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Despite the recent proliferation in business model representation, business model visualization is relatively poor and still fraught with many problems. I’ve observed 10 Business Model Problems, each problem of which has been solved by the “3-Act Business Model Network,” a simple and information-rich platform for visualizing, organizing, integrating, discussing, innovating on, testing, evaluating, benchmarking, and managing business models as well as stories. In brief, the 3-Act Business Model Network provides an all-in-one platform for facilitating not only business model prototyping, strategy, validation, and execution but also story prototyping, testing, and management. Using the “rich” 3-Act Business Model Network, you could achieve great savings in time, cost, and energy while holistically prototyping and managing business models as well as inspirational stories of change. To facilitate use of the 3-Act Business Model Network, the tool is applied to the business model of Apple’s iPod; see http://goo.gl/zdZ05f Below is a list of 10 problems that plague other representations of a business model. #1: TOWER-OF-BABEL Problem #2: BUILDING BLOCK OVERLOAD Problem #3: INCOHERENT BUSINESS-MODEL-LOGIC Problem #4: REVERSE-INCOME-STATEMENT Problem #5: ASSUMPTION-FORMULATION-AND-TESTING Problem #6: PERFORMANCE-MANAGEMENT Problem #7: EXTERNAL BUSINESS MODEL INTEGRATION Problem #8: HOLISTIC BUSINESS MODEL Problem #9: UNILEVEL BUSINESS MODEL Problem #10: SHARED-VALUE Problem
Citation preview
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Innovator
Marketer
Accountant
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Innovator
Marketer
Accountant
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
JOB TO GET DONE
Sa*sfy Demand Create Demand Generate Profit
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Innovator
Marketer
Accountant
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
JOB TO GET DONE
Sa*sfy Demand Create Demand Generate Profit
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Innovator
Marketer
Accountant
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Innovator (Product)
Marketer (Customer)
Accountant (Profit)
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
Product/Value ProposiUon q iPod Hardware
q “A Thousand Songs in Your Pocket”
Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers
Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage
Inputs/Partners q Original Equipment Manu. q Record Companies
Internal Resources q Staff/Employees q Brand/Culture q IP
Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales
Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions
PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
Product/Value ProposiUon q iPod Hardware
q “A Thousand Songs in Your Pocket”
Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers
Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage
Inputs/Partners q Original Equipment Manu. q Record Companies
Internal Resources q Staff/Employees q Brand/Culture q IP
Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales
Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions
PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
Product/Value ProposiUon q iPod Hardware
q “A Thousand Songs in Your Pocket”
Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers
Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage
Inputs/Partners q Original Equipment Manu. q Record Companies
Internal Resources q Staff/Employees q Brand/Culture q IP
Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales
Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions
PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
(Problem
-‐SoluQ
on Fit; Produ
ct-‐M
arket F
it)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
Product/Value ProposiUon q iPod Hardware
q “A Thousand Songs in Your Pocket”
Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers
Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage
require(s) delight(s)
require(s) delight(s)
Inputs/Partners q Original Equipment Manu. q Record Companies
Internal Resources q Staff/Employees q Brand/Culture q IP
require(s) affect(s)
require(s) deliver(s)
drive(s)
requires
delights
Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales
Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions
PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD for Apple’s Classic iPod An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
Product/Value ProposiUon q iPod Hardware
q “A Thousand Songs in Your Pocket”
Channels & RelaUonships q www.apple.com q Apple Retail Stores q iTunes Store q Big Box Retailers
Customer/Job-‐To-‐Get-‐Done q Luxury SpoDer q “Blue Ocean” XP q Listen to Music Everywhere q Bulky players; small storage
require(s)
require(s)
Inputs/Partners q Original Equipment Manu. q Record Companies
Internal Resources q Staff/Employees q Brand/Culture q IP
require(s) affect(s)
require(s) deliver(s)
drive(s)
requires
delights
Processes/AcUviUes q Luxury Spot Strategy q Hardware Design q SoPware Design q MarkeQng & Sales
Revenue (Delight): High Items (Sources/Streams) q iPod Hardware q iTunes Store q Commissions
PROFIT (VALUE): High q High Profit Margin q Extraordinary Profit q Luxury Spot Strategy Ent. Industry: Music (Share)
Cost (Pain): High Items (Structure) q Staff/Employees q Manufacturing q MarkeQng & Sales
delight(s)
delight(s)
“[A] business model makes it possible for you to gain a comprehensive and realisQc understanding of how to make money.” Larry Bossidy and Ram Charan in the book, “ConfronQng Reality”
Why Use “Business Model” As Unit of Analysis?
