This webinar discussed developing new business models to address changing market landscapes. It introduced the business model lifecycle and explained that organizations can transform their business models to jump to new lifecycle curves. Various business model frameworks and patterns were presented, including the Business Model Canvas. The webinar emphasized validating new business models through experiments to test desirability, feasibility, and viability before full execution. Examples of business model transformations were provided.
1. Webinar: Business Models 1
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 Models 2
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 Models 33
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
jeffrey@thestrategygroup.com.au
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 Models 44
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.
6. Webinar: Business Models 66
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
9. Webinar: Business Models 99
IMAGINE YOUR THINKING IN 2007
…if you were in
one of these
businesses…
10. Webinar: Business Models 1010
SHOULD AUSTRALIA WORRY ABOUT
AMAZON?
USA
Changing Retailer Market
(Data 2016)
11. Webinar: Business Models 1111
SOME ORGANISATIONS ARE ABLE TO
TRANSFORM
But what about now …
2017?
12. Webinar: Business Models 1212
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
18. Webinar: Business Models 1818
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 Models 1919
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 Models 2020
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 Models 2121
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 Models 2222
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 Models 2323
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 Models 2424
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 Models 2525
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 Models 2626
BUSINESS MODEL PATTERN
Traditional Business Model
Movie Ticket Purchase
New Business Model
Movie Pass
27. Webinar: Business Models 2727
BUSINESS MODEL PATTERN
Presales
Mercedes
Traditional: Build – Market - Sell
Tesla
New Business Model: Market – Sell – Build
Image: Tesla.comImage: MercedesBenz.com
28. Webinar: Business Models 2828
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
30. Webinar: Business Models 3030
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?
34. Webinar: Business Models 3535
?
?
?
? ?
?
?
?
?
POPULATED MODEL
IS A BUNCH OF HYPOTHESES
Source: Strategyzer.com
35. Webinar: Business Models 3636
DESIRABILITYFEASIBILITY
VIABILITY
THREE LENSES
Source: Strategyzer.com
36. Webinar: Business Models 3737
THE BUSINESS MODEL CANVAS
FEASIBILITY
Can we build it?
VIABILITY
Sanity check
DESIRABILITY
Do they want it?
Source: Strategyzer.com
37. Webinar: Business Models 3838
THE BUSINESS MODEL CANVAS
EXECUTION
RISK
FINANCIAL
OPPORTUNITY & RISK
MARKET
OPPORTUNITY & RISK
Source: Strategyzer.com
38. Webinar: Business Models 3939
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 Models 4040
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
41. Webinar: Business Models 42
REWARDS
Shopper Reward
System
Sport Activities
in the Mall
Drop-off Play Zones
for Kids
SCENTRE GROUP INITIATIVE
42. Webinar: Business Models 4343
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 H A N K Y O U
KEEP IN TOUCH
Dr Jeffrey Tobias, Managing Director
jeffrey@thestrategygroup.com.au
0401 890 071
www.thestrategygroup.com.au
Notas do Editor
Product/market power, scale, and legacy positions are NO LONGER SECURE guarantees of future success
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
Restate the need for business transformation in Australia
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.
The Business Model Navigator: 55 Models That Will Revolutionise Your Business
by Oliver Gassmann (Author), Karolin Frankenberger (Author), Michaela Csik (Author)
The Business Model Navigator: 55 Models That Will Revolutionise Your Business
by Oliver Gassmann (Author), Karolin Frankenberger (Author), Michaela Csik (Author)
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.
Value Proposition Canvas
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
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