This Is Business Model Innovation for New Growth

New Growth through

Business Model

Innovation.

www.sniukas.com

Innovation Series™

What Why How

Why

is Business Model

Innovation important?

History of the concept.

Source: Bernd W. Wirtz: Business Model Management: Design – Instruments – Success Factors. Gabler 2011.

Source: Christoph Zott, Raphael Amit and Lorenzo Massa: The Business Model: Recent Developments and Future Research Journal of Management 2011 37:

“Get the business model wrong, and there is almost no chance of success...”

Prof. David Teece

University of California, Berkley.

“Business model innovation matters and it is a top priority of CEOs.”

Source: IBM Global CEO Study 2006

„Innovation is front and center on the corporate agenda, according to a global survey. Executives are adding more breakthrough innovations and business model changes to their portfolio to fuel the growth engine.“

Business Week, November 16, 2009

Source: Businessweek / BCG Innovation Survey 2009

Source: Bernd W. Wirtz: Business Model Management: Design – Instruments – Success Factors. Gabler 2011

Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82

Stagnating or

declining

revenues

Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82

Why is Business Model Innovation important?

(1) Major element of differentiation and

sustainable competitive advantage.

(2) Fundamental to performance.

(3) Means to adapt to the rapidly changing

environment and seize opportunities.

(4) Key to the commercialization of new

technologies.

Source: Sniukas (2012).

Business Model Innovation as a Strategic Choice. Traditional Strategic Choices.

Markets

Products

Existing

New

Business Model Innovation as a Strategic Choice. The Strategy Cube.

Existing

New

Existing

New


Markets Customer Segments

Products Services

Business Models

Business Model Innovation as a Strategic Choice. The Strategy Cube.


Markets Customer Segments

Products Services

Existing

New

Existing

New Adjacent

Business Models

What

is Business Model

Innovation?

Business Model Innovation…

…is the invention of new ways of doing business,

with the aim to provide new and/or increased value

for the customers, the company itself and its

stakeholders.


What is your

value proposition?

Customer Value Proposition Ecosystem Value Proposition

Firm Value Proposition


Customer Value Proposition

Customer Segment Need

Offering

Product + Service +

Business Model

Who is your customer? What is his need? What is the solution you offer?


Ecosystem Value Proposition

Stakeholders Needs Offering

Who are your partners? What is their need? What is your offer?



Financial Strategic

• Revenues streams • Cost structure • Working capital • ...

• Competitive Advantage

• Innovation • Lock In • Image • …

Organizational

• Efficiencies • Use of assets • …


Your business model

Enables this value creation.




How do you organize to

Enable this value creation?






Which activities and

processes need to be

performed?

Which assets and

capabilities are

necessary?

Who provides

these?

How do you govern

the operations?


How

to innovate your business

model?

“New business model innovation continues to represent a significant challenge for large

incumbent firms despite their access to resources, market knowledge, and key technologies.”

(Koen et al. 2010 50)

Major challenges and barriers.

(1) Business Model Innovation Challenges

Different type of innovation

High risk and uncertainty

(2) Organizational Challenges

Lack of capabilities

New organization required: Yes/No?

(3) Individual Challenges

Mental models/cognitive maps

Change in behavior

The Business Model Innovation Loop.

Discovery

Interpretation

Ideation

Experimentation

Evolution 2

3

4

5

6

1

7

Start

Launch



2

3

4

5

6

1

7

Start

Define your Goal

• What are your objectives?

• Why are you embarking on

this journey?

• What is the problem you have

to solve?

• Assess your current growth

initiatives.

• Create awareness for the

need for Business Model

Innovation.

• Establish the team.

• Develop a common

understanding of the purpose,

the concepts used.



Discovery

2

3

4

5

6

1

7


Find Facts & Inspiration

• Who are your customers?

• Why are they buying?

• Who are Non-Customers?

• Why are they not buying?

• Who are your competitors?

• What is the current offering?

• What are the dominant

business models?

• What is your current business

model? SWOT?

• Which trends are impacting

your industry?

• What is your company really

good at?

• What assets could you use?


Interpretation

2

3

4

5

6

1

7


Seek Understanding

• Make sense of the data.

• Find opportunities for new

growth and business model

innovation.

• What is the customers’ job-to-

be-done (really)?

• Which are the barriers to

consumption: Affordability,

access, skills, time,…?

• Develop assumptions of what

is really going on.

• Which opportunities do you

see?


Ideation

2

3

4

5

6

1

7


Generate and Refine Ideas

• How do you want to seize the

opportunities?

• How can you overcome the

barriers to consumption?

• Brainstorming

• Concept development

• Document your assumptions

on why you think a particular

idea is a good solution.

25 strategies for reinventing your Business Model. WORKS ACROSS THE BUSINESS

#1 Challenge industry assumptions

#2 Look at completely different industries

VALUE PROPOSITION

#10 Offer complementary products and services

#11 Offer solutions and experiences

#12 Offer bundles

#13 Switch your appeal: functional versus

emotional

#14 Focus on the job to be done

#14 Selectively eliminate, reduce, raise and create

#15 Look at subsitutes

#16 Expand the use of your assets and capabilities

#18 Look at the customer experience

HOW YOU DO BUSINESS

#19 Reinvent the customer interface (channels)

#20 Reinvent your customer relationships

#21 Invent new revenue streams

#22 Price differently

#23 Reinvent you cost base

#24 Re-assess your key activities

#25 Collaborate with suppliers, partners, the network

and ecosystem

CUSTOMERS

#3 Target non-customers

#4 Target less profitable customers

#5 Target the least satisfied customers

#6 Target the chain of buyers

#7 Segment according to commonalities

#8 Segment according to circumstances

#9 Desegment the customer based



Experimentation

2

3

4

5

6

1

7


Test your Ideas

• Make something real

• Test assumptions discussing

with your customers

• Test assumptions with

strategic experiments

• Get feedback

• Create knowledge about the

potential of your ideas

• Learn what works and what

does not


Evolution 2

3

4

5

6

1

7


Learn & Adapt

• What are the insights gained

from experimentation?

• Which of your assumptions

are correct, which not?

• How do you need to adapt

your business model?


2

3

4

5

6

1

7

Launch


Go Large Scale

• Plan for action

• Prepare the organization and

the market for the launch

• Organizational Transformation:

Structures, processes,

systems, skills, assets,…

• Training

• Marketing

• Financing

• Scaling up

Want more?

www.sniukas.com

“The difficulty lies not in the new ideas,... …but in escaping from the

old ones.”

John Maynard Keynes

Get in touch! Marc Sniukas

[email protected] www.sniukas.com

Thank you for your attention!

This Is Business Model Innovation for New Growth

Business

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