Law of the 3-‐Act Business Model Although Stories, Businesses, Business Models, Living Systems, and Other OrganizaUons Appear Different on the Surface, Every Story, Enterprise, Business Model, Living System, or OrganizaQon on the Planet Has the Same Fractal “DNA” Structure Which Consists of a Network of 3 “Acts” or Sub-‐models: v Value CreaUon Act: System
v Value ProposiUon Act: Environment (Local/Global)
v Value Sharing (Profit) Act: Impact or Trade-‐off (Pain; Delight)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
ENVIRONMENT (Local/Global)
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
SYSTEM (Object/Tool/Business Model)
ENVIRONMENT (Local/Global)
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
3-‐ACT BUSINESS MODEL
ENVIRONMENT (Local/Global)
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
ENVIRONMENT (Local/Global)
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
Innovator’s PerspecQve
Marketer’s PerspecQve
Investor’s PerspecQve
ENVIRONMENT (Local/Global)
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
FITNESS? FITNESS?
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
Innovator’s PerspecQve
Marketer’s PerspecQve
Investor’s PerspecQve
FITNESS?
Product Customer Profit
ENVIRONMENT (Local/Global)
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: How?
VALUE PROPOSITION MODEL: What?
VALUE SHARING (PROFIT) MODEL:
Why?
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: How?
VALUE PROPOSITION MODEL: What?
VALUE SHARING (PROFIT) MODEL:
Why?
Bargaining Pow
er of Sup
pliers
Bargaining Pow
er of C
ustomers
Threat of New Entrants
Threat of SubsUtute Products or Services
Porter’s 5 Forces for Industry Profitability & Fitness Analysis
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: How?
VALUE PROPOSITION MODEL: What?
VALUE SHARING (PROFIT) MODEL:
Why?
4 Global Environment Forces for External Fitness Analysis Indu
stry Ecosystem
(IE): Sup
ply
Market E
cosystem
(ME): D
eman
d
Key Trends & Complementors (KTC): PESTLIED (-‐/+)
Macro-‐Economic Influencers (MEI): Global Economy
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: How?
VALUE PROPOSITION MODEL: What?
VALUE SHARING (PROFIT) MODEL:
Why?
SWOT Analysis W: W
EAKN
ESSES (-‐)
S: STR
ENGTH
S (+)
O: OPPORTUNITIES (+)
T: THREATS (-‐)
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: How?
VALUE PROPOSITION MODEL: What?
VALUE SHARING (PROFIT) MODEL:
Why?
“E.R.I.C.” Value InnovaDon TacDcs E: Elim
inate
I: In
crease
C: Create
R: Reduce
Law of the 3-‐Act Business Model: Storyboard of Paradigm for Universal System Modeling
DisrupDon Spot
Luxury Spot
Strategic Choice
Sweet Spot Profit Model/ Strategy/
Value Proposi*on
Blue Ocean Profit Model/ Strategy/
Value Proposi*on
Luxury Spot (“Differen*a*on”) Profit Model/ Strategy/
Value Proposi*on
DisrupUon Spot/Lean (“Low Cost”) Profit Model/ Strategy/
Value Proposi*on
4 BUSINESS PROFIT MODELS, WINNING STRATEGIES, AND VALUE PROPOSITIONS
Trade-‐off Map of Cost vs. Revenue
(-‐): PAIN: Cost (Size; Complexity; Inaccessibility; Delay)
(+): DELIGHT: Revenue
(Performance; Quality; Brand;
Customiza*on)
Key Profitable Model Unprofitable Model
#VPGen. Dr. Rod King. [email protected] & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing
Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): ………………..…..……..…….………… ……………………………………………………………………….…………….………….……………….
“Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
DisrupDon Spot
Luxury Spot
Strategic Choice
Sweet Spot Profit Model/ Strategy/
Value Proposi*on
Blue Ocean Profit Model/ Strategy/
Value Proposi*on
Luxury Spot (“Differen*a*on”) Profit Model/ Strategy/
Value Proposi*on
DisrupUon Spot/Lean (“Low Cost”) Profit Model/ Strategy/
Value Proposi*on
Apple iPod’s GENERIC PROFIT MODEL, WINNING STRATEGY, AND VALUE PROPOSITION Trade-‐off Map of Cost vs. Revenue
(-‐): PAIN: Cost (Size; Complexity; Inaccessibility; Delay)
(+): DELIGHT: Revenue
(Performance; Quality; Brand;
Customiza*on)
Key Profitable Model Unprofitable Model
#VPGen. Dr. Rod King. [email protected] & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing
Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music
“Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
DisrupDon Spot
Luxury Spot
Strategic Choice
Sweet Spot Customer Experience
Blue Ocean Customer Experience
Luxury Spot Customer Experience
DisrupUon Spot/Lean Customer Experience
CUSTOMER EXPERIENCE, VALUE PROPOSITION, JOB-‐TO-‐GET-‐DONE, AND (VALUE) FACTORS Trade-‐off Map of Customer Pain vs. Customer Delight
(-‐): PAIN: Cost; Size; Complexity; Inaccessibility; Delay
(+): DELIGHT:
Func*onality; Performance;
Quality; Brand;
Customiza*on
Key Valuable Experience Non-‐valuable Experience
#VPGen. Dr. Rod King. [email protected] & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing
Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music
“Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
DisrupDon Spot
Luxury Spot
Strategic Choice
Sweet Spot Customer Experience
Blue Ocean Customer Experience
Luxury Spot Customer Experience
DisrupUon Spot/Lean Customer Experience
CUSTOMER EXPERIENCE, VALUE PROPOSITION, AND JOB-‐TO-‐GET-‐DONE for Apple’s iPod Trade-‐off Map of Customer Pain vs. Customer Delight
(-‐): PAIN: Size; Complexity
(+): DELIGHT:
Func*onality; Performance (Storage); Quality; Brand;
Customiza*on
Key Valuable Experience Non-‐valuable Experience
#VPGen. Dr. Rod King. [email protected] & hDp://businessmodels.ning.com & hDp://twiDer.com/RodKuhnKing
Market Segment (Job-‐To-‐Get-‐Done/Goal; Product/Tool): Entertainment Industry (Music): Listen to music
“Insane” Happiness (Value) Ideal Final Result (IFR) Infinite Shared Happiness “Invisible Hand”
“Businesses will increasingly find themselves dealing with external forces they didn’t foresee. To seize opportuniQes or defend themselves, they’ll have to change faster and more oPen. But what should a business change? How much should it change, how soon and how fast?” Larry Bossidy and Ram Charan in the book, “ConfronQng Reality”
What to Change?
More …
q HOLISTIC BUSINESS-‐MODEL Problem
q UNILEVEL BUSINESS-‐MODEL Problem
q SHARED VALUE Problem
INCOHERENT BUSINESS-‐MODEL-‐LOGIC Problem Logical relaQonships of how a business makes money are either incoherent or not shown in nearly all representaQons of a business model. ExisQng business model diagrams are staQc.
ASSUMPTION-‐FORMULATION-‐AND-‐TESTING Problem The process of formulaQng and tesQng assumpQons (hypotheses/proposal/ plans) of a business model is currently unsystemaQc and whimsical.
