Business Model Innovation
BUS305 BUSINESS MODEL DESIGN AND IMPLEMENTATION
Innovating with the Business Model Canvas
Asia Pacific College of Business and Law
Emmanuel Tenakwah
08 November 2022
CRICOS Provider No. 00300K (NT/VIC) I 03286A (NSW) | RTO Provider No. 0373
1
2
Recognition of Traditional owners and Indigenous cultures
Charles Darwin University acknowledges the traditional custodians of the land on which we’re meeting and pays respect to Elders both past and present and extends that respect to all Aboriginal and Torres Strait Islander people.
Understand the use of the business model canvas in ideation and innovation
Understand the key elements of the business model canvas
Analyse business models of existing businesses
3
Objectives
3
Introduction
4
The key to using the BMC for ideation is that it’s best to start with your current business model. In other words, if you’re starting from zero, there are probably better methods for ideation.
4
Poorly thought-out business models were the downfall of many dotcoms.
Business model dates to the earliest days of business; it merely describes the way in which a company makes money.
While there are plenty of great methodologies and frameworks, like open brainstorming and the Creative Matrix, designed specifically for ideation, the BMC can also be a powerful tool to get the creative (ideation) juices flowing.
Business model is a buzzword that everybody used (or overused) during the dotcom boom.
5
Business Model Canvas (BMC)
BMC is a tool to describe and visualise how a business creates, delivers and captures value in an easy-to-understand, one-page document.
It’s a way to organise and present assumptions regarding the nine interrelated building blocks.
BMC maps a story of how the nine interrelated and essential business components provide a business strategy and lean startup innovation template.
6
Business Model Canvas (BMC)
Whether a company is a startup or an established business, using the BMC for innovation is an effective method to find a competitive advantage.
BMC is useful for mapping existing business models to visualise and explain what currently happens.
The approach can also be taken to map out competitors to understand the ‘current state’, differences, and similarities and identify some opportunities.
BMC can also be used to manage an innovation portfolio or pipeline.
7
Business Model Canvas (BMC)
There are several key benefits to the Business Model Canvas:
Clarity
Communication
Collaboration
Risk reduction
Proven innovation model Customer-centric
Simple, not simplistic
Speed
Benefits of the Business Model Canvas
There are several key benefits to the Business Model Canvas:
Clarity – The BMC provides a clear picture of either your current business model or the business model that you are innovating towards.
Communication – Having everyone on the same page is essential in any transformation or innovation process, and the BMC is an ideal way to communicate essential information to all stakeholders. Think of it as a living, one page business plan.
Collaboration – Now that your team have clarity and a standard communication tool, the BMC allows a unifying platform to collaborate on ideas. Ideas can easily be mapped and explored in a matter of minutes.
Risk reduction – Building a startup or innovating an existing business is risky. The BMC, helps to understand the risks and prioritise the riskiest factors to then approach validation in a logical way to minimise risk.
Proven innovation model – The Business Model Canvas has been around for about 15 years, and during that time, thousands of companies have used the BMC for innovation. The BMC has become a standard tool for innovation and strategy.
Customer-centric – It’s no surprise that the Value Proposition is in the centre of the canvas. When designing your BMC, also use the Value Proposition Canvas (VPC) to oscillate or zoom in and out between the BMC and the VPC. Doing so helps to continually evolve a BMC from within the lens of ‘creating value for the business’ and creating value for the customer’.
Simple, not simplistic – You don’t need an MBA to pick up the BMC and start to innovate. The critical approach is to make your business model visual, ideate, test and learn as you innovate and develop a business model with competitive advantage.
Speed – Given the simplicity and practicality of the BMC, many iterations can be made in a short space of time.
8
8
9
9
Understand the use of the business model canvas in ideation and innovation
Understand the key elements of the business model canvas
Analyse business models of existing businesses
10
Objectives
10
11
11
12
Value proposition
What distinguish your business from the competitor? What is the value you provide the customer?
