Entrepreneurship and Innovation MGT-031 PDF

Entrepreneurship and Innovation MGT-031  Contact Information Name: Dr. Rashed Refaat ‫ راشد رفعت‬.‫د‬ Office Location: Administrative science building, Ground Floor, Room # H004. Email: Rashed.Ref...

Entrepreneurship and Innovation MGT-031  Contact Information Name: Dr. Rashed Refaat ‫ راشد رفعت‬.‫د‬ Office Location: Administrative science building, Ground Floor, Room # H004. Email: [email protected]  Let’s start Entrepreneurship and Innovation MGT-031 Dr. Rashed Refaat  Entrepreneurship and Innovation MGT-031 is a Practical course Case Studies.  Grade distribution Fall 2023 Attendance & Participation 10 ASU Certificate in Innovation 10 Quizzes (4 quizzes ) 20 Group Project 20 Final Exam 40 Certificate in Innovation Benefit of the Certificate  Create Projects’ Teams Team criteria: Number of 6 students Max Diverse team member is best All members from same section Select Cool name. Use Canvas to create your group Different team leader each lecture  Endorsement All project ideas initiated during the semester inside campus have no copyrights.  Textbooks Business Model Generation by Alexander Osterwalder Yves Pigneur  Textbooks Entrepreneurship by ROBERT D. HISRICH MICHAEL P. PETERS DEAN A. SHEPHERD  List of reference Textbooks Fundamentals for Becoming a Successful Entrepreneur From Business Idea to Launch and Management Malin Brännback & Alan Carsrud https://ptgmedia.pearsoncmg.com/im ages/9780133966817/samplepages/97 80133966817.pdf List of reference Textbooks  List of reference Textbooks Entrepreneurship and Handbook of Research on Small Business Business Process Modelling Management Jorge Cardoso SAP Research, Germany Hitesh Jhanji Wil van der Aalst https://ebooks.lpude.in/commerce/ Technische Universiteit Eindhoven, The bcom/term_5/DCOM305_DMGT310 Netherlands _ENTREPRENEURSHIP_AND_SMALL_ BUSINESS_MANAGEMENT.pdf What is the meaning of entrepreneurship ?  Entrepreneurship Entrepreneurship is defined as: the ability and readiness to develop, 1 organize and run a business enterprise, along with any of its uncertainties in order to make a profit.  Entrepreneurship Entrepreneurship is defined as: the act of starting and running your own 2 business or a tendency to be creative and wish to work for yourself in your own ventures.  Entrepreneurship Entrepreneurship is defined as: The process of doing something new or 3 something different for the purpose of creating wealth for the individual and adding value to society.  Entrepreneurship Entrepreneurship is defined as: the process of creating something 4 different with value by devoting the necessary time and effort and receiving the resulting rewards of monetary and personal satisfaction and independence.  Entrepreneurship Entrepreneurship is defined as: the activity that involves the discovery, 5 evaluation and exploitation of opportunities to introduce new: goods, services, ways of organizing, markets, processes and raw materials through organizing efforts that previously had not existed.  Entrepreneurship Entrepreneurship is defined as: a strategic thinking and risk-taking 6 behavior that results in the creation of new opportunities for individuals and/or organizations.  Entrepreneurship Entrepreneurship is defined as: 7 The process of designing, launching and running a new business. Importance of Entrepreneurship Creation of Employment Invention/Innovation Impact on Society and Community Development Increase Standard of Living Supports research and development Importance of Entrepreneurship Creation of Employment Entrepreneurship generates employment. It provides an entry-level job, required for gaining experience and training for unskilled workers. Importance of Entrepreneurship Increase Standard of Living Entrepreneurship helps to improve the standard of living of a person by increasing the income. The standard of living means, increase in the consumption of various goods and services by a household. Importance of Entrepreneurship Impact on Society and Community Development A society becomes greater if the employment base is large and diversified. Therefore, entrepreneurship assists the organization towards a more stable and high quality of community life. Importance of Entrepreneurship Invention/Innovation Entrepreneurship is the hub of innovation that provides new product ventures, market, technology and quality of goods, etc.  Invention & Innovation What is the difference between invention & innovation ?  Invention & Innovation invention occurs when creating a completely new idea, while innovation is improving upon an existing idea.  Invention & Innovation Example. When the first car was created, it was an invention, but add features to the car is an innovation.  Importance of Entrepreneurship Supports Research and Development New products and services need to be researched and tested before launching in the market. This promotes research, general construction, and development in the economy.  An entrepreneur is an innovator or a creator who introduces something new to the firm or economy. It can be a new method of production, a new product, a new source of material, a new market or any other similar innovation. The entrepreneur is : a person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business. someone who has the ability and desire to establish, administer and succeed in a startup venture along with risk entitled to it, to make profits. The entrepreneur is : the individual that is a risk taker and innovator. a source of new ideas or innovators and bring new ideas in the market by replacing old with an invention.  The entrepreneur is : Founders of businesses that become large-scale enterprises. People who: Buy a local franchise outlet Open a small retail shop Operate a self-employed service business People who introduce a new product or operational change in an existing organization. Types of Entrepreneurs The types of entrepreneurs vary depending on background, country and even sector  Small business Entrepreneurs Who starting a business with low capital to serve the local community or town, Employees in this business are mostly family members or people from the town. Mostly these entrepreneurs won't think of expanding the business. They looking to ensure that their earning is sufficient for their healthy lifestyle.  Small business Entrepreneurs Some examples hairdressers, restaurants, grocery shops, carpenters, plumbers Lawyer Doctors and more……  Solo Entrepreneur A solo entrepreneur, or solopreneur, is someone who operates a one- person business. Like a small business entrepreneur in that they are independently owned, a solopreneur doesn’t work with partners.  Solo Entrepreneur These types of entrepreneurs often run service-based businesses like: consulting, coaching, or freelancing  Innovative Entrepreneurs An innovative entrepreneur is a person who discovers totally new things. An innovative entrepreneur is a person who innovates the business processes in his business. An innovative person is a person who is not afraid to take a risk.  