BusinessModels(&BusinessModelling)

forSustainableDevelopment

AlessandroRossiforMasterCodeClass2

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today’sagenda• discussionofthepre-assignment• BM– HUH?• [shortbreak]• Q&A– longdiscussion• homeassignment

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sharingeconomy• Definition?

• Features?

• CategoriesofSh Ec business?

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Sh.Ec.&sustainability:Pros?• sharingiscaring– roleofcommunities• betteruseofresources– fromownershiptoaccess

• affordability/consumerism• reduceexternalities• supplementalincome

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Sh.Ec.&sustainability:Cons?• underservedneedsfromlow-incomesegments• newsharing-economydivide– Offerside->forvolumeandscale– Demandside->fordigitalliteracy

• ownershipandgovernanceofcommunities• privacyandsecurity• regulatorydisruption– informaleconomy– reducedjobbenefits,protections,security– unintendedconsequences

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homeassignment• takeoneexemplar,famouswell-knowcaseofsharingeconomy.

• describeinaparagraphtheirbusinessmodel• commentintheblogpostbeforenextclass

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Quiztime• Whatdohavethesebusinessesincommon:

• thesame businessmodel!

whatdotheyhaveincommon?

• thesame businessmodel!• matchmaking• “peer topeer transaction…”• consumermay become theproducer,andviceversa• disintermediation• collaborativeconsumption |peer production|etc.• value capture (profitability)frommatchmaking fees• iconic businessmodel:“we aretheAirbnb of…”

whatdotheyhaveincommon?

[Q]whatdotheyhaveincommon?

[Q]whatdotheyhaveincommon?

• thesame businessmodel!

[Q]whatdotheyhaveincommon?

• thesame businessmodel!• “give therazor away…”• “…andthey will comefortheblades!”• “leveraging complementary assets”• iconic businessmodel:“R&B”bm

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classexercise• thinkaboutyourcasestudy• compareitwiththe“standardwaytomakebusiness”

• e.g.,AirBnb vs.Hilton• dotheysolvethesameneed?• howdothedifferinsolvingit?• howdotheygeneratevalueforthecustomer?• howdotheydelivervaluetothecustomer?• howdotheycapturevalueforthecustomer?

[Q]businessmodel…huh?

[Q]businessmodel…huh?

businessmodel?

• it’s amodel(duh!)

businessmodel?

• it’s amodel(duh!)– simple– cognitiverepresentation– manipulable

• how afirm create,capture (anddeliver)value• insimplified abstract form

howdowedescribe/communicateit?

• withmodels• “models ofbusinessmodels”• two-times separated analysis

Value delivery

Value capture

Value creation

“models”ofbusinessmodel

• two schools ofthought– activity system perspective (Amit,Zott,Osterwalder,ecc.)

– cognitivesystem perspective (Haefliger,Aversa,Baden-Fuller,Magematin,ecc.)

wheredotheycomefrom?

• emerging,newmanagerial category• traditional wayof“doing business”:

“firms traditionally operated following similar logics,typical oftheindustrialfirm,inwhich aproduct /service—typically produced bythefirm (anditssuppliers)—is delivered toacustomer fromwhichrevenues arecollected.”(Tucci&Massa2014)

• moreandmorechallenged bynovel waysof“doing business”

easyboy!It’snotthatsimple!

• longarethedays of“simple”,“easy”businessmodels

• diverging trajectories forcreating andcapturing values

“novel”businessmodels

• innovation inthestandard“takemy money”BM• disrupting many traditional industries• 4 fundamental determinants:– internet&ICT– post-industrial technologies– newmarkets at thebasis ofthepyramid– socialinnovation

InterneteICT

• e.g.:Amazon,Linkedin,socialgaming• newwaysofcreating,delivering,capturing v.• hottopics:– disintermediation– newinfo-based intermediation– increasing user baseand“longtail markets”– co-creation ofinnovation

post-industrialtechnologies

• e.g.,software,biotech,material sciences• division oflabor– es.:SaaS

• Innovation “finds its [new]way”:– OpenSourcesoftware/hardware– IPRmarkets– OpenInnovation

• …

newmarketsatthebasisofthepyramid

• still unexplored markets• 2/3worldpop• newdiscovery:“poors”as consumers,notvictims

• businessmodelinnovation:– co-creation (solutions arealready outthere)– public/privatealliances– etc.

BoP – inapicture

many different BoPs [1]

many different BoPs [2]

e.g.Aranvid

socialinnovation[1]

• businessinnovationisgenerallymotivatedbyprofitmaximizationanddiffusedthroughorganizationsthatareprimarilymotivatedbyprofitmaximization.

• socialinnovationreferstoinnovativeactivitiesandservicesthataremotivatedbythegoalofmeetingasocialneedandthatarepredominantlydiffusedthroughorganizationswhoseprimarypurposesaresocial[GeoffMulgan,2006]

socialinnovation[2]

• e.g.:Grameen Bank microcredit,fairtrademovement,Kiva donor-recipient platform,ecc.

• traditional businessmodels:– subsidized (welfare-state)BM– donor-based BM

• toself-sustainable /profitable businessmodels

• targeting

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wrap-up

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homeassignment