Podcast
Questions and Answers
Which of the following is NOT a step in the Business Design Loop?
Which of the following is NOT a step in the Business Design Loop?
Business model innovation involves only a single disruption.
Business model innovation involves only a single disruption.
False
What is the purpose of the prototype stage in the Business Design Loop?
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 to validate in the testing stage are desirability, feasibility, viability, and __________.
The four types of hypotheses to validate in the testing stage are desirability, feasibility, viability, and __________.
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Match the following business concepts with their descriptions:
Match the following business concepts with their descriptions:
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Which phase involves maximizing profitability and scaling operations?
Which phase involves maximizing profitability and scaling operations?
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A mature business is characterized by low returns and instability.
A mature business is characterized by low returns and instability.
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Name one type of disruptive change that affects customer acquisition.
Name one type of disruptive change that affects customer acquisition.
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The ______ phase aims to revitalize the business model to prevent decline.
The ______ phase aims to revitalize the business model to prevent decline.
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Match the company to their disruptive strategy:
Match the company to their disruptive strategy:
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What is the primary goal during the exploit phase of a business model?
What is the primary goal during the exploit phase of a business model?
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Backstage disruptions focus on external customer relationships.
Backstage disruptions focus on external customer relationships.
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What term describes the changes in pricing and cost structures as part of profit formula disruptions?
What term describes the changes in pricing and cost structures as part of profit formula disruptions?
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What approach does Microsoft exemplify in its OS initiatives?
What approach does Microsoft exemplify in its OS initiatives?
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Recurring revenue models are characterized by high transactional costs for customer acquisition.
Recurring revenue models are characterized by high transactional costs for customer acquisition.
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What is the purpose of capability mapping in a business context?
What is the purpose of capability mapping in a business context?
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The process of shifting a business model from __________ to __________ is known as disruption.
The process of shifting a business model from __________ to __________ is known as disruption.
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Match the types of business capabilities with their functions:
Match the types of business capabilities with their functions:
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Which of the following represents a 'contrarian' shift in the profit formula?
Which of the following represents a 'contrarian' shift in the profit formula?
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Exploit means spreading resources across numerous unproven business models.
Exploit means spreading resources across numerous unproven business models.
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Name one key step in the 'exploit and transform' process.
Name one key step in the 'exploit and transform' process.
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Study Notes
Quick Recap
- Business Model: Defines how a company's activities result in captured 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: Utilizing pricing strategies to generate profit while staying within the customer's WTP.
- Business Model Innovation: Altering how a company creates, delivers, and captures value.
Trendwatching
- Trendwatching Process: Identifying, monitoring, and analyzing emerging patterns, shifts, disruptions in consumer behavior, markets, technology and providing strategic insights.
- Trendwatching Importance: Identifying growth opportunities, assisting businesses in adapting to environmental changes, and providing clarity in fast-changing industries.
- Types of Trends:
- Fads: Short-lived phenomena (e.g., ice bucket challenge).
- Trends: Medium-term lasting influences (e.g., electric vehicles).
- Megatrends: Long-term structural changes (e.g., sustainability in business).
- Trendwatching Capabilities:
- Trend identification: Recognizing emerging patterns and trends.
- Trend management: Determining which trends are crucial for an organization.
- Portfolio management: Prioritizing ventures to undertake.
Foresight
- Foresight Component: An integral part of analyzing trends to proactively predict future opportunities and challenges faced by a business model.
- Industry Forces: External pressures (competitors, suppliers, customers) influencing the business model.
- Market Forces: Broad conditions like capital markets, consumer trends, and demand influencing value propositions and strategies.
- Macro-economic Forces: Economic trends, regulations and global conditions shaping market environments, impacting costs and revenue streams.
Scenario Planning
- Scenario planning process: Creating various probable future scenarios based on trends and foresight to prepare for uncertainty.
- Factors considered: Silver workers: increasing/decreasing; Remote work: completely remote work/back to offices.
- Process: Selecting factors/trends; assigning variables to factors; evaluating scenarios.
Portfolio Management
- Portfolio Management Goal: Explore high-impact scenarios for informed strategic decisions.
- Growth Horizons: Three phases—H1 (low risk, immediate returns), H2 (moderate risk, medium-term impact), H3 (high risk, long-term impact)—for initiatives to let them move from right to left.
Business Model Portfolio (Explore/Exploit)
- Explore Phase: Developing new business concepts with a high innovation risk.
- Exploit Phase: Introducing a proven model to the market for maximizing profitability.
- Link Between Exploration and Exploitation: Successful companies balance innovation exploration with profit exploitation.
Business Design Loop
- Ideation: Generating various business model possibilities using methodologies like design sprints.
- Prototyping: Creating physical representations of business models for assessment.
- Assessment: Evaluating models via stakeholder feedback on feasibility, desirability and adaptability.
- Validation: Validating the models using stakeholder feedback.
- Testing: Developing and validating hypotheses around desirability, feasibility, viability, and adaptability.
Business Model Shifts
- General Shifts: Gradual or radical changes in business models to adapt to external pressures.
- Value Proposition Shifts: Changes in how value is delivered to the customer - including product/service models, technology-driven approaches, niche/mass market focus.
- Backstage Shifts: Changes in value creation and resources. Includes shifting resources, business models (e.g., asset-heavy to asset light), and from closed to open innovation models.
- Profit Formula Shifts: Change in how profits are generated via revenue models - from transactional to recurring, high to low cost emphasis.
Continuous Improvement and Change Management
- Continuous Improvement (PDCA Cycle): Monitoring and improving the organization's adaptation to realities using quality management protocols like ISO9001 certification.
- Change Management: Addressing change's impact on individuals to improve adoption rates.
- Change Management Methods: Using models like Kübler-Ross' Change Curve (supporting through emotional responses to change) and ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement).
Business Capabilities
- Capabilities Defined: Essential organizational functions to deliver customer value.
- Capabilities Types: Strategic, Core, and Enabling.
- Capabilities Classification: Fitting (current needs), Underfitting (requiring improvement), and Overfitting (excessive focus).
- Capability Mapping: Defining core business capabilities to visualize areas needing improvement.
Roadmapping
- Roadmap Purpose: Guiding milestones and deliverables based on risk, priorities, dependencies.
- Roadmap Structure: Focusing on timelines, outcomes, and stakeholder communication to adjust levels of detail for different audiences.
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Description
Explore the fundamental concepts of business models, including willingness to pay, value created, and value capture. Additionally, learn about the trendwatching process and its importance in identifying consumer behavior changes and growth opportunities for businesses. Understand how these concepts interplay in modern markets.
