Business Model and Innovation Concepts

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.