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Business Model Transformation
- 1. Webinar: Business Models1 DEVELOPING NEW BUSINESS MODELS 19 APRIL 2018 B U S I N E S S M O D E L T R A N S F O R M A T I O N
- 2. Webinar: Business Models2 W H A T W E D O We partner with leaders in corporate and government organisations to design and execute new innovation strategies, services and products through the customer or stakeholder lens. We bring together the best of Design Thinking, Lean Startup, Corporate Strategy and Customer Centric approaches to co-create experiences that will delight your customer.
- 3. Webinar: Business Models33 DR JEFFREY TOBIAS MANAGING DIRECTOR, THE STRATEGY GROUP AGSM FELLOW • Innovation thought-leader and entrepreneurship strategist • Expertise from academic, entrepreneurial and corporate worlds • Active angel investor on the board of various well known startups • Professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales • Conducted numerous engagements with government departments and commercial businesses on the principles of Design Thinking other stakeholder- centric methodologies • Trained over 1,000 senior executives in Westpac on Design Thinking and Lean Startup. • Previously Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business. • Focus: Innovation, Business model transformation, Design Thinking, Lean Startup, Customer centricity, Leadership M: +61 401 890 071 T: +61 2 9388 9925 [email protected] www.thestrategygroup.com.au Suite 606a, 3 Waverley Street, Bondi Junction 2022 NSW Australia Qualifications Bachelor of Science (first-class Honours; University Medal), UNSW PhD, UNSW
- 4. Webinar: Business Models44 T HE ST R AT EGY GR OUP O U R U N I Q U E VA L U E P R O P O S I T I O N We offer a unique combination of global leading methodologies and skills by operating at the intersection of innovation, entrepreneurship and academia.
- 5. Webinar: Business Models55 OUR CLIENTS
- 6. Webinar: Business Models66 AGENDA 1. The changing landscape 2. Business model lifecycle 3. Introducing business model transformation 4. Frameworks for business models 5. Validating your new business model 6. Examples 7. Impact on people and leadership
- 7. Webinar: Business Models7 THE CHANGING LANDSCAPE 01
- 8. What got ushere, won’t get us there.
- 9. Webinar: Business Models99 IMAGINE YOUR THINKING IN 2007 …if you were in one of these businesses…
- 10. Webinar: Business Models1010 SHOULD AUSTRALIA WORRY ABOUT AMAZON? USA Changing Retailer Market (Data 2016)
- 11. Webinar: Business Models1111 SOME ORGANISATIONS ARE ABLE TO TRANSFORM But what about now … 2017?
- 12. Webinar: Business Models1212 FORCES ARE RESHAPING OUR WORLD > Exponential technology progress – automation, big data, and robotics > New consumers (emerging economies) > Global competition > Disruption . . . > Value shifting from products to experience (in many arenas) > Product/market power, scale, and legacy positions are NO LONGER SECURE guarantees of future success > Creative capability is a critical resource
- 13. Webinar: Business Models13 BUSINESS MODEL LIFECYCLE 02
- 14.
- 15. Webinar: Business Models1515 Source: Upfront Ventures @cbinsights COST TO LAUNCH A TECH STARTUP
- 16. Webinar: Business Models1616 ORGANISATIONAL LIFECYCLE Maturity Why does it exist? DANGER
- 17. Webinar: Business Models17 INTRODUCING BUSINESS MODEL TRANSFORMATION 03
- 18. Webinar: Business Models1818 THE BIG QUESTIONS How can an organisation deal with rapid change and uncertainty in their environments? How can an organisation generate, evaluate, and implement a sensible new business model? What can an organisation do to protect itself from possible disadvantageous changes in its external environment at point B rather than experiencing performance problems at point A? Transforming the Business Model and the Organisation . . . Performance Time B A
- 19. Webinar: Business Models1919 HYPOTHESIS This life cycle decline, for an organisation, is not inevitable! Great leaders jump their organisations to a new life-cycle curve – frequently a new business model.
- 20. Webinar: Business Models2020 PERHAPS WE LIVE IN A ERA OF “ALWAYS-ON TRANSFORMATION” Source: BCG 2015 A Leader’s Guide to Always-On Transformation. Hemerling, J, Dosik, D, and Rizvi, S. DELIVER LAUNCH SUSTAIN DELIVER LAUNCH SUSTAIN DELIVER LAUNCH SUSTAIN
- 21. Webinar: Business Models2121 BUSINESS MODEL PATTERN Razor and Blade The basic product is cheap, or given away free. The consumables that are needed to use or operate it, on the other hand, are expensive
- 22. Webinar: Business Models2222 BUSINESS MODEL PATTERN Freemium The basic version of an offering is given away for free in the hope of eventually persuading the customers to pay for the premium version.