Nascent Entrepreneurs Nascent entrepreneur is someone (or a team) who is trying to start an independent business. The goal is that nascent entrepreneurs become novice entrepreneurs.  Novice Entrepreneurs Who has successfully launched his/her first business. Who currently have a stake (minority or majority) in a newly established, acquired or inherited enterprise. Novice entrepreneur is a person without prior experience in the ownership of a business, founder and buyer or heir of an existing independent enterprise.  Habitual Entrepreneurs Habitual entrepreneurs are persons who have or had a minority or majority stake in two or more enterprises, and at least one of them was founded, acquired or inherited. Habitual entrepreneurs include: Serial entrepreneurs Portfolio entrepreneurs  Habitual Entrepreneurs Serial entrepreneurs: are persons who have sold or closed at least one business in which they have had a minority or majority stake, and currently hold Series a minority or majority stake in one independent enterprise that was newly founded, acquired or inherited.  Habitual entrepreneurs Portfolio entrepreneurs: are persons who currently hold a minority or majority stake in two or more independent enterprises that were newly established, acquired or Parallel inherited.  Imitative Entrepreneur Imitative entrepreneurs (Adoptive) are those who run their enterprises by imitating (copy or adopt) the successful innovations applied by innovative entrepreneurs. they do not have an interest in innovative activities, the same as that innovative entrepreneurs.  Fabian Entrepreneur Fabian entrepreneur is an entrepreneur who is: Patient and willing to wait for the right opportunity to invest in a business venture Also, willing to take calculated risks and their ability to think long-term "Fabian" comes from the Roman general Quintus Fabius Maximus, who famously employed a strategy of delaying tactics and avoiding direct confrontation with Hannibal's forces during the Second Punic War. Drone Entrepreneur Drone entrepreneurs are unwilling to change since they are very conservative and do not want to make any changes in the organization.  Drone Entrepreneur They will try to run their business in the traditional way, and they will even accept loss but not willing to adopt the changes. Drone entrepreneurs refuse to copy or use opportunities that come on their way.  Social entrepreneur A social entrepreneur an individual who pursues novel ideas with the potential to solve or improve certain community-oriented problems. often are willing to take the risks associated with their venture to help address issues, enabling positive change in society  Corporate Entrepreneur A corporate entrepreneur (an intrapreneur) is an individual who conducts at least part of their creation activities at work using corporate resources, people, and/ or time.  Entrepreneur's Classifications 1. Based on motivation: 5. Based on social impact: Opportunity entrepreneurs Social entrepreneurs Necessity entrepreneurs 6. Based on industry sector: 2. Based on innovation: Retail entrepreneurs Innovative entrepreneurs Service entrepreneurs Imitative entrepreneurs Manufacturing entrepreneurs 3. Based on growth goals: Agriculture entrepreneurs Lifestyle entrepreneurs Creative entrepreneurs High-growth entrepreneurs Tech entrepreneurs 4. Based on ownership structure: 7. Based on level of experience: Solo entrepreneurs Novice entrepreneurs Co-entrepreneurs Serial entrepreneurs Portfolio entrepreneurs  Entrepreneur's Classifications 8. Based on business model: 11.Based on geographical location: Franchise entrepreneurs Urban entrepreneurs Online entrepreneurs Rural entrepreneurs Micro-entrepreneurs Regional entrepreneurs 9. Based on funding source: International entrepreneurs Bootstrapped entrepreneurs 12.Based on legal structure: Venture-backed entrepreneurs Sole proprietorship entrepreneurs 10.Based on personality traits: Partnership entrepreneurs Visionary entrepreneurs Limited liability company (LLC) Risk-taking entrepreneurs entrepreneurs Resilient entrepreneurs Corporation entrepreneurs Passionate entrepreneurs Perseverant entrepreneurs Personality Characteristic of Entrepreneurs There’s no right or wrong way to be an entrepreneur. Key characteristics and behaviours can be developed with time, experience, and training. Personality Characteristic of Entrepreneurs 1. Ability to identify the right opportunity and take advantage of it. 2. Understanding the importance of time and being punctual to work on time. 3. Ability to make the right decisions / Right time. 4. Having faith in yourself. 5. Always focus on growing your business 6. Ability to take risks. 7. Using new technology in your business and moving forward the business. Personality Characteristic of Entrepreneurs 8. Efficient in arranging and managing well. 9. Doing everything with planning. 10. Consider importance of training. 11. The ability to complete the task once a decision is made. 12. Ability to deal with future problems. 13. Learning from his own and others' experience. 14. To meet the demand according to the market. What Motivates an Entrepreneur? The 6Cs What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Change − Entrepreneurs frequently want change, not only change, they also want to be the bearers of change. What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Challenge − Some people love challenges, and they opt for starting a new business as it is very challenging to handle big problems. These people find typical job in a big corporate as boring and not challenging enough. What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Creativity − Running one’s own business is all about being more creative and having the independence to make new discoveries. For example, creating inventive items that solve a known issue in a different way, creating new advertising campaigns, etc. What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Control − Some people tend to start a business because they don't want to be pushed around and work for a company. They want to be their own boss having their own time, own pace, location of their choice, employees of their choice and have a progressive role in deciding the direction of the company. What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Curiosity − Successful entrepreneurs are always anxious and ask − "what if we do X this way?” They want to have more than one option to do a work and choose the best one from them. What Motivates an Entrepreneur? The 6Cs that motivate entrepreneurs to establish their own business are as follows: ▪ Cash − The last but not the least part is the cash. Money is not the primary motivation. Many