Stepping stones

Market segmentation of customers

Customers

Consumer

Corporate

KnowledgeWorkers

Brand‘focus’

Increasing‘footprint’

Narrower‘audiences’

(size, geography,demographics)

Increasingcustomer focus

Business Consumer

Market and industry assessment

Defining the Business Model

Osterwalder, A. and Pugneur, Y. (2010) Business Model Generation, John Wiley & Sons.

Key partners

Who are your key partners – consider strategic alliances, co-opetitors, joint ventures and key suppliers.

Key processes

What are your key processes – consider product development, revenue generation, order fulfillment and after-sales support.

Key resources

What are your key resources – consider physical, financial, intellectual, human and information based resources.

Valueproposition

What is your value proposition? Why will customers buy from you?

Customerrelationships

What relationships are you building with your customers – acquisition, retention and cross-selling or upselling?

Customersegments

Which customer segments are you going to deal with – mass market, niche market, segmented?

Channels

What are your channels to market? Direct or indirect – stores and offices or web based?

Cost structure

What are the major drivers for your cost structure? What scope for economies of scope and scale? Can fixed costs be converted to variable?

Revenue streams

What are the revenue streams – sale of assets, usage fees, subscription fees, leasing or rental fees, licensing, brokerage, advertising?

PESTLE – what are the key drivers?

Political

Economic

Social

Technological

Legal

Environmental

So where and how do we start?

Idea Validate Implement

Due diligenceMarket researchBusiness plans

Research groupsIndividual academicsIndustry research

Family business – diversificationSocial needPersonal experienceResearch output

New ventureLicenceJoint venture with industry

New ventureNew projectNew DivisionSpin offAcquisition

Adapted from Shane and Venketaraman, 2000

Frameworks and Tools

Where are we now?

Examples of environmental influences

ENTERPRISE

Labour Market

Capital Markets

Competition

Government

Supplies

EcologyTechnology

Socio-cultural

Demographics

Economic factors and

restructuring

Purchasing Policy

Lobbying

Marketing Policy

Environmental sensing R&D policy

Demographic forecasting

Economic Forecasting

Financial policy

Labour policy & industrial relations

Source: Johnson & Scholes,

Strengths and Weaknesses

· Resources and capabilities

· Value chain activities

· Organizational design

· VRIO framework

Opportunities and Threats

· Macro environment

· Value systems

· PESTEL framework

· P5F framework

The SWOT framework

Sorensen 2012

Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?”Rarity: "Is control of the resource/capability in the hands of a relative few?”Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?”Organization: "Is the firm organized, ready, and able to exploit the resource/capability?"

VR

IO w

orks

heet

in h

ando

ut

A model for structural analysis

Source: Johnson & Scholes,

Value Chain

Understanding your position in the value chain

Influences the business and operational model

Sets the resources and capabilities required

Helps identify potential customers, suppliers, partners and competitors

Helps identify barriers to entry

Transactions, user experience, management

Content creatorsand developers

Content packagersand publishers

Meta-content creators, developers and packagers

Ad networks

Distribution servers/pumps

Distribution networks eg ISPs, Mobile Operators

Delivery devices

End usersAdvertisers

Content creation, packaging and publishing

Advertising

Media planners and buyers

User management tools

Operating System s/w

Content distribution and access provision

Airtime, Bandwidth, Purchase credits

TransactionsApplication s/w

Devices, software and applications

Example: Value Chain for Mobile Services

• Commission creation of rich media content

• Localisation of international content

• Packaging content for 3G mobile

• Advertising deals for revenue generation through portal

• Participation in Ad networks, interfaces

• Affiliate relationships with owners of mobile assets

• Licensing of technology for building server infrastructure

• Relationships with suppliers for infrastructure related services

• Develop/acquire billing engines for tracking, analytics

• Developer relationships with O/S vendors

• Agreements with manufacturers for pre-loading 3G VAS apps

• Partnerships/ co-promotion deals with application S/W vendors

• Integration deals with payment gateways, app exchanges

• Affiliate deals to generate traffic and promotions

• End user management, service customisation

Example – Semiconductor industry value chain

Example – Pharma industry value chain

NewTechnology

Sales,Manufacturing& Supply

Lead Identification& Optimisation

Drug DevelopmentTarget

Identification

Scale up &Launch

Pharmaceuticals

Technology-focused Biotech

Product-focused Biotech

Marketing & Distribution

New venture creation stages at the University - modelled on the value chain

Awareness InterestGenerate opportunities

IP negotiation Validation Emerging venture Funding Commercialisation Start-up

CfEL

CE

CfEL

Licence

Enterprise TuesdayEnterprisers ETECH - MBA ETECH - MBA E - in - R Angel community Local lawyers, accountants et al

Enterprise Champions IGNITE Investors IdeaSpace

Mentors VCs St Johns Innovation Centre

CUE CUE Cambridge AngelsScience Parks' management teams

CUTEC iTEAMS Angel community

MOTI

Downing College CIKC Alumni

Pembroke College Students' own ideas CE or outside Alumni

PGDE is not open to students on other courses

Where we want to go..

Blue Ocean Strategy

Courtesy – S Ansari

http://www.blueoceanstrategy.com/index.php

Noah’s Arc School of Business

Porter’s Generic Strategies

Market attractiveness – company strengthsLo

ng T

erm

Mar

ket

Att

ract

iven

ess

Strengths and capabilities

After - Johnson & Scholes,

Ansoff Matrix as a strategic tool

Existing

New

NewExisting

Ansoff

Mar

kets

/C

usto

mer

s

Products/ServicesTechnologies

Plastic Logic

ARM

Det

ail i

n H

ando

ut

Boston Consulting Group

Mar

ket

grow

th r

ate

AVR

H

L

Market share

?