Newness
Performance
Customization
"getting the job done”
Design
Brand/status
Price
Risk Reduction
Convenience/usability
13
Value Proposition
14
Customer Segments
Who are your main customers?
Mass Market
Niche
Segments
Multi-Sided
15
Channels
How do you distribute the value proposition to your customers?
Online
Retail Stores
Partners
App
16
Customer Relationship
What is the relationship the business has with its customers?
Personal Assistance
Dedicated Personal Assistance
Self Service
Automated Services
Communities
Co-creation
17
Key Activities
The most important activities in executing a company's value proposition
Developing and maintaining the platform
Logistics
Marketing
18
Key Resources
The resources that are necessary to create value for the customer
Human
Financial
Physical
Intellectual
19
Key Partners
Which partners are necessary for making the business work?
Musicians
Music Producers
20
Revenue Stream
How the company makes income
Selling a product
Usage Fee
Subscription
Renting/Leasing
Licensing
Brokerage Fees
Advertising
21
Cost Structure
What are the cost associated with running the business and how does it scale with sales
Fixed Costs
Variable Costs
Economies of Scale
Economies of Scope
Cost-Driven vs. Value-Driven
Understand the use of the business model canvas in ideation and innovation
Understand the key elements of the business model canvas
Analyse business models of existing businesses
22
Objectives
22
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Content Providers
Advertising sales and analytics
Users
Brand
Platform
Platform development and maintenance
Connect with friends, share content …
Reach a specific target group with your advertising
Facebook adds,
Facebook pages
Online
Internet Users
Advertisers and marketers
Small businesses
Add Revenue
Bandwidth
Sales
Platform
24
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Content owners
Content Providers
Distribution platform
Easy access to content when you want it
Online
People who binge watch tv shows
Digital platform
Subscription
Royalties
Salaries
Bandwidth
25
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Travel networks
Platform maintenance
Brand
Cheap way of getting an unique travel experience
Online
Online community
Travelers
% Fee
Platform costs
Home owners
Phone support
Insurance
Platform
Customer support
Payment providers
Rent out your extra space
26
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Publishers
Maintaining platform
Warehouses
Price
Online Platform
Amazon.com
Sales
Platform, Logistics, Marketing, Physical Storage,
Suppliers and manufacturers
Network of sellers
Logistics
Marketing
Brand
Platform
Selection
Convenience/Speed
Mass market
Online and phone support
Commission on sales
Subscription
27
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Payment providers
Marketing
Platform development
Support
Brand
Trust
Platform
Exchange money from one currency to another at better rates
Online support
Web platform
People living/working abroad
Frequent users of exchange services
% Fee
Platform development
Support
Insurances
28
29
Key Activities
Key Partnership
Key Resources
Cost Structures
Revenue Streams
Value Propositions
Customer
Relationships
Channels
Customer Segments
Suppliers
Appliance producers
Production
Logistics
Sales
Price
Simplicity
Customization
Convenience
Brand
Physical Resources
Communities
Self-service
IKEA
Web sales
Individuals
Businesses
Product sales
Production
Marketing and sales
29
This session has discussed how to Innovate with the Business Model Canvas. Specifically, we have:
Discussed the use of the business model canvas in ideation and innovation
Discussed the key elements of the business model canvas
Analysed business models of existing businesses
30
Summary
30
This session has discussed Business Model Innovation in Digital Age. Specifically, we have:
Discussed opportunities and threats presented by digital platforms
Discussed the process of developing a business model innovation strategy
Discussed strategic implications of business model innovation
31
Summary
31
Three things I have enjoyed today are?
Three new things you learnt (What you didn’t know before the class)
What do you like to know more about?
32
Logging off
32
We will discuss Innovation with the Business Model Canvas.
33
Next Week
Read: Chapter 12 of the text and the weekly list of activities on learnline
33