W E B I N A R V I I
Topics Introduc*on to business models
Business model pa4erns
Asset-‐based business models
Business model pivots
Disrup*ve business model characteris*cs
Working Defini<ons
◦
The design of a business is the means for delivering
value to customers & earning a profit. ◦ Business design incorporates the selec*on of
customers, its offerings, the tasks it will do itself and
those it will outsource, and how it will capture profits. ◦ A business model is the descrip*on of how the business will work in economic terms; a business model is a set of planned assump*ons about how a firm will create value for all its stakeholders. It is a system that enables a company to grow & make money on a sustainable basis.
Examples Razor versus razor blades
Kindle versus iPad
Southwest Airlines versus American Airlines
Costco
$9.00
$37.57
Bill of
Materials
(BOM)
6
7
Strategy Elements for Two Airlines
Element
American
Southwest
Customer
Customers to many places in the world
Customers point to point in U.S.
Product
Accessibility
Price
Service
Differentiation
Wide product scope; flies almost anywhere
Limited point to point flights; easy maint. & training for low cost
Scope of product & activities Very broad; connects everywhere Narrow; only flies to selected cities
Organizational design
& implementation
Hub & spoke; high fixed costs
Point to point;lower, flexible costs;control costs Value Proposition
Dominant value
Differentiating value
Strategy Elements for Two Airlines
Element
American
Southwest
Value capture for profit Dominant hub city; requires high occupancy Requires high occupancy Value for talent
High pilot salaries; good career historically Participation in stock options & camaraderie
Business model ques<ons: What are we good at?
What is our secret sauce?
What is the source of compe**ve advantage?
Knowing and understanding the business model helps: Iden*fy customer pain points
Understand the leverage opportuni*es
Knowing whether your product is an aspirin or a vitamin
Develop the right selling strategy
Evolu<on of the Business Model Globaliza*on has facilitated the transfer of business models across geographic boundaries.
Technological advancements have fostered the development of new business models.
The large infusion of private capital into new ventures has helped to spur the crea*on of new, innova*ve business models.
Business models in SoKware
Revenue Source
• Product
• Tied product
• Web-based SW
• Service
15
• Support
• Advertising
• Data-mining
Distribution
Pricing
Timeframe
• Direct
• Retail
• OEM
• Per user
• Per CPU
• Per site
• Per use
• Perpetual
• Lease
• One-time
Examples in SoKware
• Microsoft Office
• Adobe Acrobat
• Oracle Siebel CRM
• Salesforce.com
• Red Hat
Revenue Source
• Product
• Tied product
•