non-entrepreneurs have a misconception that cash comes first for entrepreneurs, but this is never really true. Investment isn’t Everything Target Customers & their Requirements Go for the Right Business Never Stuck in the Past Don’t hire Known People Don’t afraid to Fail Find a True Mentor Entrepreneurship Mistakes Avoiding the Pitfalls of Small Business Failure 1. Maintain a positive attitude 2. Know your business in depth 3. Develop a solid business plan 4. Manage financial resources & Understand financial statements 5. Learn to manage people effectively 6. Build a viable business model – and test it 7. Set your business apart from the competition  Ten Deadly Mistakes of Entrepreneurship 1. Management mistakes 2. Lack of experience 3. Poor financial control 4. Weak marketing efforts 5. Failure to develop a strategic plan 6. Uncontrolled growth 7. Poor location 8. Improper inventory control 9. Incorrect pricing 10. Inability to make the “entrepreneurial transition” 1 - 68 Putting Failure Into Perspective Failure is a natural part of the creative process. Successful entrepreneurs learn to fail intelligently. Successful people do what unsuccessful people are not willing to do. Don't wish it were easier; wish you were better. "Success is not final, failure is not fatal; it is the courage to continue that counts." Winston Churchill  Here are some successful stories for well known entrepreneurs who changed the world Thomas Edison Inventor  Bill Gates Microsoft Company Mark Zuckerberg Facebook  Jeff Bezos, Founder, Chairman and Chief Executive Officer of Amazon Stephen Wozniak Steve Jobs co-founded Apple Apple Company  Elon Musk, the founder of Tesla and SpaceX Drawbacks of Entrepreneurship Uncertainty of income Entrepreneurship does not ensure a fixed and stable income like a full-time job. Entrepreneurs have no fixed income, and income is not guaranteed at the initial stage of business. Drawbacks of Entrepreneurship Risk of losing your entire investment The initial stages of an entrepreneur's journey can be very challenging. There are risks that business strategies may not work, leading to losses in the business. Drawbacks of Entrepreneurship Long hours and hard work Apart from uncertain income, entrepreneurs do not have any fixed working hours. Running a business from the beginning requires a lot of effort. It is difficult to disconnect from the business for several days. Drawbacks of Entrepreneurship Lower quality of life until the business gets established Most of your time will be spent trying to keep your business afloat and this could have adverse effects on your personal life. Drawbacks of Entrepreneurship High levels of stress No Fixed Working Hours. The turbulences in the personal lives add to the stress levels. All these factors cause additional stress and can result in poor physical and mental health. Drawbacks of Entrepreneurship Complete responsibility An entrepreneur must take care of finance, legal issues, sales, manpower, and other factors to work. Drawbacks of Entrepreneurship Discouragement Demotivation due to the threat of competition. Dealing with difficult people  Factors Affecting Entrepreneurship The entrepreneurial activity at any time is dependent upon a complex and varying combination of economic, social, political, psychological and other factors. Following factors contribute to the success of entrepreneurship  Factors Affecting Entrepreneurship Economic Factor: Factors such as availability of finance, labour, land, accessibility of customers, suppliers are the factors that stimulate entrepreneurship.  Factors Affecting Entrepreneurship Non-Economic Factors: The entrepreneurial activity at any time and place is governed by varying combination of Non- economic factors as follows: - Level of Education - Family background - Attitude of the Society - Level of perception - Cultural Value - Political - Investment capacity - Personal Factors  MGT-031 Business Modeling Dr. Rashed Refaat  Endorsement All project ideas initiated during the semester inside GU campus is shared between all GU’s student.  ASU Certificate Dear all students, We are pleased to announce a new online course from our partner Arizona State University (ASU) designed exclusively for undergraduate students at Galala university. This fall, Entrepreneur and innovation's students can register to take “What is Innovation”, a 10-hour online synchronous course for students interested in innovative theory, thinking, technology and methodology. At the end of the course, students will receive a certificate from Arizona State University. This course was created as part of the partnership between Galala university and Arizona State University and offers a unique opportunity for students to learn directly from top researchers and professors who have committed their professional careers to studying innovation in various contexts. This course is offered to all Entrepreneur and innovation's students and is designed to be delivered asynchronously on the Canvas platform. Course details Course dates: Oct. 30 – Dec. 8 Registration opens: Now until Friday, 20/10/2023 Visit the web page to register and learn more: https://bit.ly/asucertificates2Links to an external site. Meaning of a Business Model  What is Business Model (BM.)? BM describes how a company creates value for its customers and creates revenue for itself. Business Model consider as the business logic of the company. Every company has a Business model.  How to build your business model? 4 key business model questions Who? (Customer segments) What? (Value proposition – Offering) How? (Material resources - Human resources) What’s in it? (Revenue model, Pricing model, Costs, and resulting profit) Design Business Model Designing a viable business model requires trade-offs and iterations to get it right. Nine Basic Building Blocks  Business Model Component (1) Customer Segments Defines the different groups of people or organizations an enterprise aims to reach and serve.  Business Model Component (2) Value Propositions Describes the bundle of products and services that create value for a specific Customer Segment  Business Model Component (3) Channels Describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition  Business Model Component (4) Customer Relationships Describes the types of relationships a company establishes with specific Customer Segments  Business Model Component (5) Revenue Streams Represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings)  Business Model Component (6) Key Resources Describes the most important assets required to make a business model work, Key resources can be physical, financial, intellectual, or human. Key resources can be owned or leased by the company or acquired from key partners.  