EXTERNAL BUSINESS-‐MODEL-‐ INTEGRATION Problem ExisQng business model representa-‐Qons do not easily integrate with the large body of knowledge in Strategic Management, Startups, Product InnovaQon, and Project Planning.
BUILDING-‐BLOCK-‐OVERLOAD Problem It is brain-‐unfriendly to present 9 or more building blocks at a single level. Many people feel overwhelmed and cannot remember to reproduce the building blocks of a business model.
10 BUSINESS MODEL PROBLEMS THAT YOU CAN IMMEDIATELY
ELIMINATE
Use 3-‐Act Business Model Storyboard to Solve the Following Problems …
PERFORMANCE MANAGEMENT Problem Nearly all business model diagrams are not directly integrated with the tool of the Balanced Scorecard. Business model diagrams are hardly used for managing business model performance.
TOWER-‐OF-‐BABEL Problem Too many “unique” frameworks and languages for business model visualizaQon. The frameworks are oPen contradictory and don’t speak to each other.
REVERSE-‐INCOME-‐STATEMENT Problem Most diagrams of business models do not explicitly contain “Profit” as a building block. This makes it difficult to focus on designing for profit as well as preparing a Reverse Income Statement.
10 BUSINESS MODEL PROBLEMS THAT YOU CAN IMMEDIATELY ELIMINATE An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
“A Business Model Prototype Is
A Thousand Times More Cost-‐Effec*ve Than
A Business Plan”
Business Model Prototype vs. Business Plan
Appendix
MulUlevel VisualizaUon of The 3-‐Act Business Model Storyboard
q Bird’s Eye View (Macro-‐Logic of Business Model)
q Eagle Eye’s View (Meso-‐Logic of Business Model)
q Worm’s Eye View (Micro-‐Logic of Business Model)
ENVIRONMENT (Local/Global)
IMPACT or TRADE-‐OFF (-‐/+)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
FITNESS?
FITNESS? FITNESS?
3-‐ACT BUSINESS MODEL STORYBOARD
Innovator’s PerspecQve
Marketer’s PerspecQve
Investor’s PerspecQve
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
3-‐ACT BUSINESS MODEL STORYBOARD Bird’s Eye View (Business Model Chain: Macro-‐Logic)
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Business Model Tree – Hierarchical Decomposi*on of Macro-‐Logic)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
Inputs/Partners
Internal Resources
Processes/AcUviUes
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
Inputs/Partners
Internal Resources
Processes/AcUviUes
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
Inputs/Partners
Internal Resources
Processes/AcUviUes
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE)
(Problem
-‐SoluQ
on Fit; Produ
ct-‐M
arket F
it)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
require(s)
require(s)
Inputs/Partners
Internal Resources
Processes/AcUviUes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network: Meso-‐Logic)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
require(s)
require(s)
Inputs/Partners
Internal Resources
Processes/AcUviUes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of the MarkeDng Mix: 4Ps of MarkeDng)
Product/Value ProposiUon q Product
Channels & RelaUonships q Place q PromoUon
Customer/Job-‐To-‐Get-‐Done
require(s)
require(s)
Inputs/Partners
Internal Resources
Processes/AcUviUes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight) q Pricing
PROFIT (VALUE)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Kaplan & Norton’s Balanced Scorecard)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done q Customer PerspecQve
require(s)
require(s)
Inputs/Partners
Internal Resources q Learning and Growth
PerspecQve
Processes/AcUviUes q Process PerspecQve
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE) q Financial PerspecQve
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Michael Porter’s Value Chain)