- 23. Webinar: Business Models2323 BUSINESS MODEL PATTERN Peer to Peer The model is based on a cooperation that specialises in mediating between individuals belonging to an homogeneous group. It is often abbreviated as P2P.
- 24. Webinar: Business Models2424 BUSINESS MODEL PATTERN Subscription The customer pays a regular fee, typically on a monthly or an annual basis, in order to gain access to a product or service.
- 25. Webinar: Business Models2525 BUSINESS MODEL PATTERN Subscription The customer pays a regular fee, typically on a monthly or an annual basis, in order to gain access to a product or service.
- 26. Webinar: Business Models2626 BUSINESS MODEL PATTERN Traditional Business Model Movie Ticket Purchase New Business Model Movie Pass
- 27. Webinar: Business Models2727 BUSINESS MODEL PATTERN Presales Mercedes Traditional: Build – Market - Sell Tesla New Business Model: Market – Sell – Build Image: Tesla.comImage: MercedesBenz.com
- 28. Webinar: Business Models2828 TESLA: MARKET – SELL – BUILD On May 27th, 2016, Tesla opened pre-orders for their Model 3, and within 24 hours, more than 200,000 customers had paid deposits to reserve their place in line — without the physical product existing. Tesla’s cost of advertising was only $6 per car — less than 1/90th of the ad cost of their closest price-range competitor. Image: Tesla.com
- 29. Webinar: Business Models29 FRAMEWORKS FOR BUSINESS MODELS 04
- 30. Webinar: Business Models3030 NINE BOX BUSINESS MODEL FRAMEWORK Key Partners • Who are our Key Partners? • Who are our key suppliers? • Which Key Resources are we acquiring from partners? • Which Key Activities do partners perform? Key Activities • What Key Activities do our Value Propositions require? • Geographies? • Client Relationships? • Revenue streams? Key Resources • What Key Resources do our Value Propositions require? • Our distribution channels? Customer Relationships? • Revenue Streams? Customer Relationships • What type of relationship does each of our customer segments expect us to establish and maintain with them? • Which ones have we established? • How are they integrated with the rest of our business model? • How costly are they? Channels • Through which channels do our customer segments want to be reached? • How are we reaching them now? • How are our Channels integrated? • Which ones work best? • Which ones are most cost-efficient? • How are we integrating them with customer routines? Value Propositions • What value do we deliver to the customer? • Which one of our customer’s problems are we helping to solve? • What bundles of services are we offering to each customer segment? • Which customer needs are we satisfying? Characteristics • Newness • Performance • Customization • Getting the Job Done • Brand/Status • Price • Cost Reduction • Risk Reduction • Accessibility • Convenience/Usability Customer Segments • For whom are we creating value? • Who are our most important customers? Cost Structure • What are the most important costs inherent in our business model? • Which Key Resources are most expensive? • Which Key Activities are most expensive? Revenue Streams • For what value are customers really willing to pay? • For what do they currently pay? • How are they currently paying? • How would they prefer to pay? • How much does each revenue stream contribute to overall revenues?
- 31. Webinar: Business Models3131 AMAZON’S BUSINESS MODEL CANVAS
- 32. Webinar: Business Models32 VALIDATING YOUR NEW BUSINESS MODEL 05
- 33. Webinar: Business Models3333 FROM IDEA TO EXECUTION Search Execution
- 34. Webinar: Business Models3535 ? ? ? ? ? ? ? ? ? POPULATED MODEL IS A BUNCH OF HYPOTHESES Source: Strategyzer.com
- 35. Webinar: Business Models3636 DESIRABILITYFEASIBILITY VIABILITY THREE LENSES Source: Strategyzer.com
- 36. Webinar: Business Models3737 THE BUSINESS MODEL CANVAS FEASIBILITY Can we build it? VIABILITY Sanity check DESIRABILITY Do they want it? Source: Strategyzer.com
- 37. Webinar: Business Models3838 THE BUSINESS MODEL CANVAS EXECUTION RISK FINANCIAL OPPORTUNITY & RISK MARKET OPPORTUNITY & RISK Source: Strategyzer.com
- 38. Webinar: Business Models3939 BUILD AN EXPERIMENT LIBRARY Strong evidence Long time to set up and conduct experiment short time to set up and conduct experiment Weak evidence The stronger your evidence, the stronger your confidence level.