Business Model Component (7) Key Activities Describes the most important things a company must do to make its business model work  Business Model Component (8) Key Partnerships Describes the network of suppliers and partners that make the business model work  Business Model Component (9) Cost Structure The Cost Structure describes all costs incurred to operate a business model. Nine Basic Building Blocks Business Business Plan Vs Model 21 The business model is the mechanism through which the company generates its profit while the business plan is a document presenting the company's strategy and expected financial performance for the years to come.  Business Plan A business plan is a written document describing a company's core business activities, objectives, and how it plans to achieve its goals....  Business Plan Good business plans should include at least: 1. Executive summary, 2. Products and services, 3. Marketing strategy and analysis, 4. Financial planning, and a budget.  Business Model Key metrics: The ways your company measures success. Most common types of business models There are a variety of types of business models and they all can be customized or changed based on the specific company or industry.  Business Model Types 1. Subscription model A subscription business model can be applied to both traditional brick-and-mortar businesses and online businesses alike. The customer pays a recurring payment on a monthly basis (or another specified timeframe) for access to a service or product.  Business Model Types 2. Bundling model The bundling business model involves companies selling two or more products together as a single unit, often for a lower price than they would charge selling the products separately.  Business Model Types 2. Bundling model This type of business model allows companies to generate a greater volume of sales and perhaps market products or services that are more difficult to sell. However, profit margins often shrink since businesses sell the products for less.  Business Model Types 3. Freemium model The freemium business model has gained popularity with the prevalence of online and Software-as-a-Service (SaaS) businesses. A software company hosts and provides a proprietary tool for their users to freely access, the company withholds or limits the use of certain key features.  Business Model Types 3. Freemium model To gain access to those key features, users must pay for a subscription. It gives users free and open access to its entire database and sprinkling a lot of ads during logging-in. LinkedIn and Skype are using the freemium model.  Business Model Types 4. Razor blades model Companies offer a cheaper product with the understanding that you’ll continue to purchase more expensive accessories in the future. For this reason, this model is referred to as the "razor blades model.“ Examples of razor blades model include Xbox, and printer and ink companies.  Business Model Types 5. Reverse Razor blades model In addition to the traditional razor blades model, companies use the reverse razor blades model, in which they offer customers a high-margin product and then promote the sales of lower-margin products that accompany that initial product.  Business Model Types 5. Reverse Razor blades model A classic example of this model is Apple iPhones and Macs — you purchase the high- margin item, the phone or computer, and then Apple pushes additional products, tools, and services that accompany that item.  Business Model Types 6. Product to service model Imagine that you are the owner of a company that makes scooters. Let’s say you need two pieces of metal welded together. You might ask another company to weld the pieces of metal together instead of purchasing a welding machine yourself.  Business Model Types 6. Product to service model This example shows how the product to service business model works. Companies that follow this type of business model allow customers to purchase a result rather than the equipment that delivers that result. Example of companies that use this model are Uber and Swivel.  Business Model Types 7. Leasing model Under a leasing business model, a company buys a product from a seller. That company then allows another company to use the product they purchased for a periodic fee. Leasing agreements work best with big-ticket items like manufacturing and medical equipment.  Business Model Types 8. Crowdsourcing model Crowdsourcing involves receiving opinions, information, or work from many different people using the internet or social media. These types of business models allow companies to tap into a vast network of talent without having to hire in-house employees.  Business Model Types 9. Franchise model A franchise is an established business blueprint that is simply purchased and reproduced by the buyer, the franchisee. The franchiser, or original owner, works with the franchisee to help them with marketing, and other business operations to ensure the business functions as it should.  Business Model Types 9. Franchise model In return, the franchisee pays the franchiser a percentage of the profits. Examples: Starbucks, Domino's, Subway, McDonald's and the UPS Store are all common examples of the franchise model.  Business Model Types 10. Manufacturer model One of the most traditional business models, the manufacturer model refers to when a manufacturer converts raw materials into a product. Companies which assemble computers with parts manufactured by other companies, would still be considered manufacturers.  Business Model Types 11. Distribution model A company operating as a distributor is responsible for taking manufactured goods to the market. To make a profit, distributors buy the product in bulk and sell it to retailers at a higher price.  Business Model Types 12. Retailer model A retailer is the last link in the supply chain. These businesses purchase goods from distributors and then sell them to customers for a price that will both cover expenses and turn a profit. Retailers may specialize in a particular niche, or carry a range of products.  Business Model Types 13. Advertising The fundamentals of the model revolve around creating content that people want to read or watch and then displaying advertising to your readers or viewers. In an advertising business model, you must satisfy two customer groups: your readers or viewers, and your advertisers.  Business Model Types 13. Advertising Your readers may or may not be paying you, but your advertisers certainly are. An advertising business model is sometimes combined with a crowdsourcing model where you get your content for free from users instead of paying content creators to develop content. Examples, The New York Times, YouTube  Business Model Types 14. Affiliate The affiliate business model is related to the advertising business model but has some specific differences. Most frequently found online, the affiliate model uses links embedded in content instead of visual advertisements that are easily identifiable.  