Product/Value ProposiUon
Channels & RelaUonships q Outbound LogisDcs q MarkeDng & Sales q Service
Customer/Job-‐To-‐Get-‐Done
require(s)
require(s)
Inputs/Partners q Inbound LogisDcs
Internal Resources q Firm Infrastructure q Human Resource Mngt q Technology Development q Procurement
Processes/AcUviUes q OperaDons
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE) q Profit Margin
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Business Model Network – Elements and Shared Value Logic of Rod King’s “S.E.M.P.O.R.C.E.S.” Chain)
Product/Value ProposiUon q Output/Product (O)
Channels & RelaUonships q Retailers/Distributors/ Channels (R)
Customer/Job-‐To-‐Get-‐Done q Customers/Consumers (C)
require(s)
require(s)
Inputs/Partners q Suppliers/Inputs (S)
Internal Resources q Employees (E) q Machinery/Equipment (M)
Processes/AcUviUes q Process (P)
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE) q Shared Value (S)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Osterwalder & Pigneur’s Business Model Canvas)
Product/Value ProposiUon q Value ProposiUon (VP)
Channels & RelaUonships q Channels (CH) q Customer RelaUonships (CR)
Customer/Job-‐To-‐Get-‐Done q Customer Segment (CS)
require(s)
require(s)
Inputs/Partners q Key Partners (KP)
Internal Resources q Key Resources (KR)
Processes/AcUviUes q Key AcUviUes (KA)
require(s) affect(s)
require(s) deliver(s)
Cost (Pain) q Cost Structure (C$)
Revenue (Delight) q Revenue Streams (R$)
PROFIT (VALUE)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Ash Maurya’s Lean Canvas)
Product/Value ProposiUon q Unique Value ProposiUon q SoluUon
Channels & RelaUonships q Channels
Customer/Job-‐To-‐Get-‐Done q Customer Segment q Problem (Trade-‐off)
require(s)
require(s)
Inputs/Partners
Internal Resources q Unfair Advantage
Processes/AcUviUes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain) q Cost Structure
Revenue (Delight) q Revenue Streams
PROFIT (VALUE) q Key Metrics
requires
drive(s)
delights
delight(s)
delight(s)
(Problem
-‐SoluQ
on Fit; Produ
ct-‐M
arket F
it)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Mark Johnson’s 4-‐Box Business Model)
Product/Value ProposiUon q Customer Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done
require(s)
require(s)
Inputs/Partners
Internal Resources q Key Resources
Processes/AcUviUes q Key Processes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain)
Revenue (Delight)
PROFIT (VALUE) q Profit Formula
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Bossidy & Charan’s Business Model)
Product/Value ProposiUon
Channels & RelaUonships
Customer/Job-‐To-‐Get-‐Done q Customer Base (Needs)
require(s)
require(s)
Inputs/Partners
Internal Resources q People: Team q OrganizaUon
Processes/AcUviUes q Strategy q OperaUons q IteraQon;Root-‐cause analysis q Environment Scan: SWOT
require(s) affect(s)
require(s) deliver(s)
Cost (Pain) q Capital Intensity
Revenue (Delight) q Revenue Growth
PROFIT (VALUE) q OperaUng Margin q Cash Flow q Return on Investment q (Financial History: Fit)
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
3-‐ACT BUSINESS MODEL STORYBOARD Eagle’s Eye View (Generic Business Model Network – Elements and Profit Logic of Malik’s Enterprise Architecture Model)
Product/Value ProposiUon q Value ProposiUon q Products & Services
Channels & RelaUonships q Channels q Customer Demands &
RelaUonships
Customer/Job-‐To-‐Get-‐Done q Customer Type q Customer
require(s)
require(s)
Inputs/Partners q Partner Type q Business Partner
Internal Resources q Required Competency q Resource/Asset
Processes/AcUviUes
require(s) affect(s)
require(s) deliver(s)
Cost (Pain) q Cost Model
Revenue (Delight) q Revenue Model
