your competition or alternatives available for our customers?

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CUSTOMER

RELATIONSHIPS

• Which kind of relationship do our customer segments allow and how much will it cost?

• Do we have any existing relationships to our customers and how much do they cost?

• How are these relationships integrated into our routines and touchpoints?

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CHANNELS

• Which channels are qualified to reach our customers?

• How do we reach them today?

• How are these channels integrated into our processes or routines?

• How can we integrate these channels into the processes or routines of our customers?

• Which channel performs best?

• Which channel is most cost-effective?

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MISSION

• How do we want to be perceived by our stakeholders?

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CRITICAL

SUCCESS

FACTORS

• Which factors influence our company’s success?

• Which strengths should we enhance and which weaknesses should we eliminate?

• Which chances should we use and which risks should we avoid?

• Which trends can be observed on the market and what is their influence on the market/ our company?

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KEY ACTIVITIES

• What are the sources for market differentiation and how do our activities support them?

• What is our job in the value chain?

• What are the most important activities?

• Which benefit/ value will they provide?

• Which activities should be automated?

• How can activities be linked in a novel way?

• Which activities are customers not willing to pay for?

• Which activities do our channels, customer relationships and revenues need?

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KEY

PARTNERSHIPS

• Which activities should we perform by ourselves and which should we buy from market?

• Who are our most important partners?

• Which partners do we need to perform our key activities and to deliver our value proposition?

• Which key activities are performed by our partners?

• Which key resources are delivered by our partners?

• Which dependencies can arise or already exists?

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KEY

RESOURCES

• What are the sources for market differentiation and how do our activities support them?

• Which resources do we need to perform our key activities?

• Which resources do we need to deliver our value proposition?

• Which resources do our channels, customer relationships and revenues need?

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STRATEGIES

• Who are our competitors and in which fields, segments, … are their value propositions superior to our value proposition?

• In which fields, segments, … is our value proposition superior or on the verge of becoming superior?

• Do we want to play in a niche?

• Do we want to be cost leader or differentiator?

• Which resources, activities and partnerships can lead to strategic competitive advantages?

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COST

STRUCTURE

• What are the most important costs?

• Which key activities are the most expensive?

• Which key resources are the most expensive?

• Which channels are the most expensive?

• Which customer relationships are the most expensive?

• Which key partners are the most expensive?

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REVENUE

MODEL

• How do we earn money?

• Which benefit/ value are customers willing to pay for?

• Which benefit/ value do customers pay for currently?

• How (much?) do the customers pay currently?

• Which contribution provides every revenue stream compared to the total revenue?

THE BUSINESS MODEL FRAMEWORK AS A MANAGEMENT TOOL

Exte

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This side addresses the WHO Do the right things!

Inte

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This side addresses the HOW Do the things right!

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Focus to NABC-Framework, generally used at the begin of the business modeling process.This view addresses the WHAT and is the base to configure the other components around the value proposition!

Co

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Focus to Key Resources, Key Activities, Competition, internal Critical Success Factors,Approach, Channels, Market-based Strategies and the Revenue Model

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Focus to Need, Benefit, Customers, Customer Relationships, external Critical Success Factors,Key Partners, Cost Structure and Resource-based Strategies

Business Model Innovation/ Transformation

Kunden

Kundenbeziehung

Vertriebskanal

Angebot

Wichtige Aktivitäten

Wichtige Ressourcen

Partner

Finanzen

Wettbewerb

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€€

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The BMCreativity-Framework has been proven

• The following framework can also be applied in the product development.

• Experience shows significant results in reducing time-to-market as well as the design and redesign of business models or products after 2-3 workshop days.

• The concept has been proven both in teaching and in the startup/ corporate group environment.

Sources

• Forrester Research Inc.

• Harvard Business Review

• MIT Sloan Management Review

• Dissertation (zur Zeit in Begutachtung)

• More Information:

QUESTIONS/ DISCUSSION?

or download it here without slideshare-account goo.gl/zy8GB

Business Model Creativity

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