Business Model and Innovation Concepts
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Questions and Answers

What is the primary objective of margin masters in business models?

  • To eliminate competition entirely
  • To achieve higher margins than competitors through value capture (correct)
  • To focus solely on customer satisfaction
  • To minimize costs regardless of the value provided

    • The business design loop consists of four stages: Ideation, Prototype, Assessment, and Testing.

    True

    What is the purpose of the prototype stage in the business design loop?

    To develop a tangible representation of the business model and highlight changes made.

    The four types of hypotheses developed in the testing phase are desirability, feasibility, viability, and _____ .

    <p>adaptability</p> Signup and view all the answers

    Match the following business model elements with their descriptions:

    <p>Ideation = Generate multiple business model possibilities Prototype = Develop a tangible representation of the business model Assessment = Evaluate feasibility, desirability, and adaptability Testing = Conduct experiments to validate key assumptions</p> Signup and view all the answers

    Which of the following is NOT a step in the ADKAR model?

    <p>Execution</p> Signup and view all the answers

    The rolling approach to roadmapping does not require regular updates.

    <p>False</p> Signup and view all the answers

    What does the PDCA cycle stand for?

    <p>Plan-Do-Check-Act</p> Signup and view all the answers

    The primary purpose of roadmapping is to communicate __________ and outcomes to all stakeholders.

    <p>timelines</p> Signup and view all the answers

    Match the following change management methods to their descriptions:

    <p>Kuber-Ross Change Curve = Supports individuals through emotional responses to change ADKAR model = Addresses critical elements of change PDCA Cycle = Continuous improvement process ISO9001 = Ensures quality management</p> Signup and view all the answers

    What does WTP stand for in business terminology?

    <p>Willingness to pay</p> Signup and view all the answers

    Value capture refers to how products/services are developed.

    <p>False</p> Signup and view all the answers

    What is the main benefit of trendwatching for a business?

    <p>Identifies growth opportunities.</p> Signup and view all the answers

    Value creation, value delivery, and value capture are the three components of a _____ model.

    <p>business</p> Signup and view all the answers

    Which of the following is an example of a fad?

    <p>Ice bucket challenge</p> Signup and view all the answers

    Match the types of trends with their definitions:

    <p>Fads = Short-lived phenomena Trends = Medium-term lasting influences Megatrends = Long-term structural changes</p> Signup and view all the answers

    What are two methods used in trend identification?

    <p>Qualitative and quantitative</p> Signup and view all the answers

    Trendwatching includes only quantitative analysis.

    <p>False</p> Signup and view all the answers

    Which of the following best describes the exploit phase in business?

    <p>Maximizing profitability and scaling operations</p> Signup and view all the answers

    Sustaining innovation refers to the initial launch of a business model.

    <p>False</p> Signup and view all the answers

    What do successful companies balance in order to ensure sustainable growth?

    <p>exploration for innovation and exploitation for profitability</p> Signup and view all the answers

    The phase where a business achieves stability and high returns is known as the ______ business.

    <p>mature</p> Signup and view all the answers

    Which type of disruption involves changes in how operations are structured?

    <p>Backstage disruptions</p> Signup and view all the answers

    Match the types of disruptions with their descriptions:

    <p>Frontstage disruptions = Changes to customer interactions and value proposition Backstage disruptions = Changes in operational structures Profit formula disruptions = Innovations in pricing and cost structures</p> Signup and view all the answers

    Efforts to rejuvenate a declining business model are referred to as renovation.

    <p>True</p> Signup and view all the answers

    Innovative channels that change how businesses reach customers are known as _____ kings.

    <p>channel</p> Signup and view all the answers

    What is indicated by the transition from a high transactional cost to recurring revenues?

    <p>Establishing a subscription model</p> Signup and view all the answers

    Companies typically do not perform shifts in their business models.

    <p>False</p> Signup and view all the answers

    What is a key step in the process of exploiting and transforming business models?

    <p>Scale</p> Signup and view all the answers

    The transformation of business models requires constant evaluation and updating of __________.

    <p>capabilities</p> Signup and view all the answers

    Match the following types of capabilities with their descriptions:

    <p>Strategic = Guide direction through vision and frameworks Core = Create market differentiation through unique offerings Enabling = Support operations with necessary functions</p> Signup and view all the answers

    What defines 'overfitting' in the context of business capabilities?

    <p>Excessive focus resulting in inefficiencies</p> Signup and view all the answers

    Name an example of a value stream in service delivery.

    <p>Consulting</p> Signup and view all the answers

    Capability mapping is essential for identifying areas needing improvement within an organization.

    <p>True</p> Signup and view all the answers

    Which of the following best describes 'foresight' in trend management?

    <p>Analysis of future opportunities and challenges linked to trends</p> Signup and view all the answers

    Scenario planning is exclusively focused on historical data for decision-making.

    <p>False</p> Signup and view all the answers

    What are the three horizons of growth in portfolio management?

    <p>H1: Core business improvements, H2: Adjacent markets and innovations, H3: Disruptive ideas and new markets.</p> Signup and view all the answers

    The external pressures within an industry, such as competitors or customer expectations, are referred to as ______.

    <p>industry forces</p> Signup and view all the answers

    Match the following types of forces with their definitions:

    <p>Market forces = Broader conditions affecting value propositions Macro-economic forces = Economic trends shaping the market environment Industry forces = External pressures from competitors and customers</p> Signup and view all the answers

    What is the primary goal of scenario planning?