PROFIT (VALUE) q Profit Model
requires
drive(s)
delights
delight(s)
delight(s)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
delivers
requires
drives
requires
Product/Value ProposiUon (P/VP)
Channels & RelaUonships (CH/CR)
Customer/Job-‐To-‐Get-‐Done (CS/JTGD)
require(s)
require(s)
Inputs/Partners (I/KP)
Internal Resources (IKR)
Processes/AcUviUes (P/KA)
require(s) affect(s)
require(s) deliver(s)
Cost (Pain) (C$)
Revenue (Delight) (R$)
PROFIT (VALUE) (P$)
drive(s)
requires
3-‐ACT BUSINESS MODEL MODEL STORYBOARD An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
delights
delight(s)
delight(s)
3-‐ACT BUSINESSMODEL
VALUE CREATION MODEL
VALUE PROPOSITION MODEL
VALUE SHARING (PROFIT) MODEL
I/KP IKR P/KA P/VP CH/CR CS/CJTGD C$ R$ P$
I/KP -‐
IKR -‐
P/KA -‐
P/VP -‐
CH/CR -‐
CS/JTGD -‐
C$ -‐
R$ -‐
P$ -‐
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
From -‐> To
I/KP: Inputs/Partners IKR: Internal Resources P/KA: Processes/AcQviQes
P/VP: Product/Value ProposiQon CHCR: Channels & RelaQonships CS/JTGD: Customer/Job-‐To-‐Get-‐Done
C$: Cost (Structure) R$: Revenue (Streams) P$: Profit
Key
3-‐ACT BUSINESS MODEL STORYBOARD Worm’s Eye View (Business Model Network of Rela*onships: Micro-‐Logic of Input-‐Output Matrix/“Concept Map”)
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
VALUE CREATION MODEL: COST REDUCTION
VALUE PROPOSITION MODEL: REVENUE INCREASE
Inputs/Partners q Co-‐creaQon; Social Media q Open Source CollaboraQon q Crowd-‐funding/sourcing q FracQonalizaQon/Co-‐owner q Investor/Sponsor/Donor q Mergers & AcquisiQons
Internal Resources (Physical/Intellectual/Emo*onal/Spiritual Resources) q Creator; Broker; Landlord q Peer-‐to-‐Peer Plaoorm q Facilitated Network q Patents (“Fences”; Barriers)
Processes/AcUviUes q OperaQonal Excellence; JIT q AutomaQon (Self-‐service/DIY) q GamificaQon; DigitalizaQon q Ecosystem Management q Problem Solving; ConsulQng q CompeQQve Strategies
Product/Value ProposiUon q Asset Sale/Direct Sale q Product Leadership/Extension q Used/2nd Hand Product; Bargain q CustomizaQon (Value Factors) q Bundling/Unbundling q Product/SoPware as a Service
Channels & RelaUonships q Offline/Online; (In)direct Sale q Franchise; Licensing; Affiliates q Distributor; Disintermediator q Ad Network; Brand MulQplier q AggregaQon/DisaggregaQon q AucQon/Reverse AucQon
Customer/Job-‐To-‐Get-‐Done q Customer InQmacy/Loyalty q B2B; B2C q Long Tail; Community (Hub) q Two-‐sided Market (Segments) q MulQ-‐sided Market (Plaoorm) q Luxury/Mass Market/Niche
Cost (Pain) q Outsourcing; SpecializaQon q Group Deals q Lending/RenQng/Leasing q Cross-‐subsidizaQon q FracQonalizaQon/Co-‐owner
Revenue (Delight) q Pre-‐payment; AmorQzaQon q Discount; Dynamic Pricing q Razor Blade (“Bait & Switch”) q Usage Fee; SubscripQon Fee q Tiered Payment; Freemium q DonaQon; Free
PROFIT (VALUE) q Shared Value (Profit) q Transient CompeQQve Adv. q Sustainable CompeQQve Adv. q Red Ocean; Low Cost/Margin q Blue Ocean; Luxury Spot q DisrupQve InnovaQon Spot
PROFIT MODEL: PROFIT INCREASE
Business Profit Management (Pagerns/Tac*cs) 51 BUSINESS PROFIT PATTERNS
(Business Profit Innova*on for Compe**ve Advantage)
BUSINESS DNA MAP: A Visual Framework for Unified Strategic Planning & Management
‘Jigsaw Puzzle’ of Business Modeling Ontology for Living Systems
S E M P O R C E S Suppliers/ Inputs
Employees/ Culture/ Brand/IP
Machinery/ Technology/ Infra’
Processes/ Strategies
Output: Product/ Service
Retailers/ Distributors/ Channels
Customers/ Consumers (Care/Support)
Environ-‐ment
Shared Greatn./ Impact
Partners (Suppliers/Materials/ Info/Energy)
Key Resources AcQviQes (Processes)
Value ProposiQon (Jobs To Get Done)
Customer RelaQonship Management
Industry/ Gov.