Business Model Types 14. Affiliate For example, if you run a book review website, you could embed affiliate links to Amazon within your reviews that allow people to buy the book you are reviewing. Amazon will pay you a small commission for every sale that you refer to them.  Business Model Types 15. Brokerage Brokerage businesses connect buyers and sellers and help facilitate a transaction. They charge a fee for each transaction to either the buyer or the seller and sometimes both. The most common brokerage businesses is a real estate agency, OLX, …  Business Model Types 16. Fractionalization it is a business model that focuses on selling a fraction of a product, It involves allowing customers to buy part of a product or service instead of taking the entire lot. For examples “timeshares”, “buy part of a product or service instead of taking the entire it” The Business Model Canvas From Blocks to Canvas The Business Model Canvas Apple iPod/iTunes Business Model  Left Brain Right Brain Logic Emotion Business Model Canvas vs Human Brain Left Canvas Right Canvas efficiency Value  AS-IS and TO-BE business models Both the as-is and to-be business models are important for a company to understand its current state, identify areas for improvement, and plan for future growth. Analyzing the differences between the as-is and to-be models can help a company to develop a roadmap for achieving its goals and objectives.  As-is business model As-is business model: This refers to the current state of a business model, as it exists today. It represents the current processes, activities, resources, capabilities, and strategies that a company uses to create and deliver value to its customers. The as-is model is typically used as a baseline for comparison against the to-be model.  To-be business model To-be business model: This refers to the desired or proposed state of a business model, which the company wants to achieve in the future. The to-be model reflects the changes, improvements, or innovations that the company plans to make to its existing business model in order to address new challenges, take advantage of new opportunities, or better serve its customers.  Business Model Patterns Business Model Patterns are the business models with similar characteristics, similar arrangements of business model Building Blocks, or similar behaviors.  Unbundled Business Models Business Model Long Tail Business Models Patterns Examples MultiSided Platforms  Unbundled Business Models Business Model Long Tail Business Models Patterns Examples MultiSided Platforms Unbundled Business Models  Unbundled Corporation Business Models The concept of the "unbundled" corporation refers to the idea that there are three fundamentally different types of businesses, each with a unique focus on a specific aspect of the value chain. These three types of businesses are: Customer Product Infrastructure relationship innovation businesses businesses, businesses,  Unbundled Corporation Business Models Customer relationship businesses: These businesses focus on building and maintaining relationships with customers. They typically have strong brands, and their success depends on their ability to create a loyal customer base.  Unbundled Corporation Business Models Product innovation businesses: These businesses focus on developing new and innovative products or services. They typically invest heavily in research and development, and their success depends on their ability to create new products that meet the changing needs of customers.  Unbundled Corporation Business Models Infrastructure businesses: These businesses focus on providing the underlying infrastructure that supports other businesses. They typically invest heavily in physical or digital infrastructure, and their success depends on their ability to provide reliable and cost-effective infrastructure services to other businesses  Unbundled Corporation Business Models The concept of the unbundled corporation suggests that businesses should focus on their core competencies and outsource or partner with other businesses for the other aspects of the value chain. For example, a product innovation business may partner with an infrastructure business to provide the necessary physical or digital infrastructure for its products, while outsourcing customer relationship management to a specialized customer relationship business.  Unbundled Corporation Business Models The unbundled corporation concept has important implications for business strategy and organizational design. By understanding the different types of businesses and their unique focus, companies can better align their resources and capabilities to achieve their strategic goals.  Unbundled Business Models Examples 1. Swiss private banking 2. Mobile Telco Swiss Private Banking: Three Businesses in One Traditionally, private banking institutions were vertically integrated and performed tasks ranging from wealth management to brokerage to financial product design. Swiss Private Banking: Three Businesses in One There were sound reasons for this tight vertical integration. Outsourcing was costly, and Private banks preferred keeping everything in-house due to secrecy and confidentiality concerns.  Unbundling “Maerki Baumann” is an example of a bank that has unbundled its business model. It separated its transaction-oriented platform business into a separate entity called Incore Bank, which offers banking services to other banks and securities dealers. “Maerki Baumann” now focuses solely on building Customer Relationships and advising clients. Unbundling the Mobile Telco AS IS Mobile Telco canvas TO BE Mobile Telco canvas TO BE Mobile Telco canvas TO BE Mobile Telco canvas  Unbundled Business Models Business Model Long Tail Business Models Patterns Examples MultiSided Platforms  Pareto principle 80% 20% The 80/20 concept (also known as the Pareto principle) refers to the idea that roughly 80% of a business's revenue comes from 20% of its products or customers  Pareto principle 80% 20% This concept suggests that businesses should focus on the most profitable products or customers in order to maximize revenue and profits.  Pareto principle 80% 20% By identifying the most profitable products or customers, businesses can allocate resources more effectively to generate the most revenue and profit.  The Long Tail concept was coined by Chris Anderson he describe a shift in the media business Long Tail from selling a small number of “hit” items in large Business volumes toward selling a very large number of niche Models items, each in relatively small quantities. which aggregate revenues equivalent to, or even exceeding revenues produced by focusing on “hit” products.  