    <p>To prepare for various future uncertainties and strategize accordingly</p> Signup and view all the answers

    Horizon 3 in growth strategy focuses on immediate returns with low risk.

    <p>False</p> Signup and view all the answers

    Name a tool that can be used for trendwatching.

    <p>trends.google.com or Trendwatching.com</p> Signup and view all the answers

    Study Notes

    Quick Recap

    • Business Model: Defines how a company's activities generate value. It outlines how a company creates, delivers, and captures value.
    • Willingness to Pay (WTP): The maximum price a customer is willing to pay for a product or service.
    • Value Created: The difference between a customer's WTP and the cost to produce the product or service.
    • Value Capture: Strategies to generate profit while staying below the customer's WTP.
    • Business Model Innovation: Changing how a company creates, delivers, and captures value. It includes value creation (product development), value delivery (customer reach), and value capture (profit generation).
    • Product Innovation: Introducing new products to new markets (new product, new market), existing products to new markets (existing product, new market), or new products to existing markets (new product, existing market).
    • Trend: Patterns or shifts disrupting industries.

    Trendwatching

    • Trendwatching Process: Identifying, monitoring, and analyzing emerging patterns, shifts, or disruptions across various contexts to provide strategic insights.
    • Trendwatching Importance: Identifying growth opportunities, adapting to changing environments, and gaining clarity in chaotic industries.
    • Types of Trends: Fads (short-lived), Trends (medium-term), and Megatrends (long-term structural changes).
    • Trendwatching Capabilities: Identifying emerging trends, managing trends relevant to an organization, and identifying project priorities.
    • Trend Identification Tools: Social media analysis for sentiment and behavior, big data & analytics for trend detection and predictions, and industry conferences for identifying industry trends.

    Foresight

    • Foresight Component: Analyzes trends to predict future opportunities and challenges for a business model.
    • Industry Forces: External pressures (competitors, suppliers, customer expectations) that affect a business model.
    • Market Forces: Broad conditions influencing a business model, such as capital markets, consumer trends, and demand.
    • Macroeconomic Forces: Economic trends, regulations, and global conditions that affect a business model.

    Scenario Planning

    • Scenario Planning Process: Develops different future scenarios based on trends and foresight to prepare for uncertainty.
    • Factors in Scenario Planning: Variables assigned to factors like "silver workers" and remote work, increasing/decreasing variables, and remote work – everything remote/back to the office.

    Portfolio Management

    • Portfolio Management Goal: Explore interesting and high-impact scenarios for strategic decision-making. It's focused on strategic decisions.
    • Portfolio Management Horizons of Growth: Three horizons (H1, H2, H3) focusing on different timeframes and risk levels for initiatives.
    • H1 (Low Risk): Focus on improving core business for immediate returns.
    • H2 (Moderate Risk): Expand into adjacent markets or develop innovations for medium-term impact.
    • H3 (High Risk): Explore disruptive ideas for long-term transformation.

    Business Model Portfolio (EXPLORE/EXPLOIT)

    • Explore Phase: Develops new business ideas, experimenting with concepts, validating assumptions, confirming viable models, eventually transitioning to the exploit phase.
    • Exploit Phase: Launching and scaling a proven model, optimizing for efficiency, managing maturity and decline, and eventually renovation if needed.
    • Links to Portfolio Management: Types of disruptions categorized as frontstage (customer & value proposition changes) or backstage (internal operational changes).

    Business Design Loop

    • Ideation: Generating business model possibilities using design sprints.
    • Prototyping: Developing tangible representations of the business model with tools like BMC and Value Proposition Canvas.
    • Assessment: Evaluating feasibility, desirability, and adaptability of the model through stakeholder feedback and challenging questions.
    • Testing: Validating models through feedback, developing and prioritising hypotheses around desirability, feasibility, viability, and adaptability, and conducting experiments and continuous learning.

    Ideate - Preserve

    • Ideation-Preservation: Continuously testing and refining the business model after ideation.
    • Factors to Pivot and Adjust: Based on evidence, ideas can be pivoted to capitalize on new opportunities.

    Business Model Shifts

    • Value Proposition Shifts:
    • Product to service
    • Low tech to high tech
    • Sales to platform
    • Backstage Shifts:
    • Dedicated to multi-usage resources
    • Asset heavy to asset light
    • Closed to open innovation
    • Profit Formula Shifts:
    • High to low costs
    • Transactional to recurring revenue
    • Conventional to contrarian

    Continuous Improvement and Change Management

    • PDCA Cycle (Plan-Do-Check-Act): Method for monitoring and improving organization adaptation.
    • Change Management: Focusing on employee responses to change.
    • Methods: Addressing emotional responses through Kuber-Ross and ADKAR models to ensure smooth transitions.

    Business Capabilities

    • Business Capabilities: Essential organizational functions for customer value creation.
    • Types: Strategic, core, and enabling (related to vision, differentiation, and operations support).
    • Capability Mapping: Identifying gaps and areas needing development in capabilities.
    • Roadmapping: Defining milestones, actions, and timelines for capability development. Includes timelines and outcomes for all stakeholders.

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    Business Model PDF

    Description

    This quiz covers essential concepts related to business models, including willingness to pay, value creation, and business model innovation. Explore how product innovation and trendwatching influence business strategies and profitability. Test your understanding of these fundamental business principles.

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