[London 3D PrintShow 2013] Business Model Innovation with 3D Printing
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Transcript of [London 3D PrintShow 2013] Business Model Innovation with 3D Printing
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BUSINESS MODEL INNOVATION WITH 3D
PRINTINGProf. Thierry Rayna
ESG Management School
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PROF. THIERRY RAYNA
• Professor of Economics
• Department of Economics & Finance
• Chair of Digital Business
• ESG Management School, Paris
• Email: [email protected]
• Twitter : @ThierryRayna
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OUTLINE
• Business Model Innovation
• How 3D Printing is changing Business Model Innovation
• Learning from the past
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PARADOXES
• Technological innovation = Pinnacle of competitiveness
• Yet
• Less technologically advanced firms have wiped out more advanced firms because of a better business model
• Technological innovation endangers firms as it renders business model obsolete
• Critical importance of Business Model Innovation
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BUSINESS MODEL INNOVATION
• Is a means to sustain competitive advantage, especially in a highly competitive environment
• Among the most sustainable forms of innovation
• Continuous business model innovation is an important capability for every firm seeking success in the long term
• Firms that put business model innovation at the heart of their strategies have a higher profitable growth than those that do not
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BUT…
• strong inertia associated with business models (especially when they are successful)
• harder to see the rationale for business model innovation and predict its impact
• requires a change of mindset: often means abandoning the paradigms that made the firm successful and which are embedded in the firm’s existing business model
• business model innovation requires developing new skills and rejecting what made previous success
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BUSINESS MODEL INNOVATION
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BUSINESS MODEL COMPONENTS
Value PropositionProduct offeringService offeringPricing model
Value CaptureRevenue modelCost structure
Profit allocation
Value DeliveryDistribution Channels
Target market segments
Value Communication
Communication channelsEthos and story
Value CreationCore competencies
Key resourcesGovernance
Complementary assetsValue networks
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EFFECT OF BMI
Inside Outside
Incremental
Radical Disruptive
One component, minor change
Many components, major changes
A few components, major changes
Many components, minor changes
New industry
New markets
Same customers
Same market, new customers
Non-consumers
New market
Sustaining
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3D PRINTING AND BUSINESS MODEL INNOVATION
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THE TWO EFFECTS OF 3D PRINTING ON BMI
• Innovation in business model components
• Innovation in business model innovation
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INNOVATION IN BUSINESS MODEL COMPONENTS
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VALUE PROPOSITION
• Technological innovation = Changes in value proposition
• New products
• New services
• But that is not all. Oh, no, That is not all…
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VALUE CREATION
• Main impact of 3D Printing technologies
• In particular :
• value network
• complementary assets
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MASS CUSTOMISATION AND VALUE CREATION
• Large scale mass customisation
• Co-creation leads to higher value than mass production
• Customers become a key component of value network
• much larger!
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CROWDSOURCING AND VALUE CREATION
• Crowdsourcing already led to significant business model innovation, even to entirely new form of business models (Kickstarter, Threadless)
• 3D Printing takes crowdsourcing a whole step further
• Crowdsourcing manufacturing (Additer, Kraftwürz and MakeXYZ) = wider Value Network
• Existing 3D Printers become Complementary Assets
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VALUE DELIVERY
• 3D Printing increases Value Delivery
• Distribution Channels
• Target Market Segments
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DISTRIBUTION CHANNELS
• Creates new Distribution Channels
• Online services (Cubify Cloud, i.Materialise, Ponoko, Sculpteo, Shapeways)
• Printshops (iMakr, MakeBot)
• Customers themselves
• Can complement/replace mass-manufacturing
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TARGET MARKET SEGMENTS
• So far, niche market segment neglected because of high fixed costs
• 3D printing enables to serve niche markets regardless of how small they are
• monetize the ‘long tail’!
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HELPER FOR SQUARE
• Sold over 1,000 units
• Home manufactured
• $8 a piece
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‘KICKSTARTER 2.0’?
• Success of Kickstarter and the likes, but
• Lack of scalability
• (Relatively) significant demand needed to initiate production
• May be complicated to produce more batches (irregular demand)
• 3D Printing removes these constraints and is fully scalable
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POSITIVE FEEDBACK LOOP
Value proposition
Value creation
Mass-customisation
Value delivery
3D printers
Crowdsourcing
Contribution
Service
Equipment
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VALUE CAPTURE
• Positive impact:
• Reduced costs & costs passed on to consumers
• Negative impact:
• Far more difficult to capture value
• Innovative Revenue Model and new Profit Allocation
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INNOVATION IN BUSINESS MODEL INNOVATION
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3D PRINTING CHANGES BUSINESS MODEL INNOVATION
• Beside changes in components, 3D Printing radically changes the way to conduct Business Model Innovation
• ‘Mobile’ Business Models
• Rapid Prototyping for Business Models
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ADAPTIVE AND ‘MOBILE’ BUSINESS MODELS
• Ability to move business model horizontally to existing or new markets is a key aspect of business model innovation
• Often risky, because significant investments have to be made before even entering the market.
• 3D Printing reduces costs: products manufactured on demand with minimal costs
• 3D printing technologies can enable firm to rapidly move upstream or downstream and change the length and width of business model
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RAPID PROTOTYPING FOR BUSINESS MODEL
• Business Model Innovation by trial & error
• Significant risk and costs
• 3D printing technologies enable trying out various business models at a much lower cost
• size of the testbed actually increases with the adoption of 3D printing technologies
• Ability to rapidly try and test ideas to significantly increase the speed of business model innovation
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ADAPTIVE BUSINESS MODEL RAPID PROTOTYPING
Own marketRelated market New market
Design
Manufacturing
Distribution
Upstream
Downstream
Sideways
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3D Printing = Pay As You Go!
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LEARNING FROM PAST EXPERIENCE: VALUE CAPTURE IN DIGITAL
INDUSTRIES
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THE DIGITAL ECONOMY:A LAND OF OPPORTUNITIES
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THE DIGITAL ECONOMY:WHAT MOST COMPANIES ARE TRYING TO DO
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THE MUSIC INDUSTRYC. 2010
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THE DIGITAL ECONOMY:WHAT GOOGLE IS DOING
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THE DIGITAL ECONOMY:WHAT GOOGLE IS DOING
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THE DIGITAL ECONOMY:WHAT WE ARE DOING
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DIGITAL ECONOMICS AIKIDO
• Stop fighting against nature
• Channel the strength of digital economy to your advantage...
• ... without harming your customers
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WHAT ROLE FOR CORPORATIONS?
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CORPORATIONS = GATEKEEPERS
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TAPPING THE FLOW
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TAPPING THE FLOW
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TAPPING THE FLOW
Certification service
Micropayment
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THANK YOU
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[email protected]@ThierryRayna