Anderson’s research focuses primarily on the media industry. Long Tail he showed how online video rental Business company Netflix moved toward licensing Models a large number of niche movies. While each niche movie is rented relatively infrequently  But Anderson demonstrates that the Long Tail concept applies outside the Long Tail media industry as well. Business The success of online auction site eBay is Models based on a huge army of auctioneers selling and buying small quantities of “non-hit” items.  Long Tail Business Models Netflix, eBay, YouTube, Facebook, The Transformation of the Book Publishing Industry (Lulu.com) LEGO®’s New Long Tail LEGO®’s New Long Tail  LEGO®’s New Long Tail Customers can even design the kit containing box. LEGO turned passive users into active participants in the LEGO design experience  Unbundled Business Models Business Model Long Tail Business Models Patterns Examples MultiSided Platforms  Multi-Sided Platforms Multi-sided Platforms bring together two or more distinct but interdependent groups of customers. Such platforms are of value to one group of customers only if the other groups of customers are also present.  Multi-Sided Platforms The platform creates value by facilitating interactions between the different groups. A multi-sided platform grows in value to the extent that it attracts more users, a phenomenon known as the network effect. Google’s Business Model Google’s Business Model DIFFERENT BUSINESS MODEL CANVAS EXAMPLES  Open Source: Freemium with a Twist RedHat Business Model  The Insurance Model: Freemium Upside Down REGA Business Model  Bait & Hook of Free Mobile Phones REGA Business Model = “loss leader” = “razor & blades” model. Open Business Models vs Close Business Models Open Business Models  Open Business Models can be used by companies to create and capture value by systematically collaborating with outside partners using two ways: the “outside-in” by exploiting external ideas within the firm, or the “inside-out” by providing external parties with ideas or unused assets within the firm.  Procter & Gamble: Connect & Develop outside-in Exploiting internal research through outside partnerships Set motivated goal: create 50% of P&G’s innovations with outside partners at a time when that figure was closer to 15%. The company surpassed that goal of R&D productivity had raised 85%  Procter & Gamble: Connect & Develop outside-in In order to link its internal resources and R&D activities with the outside world, Procter & Gamble built three “bridges” into its business model through three websites: (1) technology entrepreneurs, (2) Internet platforms, and (3) Retirees.  GlaxoSmithKline’s Patent Pools Inside-Out The inside-out approach to open innovation ordinarily focuses on monetizing unused internal assets, primarily patents and technology. The company’s goal was to make drugs more accessible in the world’s poorest countries and to facilitate research into understudied diseases.  GlaxoSmithKline’s Patent Pools Inside-Out Placed intellectual property rights into a patent pool open to exploration by other researchers. Patent pools aggregate intellectual property from different rights-holders and makes it more accessible. This helps prevent R&D advances from being blocked by a single rights-holder.  The Connector: InnoCentive InnoCentive provides connections between organizations with research problems to solve “seekers” and researchers from around the world “solvers” with cash prizes that can range from $5,000 to $1,000,000. Value Proposition lies in aggregating and connecting “seekers” and “solvers.” The Connector: InnoCentive  Design “Businesspeople don’t just need to understand designers better; they need to become designers”. Roger Martin, Dean, Rotman School of Management  A designer’s job A designer’s job is to extend the boundaries of thought to generate new options, to create value for users.  A designer’s job Businesspeople unknowingly practice design every day. They design organizations, strategies, business models, processes, and projects.  A designer’s job To do designer’s job, we must consider a complex web of factors, such as competitors, technology, the legal environment, and more.  A designer’s job A designer’s job requires the ability to imagine using tools and talent. Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios. Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios.  Ideation The formation of ideas or concepts. Read & analysis page 135 (141 pdf) What is the main process they use to generate new idea? How they form workgroup? What is the concept of chaos meant here? Describe any other ideas you can extract from the text.  Generating New Business Model Ideas The goal of ideation is to generating LARGE NUMBER of diverse business model ideas and successfully ISOLATING THE BEST ONES. From dominant business model (Traditionally, where most industries were characterized), to more choices new business models Challenges of Generating New Business models  Challenges of generating new business models One challenge we face when trying to create new business model options is ignoring the status quo and suspending concerns over operational issues so that we can generate truly new ideas.  Challenges of generating new business models Business model innovation is not about looking back, because the past indicates little about what is possible in terms of future business models.  Challenges of generating new business models Business model innovation is not about looking to competitors, since business model innovation is not about copying or benchmarking.  Challenges of generating new business models Business model innovation is about challenging prevailing attitude to design original models that meet unsatisfied, new, or hidden customer needs.  The Ideation Process TEAM IMMERSION EXPANDING CRITERIA PROTOTYPING COMPOSITION SELECTION  Team composition Members should be diverse in terms of: seniority, business unit represented, age, customer knowledge, and experience level, professional expertise.  Immersion Go through an immersion phase, which could: – include general research, – studying customers or prospects, – inspecting new technologies or assessing existing business models. Immersion could last several weeks or could be as short as a couple of workshop exercises (e.g. the Empathy Map).  