SHARED VALUE/ PROFIT (Pain: -‐ Delight: +
CAPABILITIES: CORE COMPETENCIES LOCAL ENVIRONMENT (Demand)
GLOBAL ENV. (Trends)
ENTERPRISE (SYSTEM/Supply: Inside the Enterprise)
Design
Needs
Aspiratns
ECOSYSTEM (PLANET/ECONOMY/FOREST; SPECIES; INDUSTRY/SUPPLY CHAIN/VALUE CHAIN)
GLOBAL COMPETI-‐TIVE FORCES
COMPE-‐TITIVE ADVAN-‐TAGE
INPUT PROCESSING OUTPUT EXTERNAL ENVIRONMENT RESULT (Impacts/ Effects) BUSINESS SYSTEM (Cause)
BUSINESS DNA MAP: Global 3-‐Act Business Model (G3BM) Storyboard
D N A
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Global 3-‐Act Business Model (G3BM) Storyboard: Fractal Hierarchy for Business Model Fitness
Environment
Business Model (3-‐Act)
World (Global)
NaUon (Economy/ Value Network)
Industry
Sector (Locality/Supply Chain)
Region
Supp
liers
Custom
ers
SubsQtutes (In/Direct Compe*tors)
New Entrants (Poten*al Compe*tors)
W: W
EAKN
ESSES (-‐)
S: STR
ENGTH
S (+)
O: OPPORTUNITIES (+)
T: THREATS (-‐) #VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Environment
Business Model (3-‐Act)
World (Global)
NaUon (Economy/ Value Network)
Industry
Sector (Locality/Supply Chain)
Region
Supp
liers
Custom
ers
SubsQtutes (In/Direct Compe*tors)
New Entrants (Poten*al Compe*tors)
Macro-‐Economic Forces (MEF): Global Economy
Indu
stry Ecosystem
(IE): Sup
ply
Market E
cosystem
(ME): D
eman
d
Key Trends & Complementors (KTC): PESTLIED
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Global 3-‐Act Business Model (G3BM) Storyboard: Fractal Hierarchy for Business Model Fitness
Past Reality Business Model
Present Reality Business Model
Future Reality Business Model
Global 3-‐Act Business Model (G3BM) Plan
An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Strategy
Short/Medium/Long-‐term
WHAT to change? TO WHAT to change?
WHY change?
HOW to change?
Past Reality (“As Was”)
Business Model
Present Reality (“As Is”)
Business Model
Future Reality (“To Be”)
Business Model
Bus. Model (3-‐Act)
Bus. Model (3-‐Act)
Bus. Model (3-‐Act)
Industry Ecosystem
Market Ecosystem
Business Model (3-‐Act)
Macro-‐Economic Influencers
Key Trends & Complementors
Mission/Vision/Purpose/Ideals/ Ideal Final Result For Business Model
#VPGen. Dr. Rod King. [email protected] & h:p://businessmodels.ning.com & h:p://twi:er.com/RodKuhnKing
Strategy Short/Medium/Long-‐term
Global 3-‐Act Business Model (G3BM) Plan
An Informa*on Rich Pla1orm for Rapid Business Model Prototyping, Strategy, Valida*on, and Execu*on