- 39. Webinar: Business Models4040 THE PROGRESS BOARD BUSINESS HYPOTHESIS TEST: backlog TEST: build TEST: measure TEST: learn PROGRESS ✗ invalidated ? unclear results ✓ validated http://blog.strategyzer.com/posts/2015/3/11/lean-startup-progress-board
- 40. Webinar: Business Models41 EXAMPLE 06
- 41. Webinar: Business Models42 REWARDS Shopper Reward System Sport Activities in the Mall Drop-off Play Zones for Kids SCENTRE GROUP INITIATIVE
- 42. Webinar: Business Models4343 IN SUMMARY 1. Most organisations need new business models to combat disruption 2. The Business Model Canvas is an excellent way of describing a business model 3. Business models need to be desirable, feasible and viable 4. By conducting simple, low-fidelity experiments starting with desirability, the new business model can be significantly de-risked 5. The Progress Board enables you to keep track of these experiments
- 43. Presentation: ??? T HA N K Y O U KEEP IN TOUCH Dr Jeffrey Tobias, Managing Director [email protected] 0401 890 071 www.thestrategygroup.com.au
Editor's Notes
- #9 Product/market power, scale, and legacy positions are NO LONGER SECURE guarantees of future success
- #17 Do you believe that businesses should live forever? Long time – Catholic Church ~2000 years A Hotel in Japan claims to be founded 705AD Why do organisations typically go through this life cycle? Is it a forgone conclusion? Poor decisions (congruence model) Trends not seen You were too successful and did not want to change
- #19 Restate the need for business transformation in Australia
- #22 The Business Model Navigator: 55 Models That Will Revolutionise Your Business by Oliver Gassmann (Author), Karolin Frankenberger (Author), Michaela Csik (Author) Apple is the backwards razor and blade – itunes and “software are low priced and the hardware is expensive (2010 hardware 30 Billion – 60 times song, software, and e-books) Nespresso… Brilliant.
- #23 The Business Model Navigator: 55 Models That Will Revolutionise Your Business by Oliver Gassmann (Author), Karolin Frankenberger (Author), Michaela Csik (Author)
- #24 The Business Model Navigator: 55 Models That Will Revolutionise Your Business by Oliver Gassmann (Author), Karolin Frankenberger (Author), Michaela Csik (Author)
- #26 Totalcare 1990 The first moment of transformation came in 1999 when a major customer, American Airlines, was placing an engine order for approximately 50 new 777 aircraft. American Airlines asked Rolls-Royce to provide a whole new service, including managing the transportation of engines for repair and overhaul, managing its peripheral supplies, and partnering on its maintenance base. It was happy to change the basis of payment to a dollar per engine flying hour mechanism rather than a one-off payment per overhaul. Given Rolls-Royce‟s close relationship with American Airlines and the size of the prize, this created the focus to turn the strategy into reality, taking on the challenge of managing costs for a 20 year period with a defined revenue line – totally transforming the risk structure of the business. GE and Pratt&Whitney have similar programs. In GE's case, it is called OnPoint, sold as "Power by the Hour". The airline does not pay for the engines, but for the time they are flying. Now the engine manufacturer has a strong incentive to improve the reliability of its engines, but also a strong lever to push out third-party maintenance providers.
- #31 Value Proposition Canvas
- #43 Introduce a shopper reward system based on spend, much like a frequent flyer program. Preferential memberships to recognise shopper loyalty. Provide a drop-off play zone for kids which is supervised by qualified staff. Parents pay to have the children looked after while they shop. Activating our malls with sporting & physical activities, promoting active communities. Examples include water parks, rock climbing walls, yoga classes and partnerships with retailers i.e.: Lorna Jane
- #44 Align the team around the new vision. Once you have validated your Business Model Canvas, you need to bring your team along for the journey. Here are eight steps (courtesy John Kotter) to assist in doing so: 1. Create a sense of urgency 2. Build a guiding coalition 3. Form a strategic vision and derive initiatives 4. Enlist a volunteer army 5. Enable action by removing barriers 6. Generate short term wins 7. Sustain acceleration 8. Institute change