Expanding During this phase the team: Expands the range of possible solutions, Aiming to generate as many ideas as possible. Any of the nine business model blocks can serve as a starting point The goal of this phase is quantity, not quality. Enforcing brainstorming rules will keep people focused on generating ideas rather than on critiquing too early in the process  Criteria selection After expanding the range of possible solutions, the team should: Define criteria for reducing the number of ideas to a manageable few. The criteria will be specific to the context of your business, but could include some Criteria  Criteria selection Generating many business ideas and select one using the following sheet as follows: Criteria Idea Profita Average Clarity Usability Stability Scalability Stickiness Integration bility A B C  Criteria to Select the Best Idea One of the challenges that every innovative leader faces is how to select among different ideas that emerge during the ideation process. Criteria to Select the Best Idea 1. Clarity Leaders can select the idea that makes the fewest assumptions. By choosing an idea that has the fewest unknowns a leader can safeguard against surprises and disasters. Criteria to Select the Best Idea 1. Clarity Leaders can select the idea that makes the fewest assumptions. Of course, the simplest solution may not be the most challenging. Criteria to Select the Best Idea 2. Usability Does the idea fulfil a practical need? Is it utilitarian? Does it answer some particular problem or meet some particular market demand.  Criteria to Select the Best Idea 2. Usability If it does, is it likely that the idea can find a market niche? The practicality, usability, and marketability of an idea are crucial. Criteria to Select the Best Idea 3. Stability Does the idea have some market stability over time, or is it a fad? Ideas that become antiquated before they even reach market are ideas that should be selected with extreme caution. Criteria to Select the Best Idea 4. Scalability Is the prototype capable of being scaled? Can it be duplicated with consistency, meet continuous standards, and be replicated? Criteria to Select the Best Idea 4. Scalability Is the prototype can be produced and produced again without constantly being reinvented or adjusted? Criteria to Select the Best Idea 5. Stickiness Can this idea become a habit or a trend? Is the idea or prototype capable of bringing to market a product that will be driven over time by the customers' sense that it is a necessity? Criteria to Select the Best Idea 6. Integration Is this idea fully integrated with the market strategy? Often ideas and prototypes are wonderful in their own but may not receive the market support necessary to sustain the viability of the effort. Criteria to Select the Best Idea 7. Profitability This is usually what everyone focuses on. Competing ideas are always ranked by their perceived earning potential, but the answer is not always clear. Criteria to Select the Best Idea 7. Profitability It’s important for the innovation leaders to keep an eye not only on an idea's potential and revenue opportunity, but also on the other factors discussed above. ChatGPT Recommendation Business Model Canvas Thinking Sequence  7 4 Business Model 8 2 1 Canvas 1 2 Thinking 6 3 Sequence 9 5 Epicenters of Business Model Innovation Resource-driven, Offer-driven, Customer-driven, and Finance-driven.  * Each one of the four epicenters can serve as the starting point for a major business model change Business Models * Each can have a powerful impact on the other Innovation eight building blocks. Starting * Business model innovation can emerge from Points several epicenters. General notes * Change often originates in areas identified through a SWOT analysis Resource-driven Resource-driven innovations originate from an organization’s existing infrastructure or partnerships to expand or transform the business model. Example: Amazon Web Services Offer-driven Offer-driven innovations create new value propositions that affect other business model building blocks. Example: Cemex, a Mexican cement maker Customer-driven Customer-driven innovations are based on customer needs, facilitated access, or increased convenience. Example: : “23 and Me” brought personalized DNA testing Finance-driven Innovations driven by new revenue streams, pricing mechanisms, or reduced cost structures. Example: Xerox, leased the machines Multiple-epicenter driven Innovations driven by multiple epicenters can have significant impact on several other building blocks. Example: Hilti, the global manufacturer  The Power of “What If” Questions The status quo stifles imagination.  Challenge conventional assumptions with “what if” questions. “What if” questions help us break free of constraints imposed by current models. “What if” questions are simply starting points. Brainstorming  Brainstorming Rules Successful brainstorming requires following a set of rules.  Stay focused  Enforce rules  Think visually  Prepare  Brainstorming Rules  Stay focused: – Start with a well-honed statement of the problem at hand. Ideally, this should be articulated around a customer need. – Don’t let the discussion stray too far; – always bring it back to the problem statement.  Brainstorming Rules  Enforce rules – Clarify the brainstorming rules upfront and enforce them, The most important rules are: “Defer judgment,“ “Encourage wild ideas.“ “One conversation at a time,“ “Go for quantity,“ “Be visual,“ and – Facilitators should enforce the rules.  Brainstorming Rules  Think visually – Write ideas down or sketch them out on a surface everyone can see. – A good way to collect ideas is to pin them down on Post-it notes and stick these to a wall. – This allows you to move ideas around and regroup them.  Brainstorming Rules  Prepare – Prepare for brainstorming with some sort of immersion experience related to the problem at hand (This could be a field trip, discussions with customers, or any other means of immersing the team in issues related to your problem statement. Adapted from an interview with Tom Kelley of IDEO in FastCompany magazine: “Seven Secrets to Good Brainstorming“  Warm-Up: The Silly “Cow Exercise” it can be helpful to start an ideation session with a warm-up such as the “Silly Cow exercise”.  The Silly Cow Exercise: How it works? 1. Instruct participants to sketch out three different business models using a cow. 2. Ask them to first define some characteristics of a cow  (produces milk, eats all day, makes a mooing sound, etc.). 3. Tell them to use those characteristics to come up with an innovative business model based on a cow.  The Silly Cow Exercise: How it works? 4. Give them three minutes. 5. Keep in mind that this exercise can backfire, as it is indeed quite silly. But it has been tested with senior executives, accountants, risk managers, and entrepreneurs, and usually is a great success.  The Silly Cow Exercise: How it works? 6. The goal is to take people out of their day-to-day business routines and show them how readily they can generate ideas by disconnecting from orthodoxies “traditional thinking” and letting their creativity flow. Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios. Customer Insights  Building Business Models on Customer Insights Companies invest heavily in market research, However, often wind up neglecting the customer perspective Good Business Model design which sees the business model through customers' eyes Building Business Models on Customer Insights Successful innovation requires a deep understanding of customers, including NOT ONLY LIMITED to Environment, Daily Routines, Concerns, and Aspirations  Adopting customer perspective is a guiding principle for the entire business model design process. Customer perspectives should inform our choices regarding – Value Propositions , – Distribution Channels , – Customer Relationships , and – Revenue Streams . Business Model Design challenges  (1) The challenge of innovation is developing a deeper understanding of customers rather than just asking them what they want. (2) Another challenge lies in knowing which customers to heed and which customers to ignore.  (3) Business Model innovators should AVOID focusing exclusively on existing Customer Segments and set their sights on new or unreached segments.  Business Model & Customers Needs A business model innovations succeeded precisely when it satisfied the unmet needs of customers  Business Model & Social Scientists In the field of product and service design, several leading companies such as (Intel, Nokia, and Telenor …) work with social scientists (anthropologists and sociologists) to achieve customer deep understanding to develop new and better products and services. The Empathy Map  What is Empathy Map? A tool developed by visual thinking company XPLANE. It can be called the “Customer Profiler” It helps you go beyond a customer’s demographic characteristics It develops a better understanding of environment, behavior, concerns, and aspirations.  How to Use the (Customer) Empathy Map? 1. First, brainstorm to come up with all the possible Customer Segments that you might want to serve using your business model. 2. Choose three promising candidates and then select one for your first profiling exercise. 3. Start by giving this customer a name and some demographic characteristics, such as income, marital status, and so forth.  How to Use the (Customer) Empathy Map? 4. Then, referring to the Empathy Map diagram and use a flipchart or whiteboard to build a profile for your newly-named customer by asking and answering the following six questions:  How to Use the (Customer) Empathy Map? 1. What Does She See? 2. What Does She Hear? 3. What Does She Really think and Feel? 4. What Does She Say and Do? 5. What is the Customer’s Pain? 6. What Does the Customer Gain?  (Q1) What does she see? Describe what the customer sees in her environment 1. What does it look like? 2. Who surrounds her? 3. Who are her friends? 4. What types of offers is she exposed to daily (as opposed to all market offers)? 5. What problems does she encounter?  (Q2) What does she hear? Describe how the environment influences the customer 1. What do her friends say? Her spouse? 2. Who really influences her, and how? 3. Which media Channels are influential?  (Q3) What does she really think and feel? Try to sketch out what goes on in your customer’s mind 1. What is really important to her (which she might not say publicly)? 2. Imagine her emotions. What moves her? 3. What might keep her up at night? 4. Try describing her dreams and aspirations  (Q4) What does she say and do? Imagine what the customer might say, or how she might behave in public 1. What is her attitude? 2. What could she be telling others? 3. Pay particular attention to potential conflicts between what a customer might say and what she may truly think or feel.  (Q5) What is the customer’s pain? 1. What are her biggest frustrations? 2. What obstacles stand between her and what she wants or needs to achieve? 3. Which risks might she fear taking?  (Q6) What does the customer gain? 1. What does she truly want or need to achieve? 2. How does she measure success? 3. Think of some strategies she might use to achieve her goals. Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios.  Hewlett- Packard The meeting room walls are plastered with large posters on which a group of 14 people are assiduously sketching drawings and pasting Post-it notes. Though the scene almost has the atmosphere of an art class, it’s taking place at the headquarters of Hewlett-Packard, the technology products and services giant.  The Value of Visual Thinking Visual thinking is crucial to working with business models By visual thinking we mean using visual tools such as pictures, sketches, diagrams, and Post-it notes to construct and discuss meaning. Because business models are complex concepts composed of various building blocks and their interrelationships, it is difficult to truly understand a model without sketching it out. Visual techniques give “life” to a business model and facilitate co-creation.  Visual Thinking techniques Visualizing with Post-it Notes Here are three simple guidelines: 1. Write only one element per post-it note, 2. Write only a few words per note to capture the essential point, and 3. Use thick marking pens. Using thick markers is more than a detail: it prevents you from putting too much information on a single Post-it , and makes for easier reading and overview.  Visual Thinking techniques Visualizing with Drawings: 1. Drawings can be even more powerful than Post-it notes:, 2. even crude drawings, make things tangible and understandable. 3. People interpret simple stick figures far more easily than abstract concepts expressed in text. Different Types of Visualization for Different Needs Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios.  Prototyping Prototyping is a powerful tool for developing new, innovative business models. Like visual thinking, it makes abstract concepts tangible and facilitates the exploration of new ideas. Prototype business models may be thought-provoking—even a bit crazy—and thus help push our thinking.  Prototyping Prototyping comes from the design and engineering disciplines, where it is widely used for product design, architecture, and interaction design. It is less common in business management because of the less tangible nature of organizational behavior and strategy.  Prototyping Prototyping is tools that serve the purpose of 1. Discussion, 2. Inquiry, or 3. Proof of Concept.  Prototyping A business model prototype can take the form of: A simple sketch, A fully thought-through concept described with the business model canvas, or A spreadsheet that simulates the financial workings of a new business.  Prototypes at Different Scales A business model prototype can be anything from a rough sketch of an idea on a napkin to a detailed Business Model Canvas to a field-testable business model. It’s about exploring new and perhaps silly, even impossible ideas by adding and removing elements of each prototype. You can experiment with prototypes at different levels.  Business Model Prototyping Business model prototyping is about a mindset we call “design attitude.” It stands for an uncompromising commitment to discovering new and better business models by sketching out many prototypes —both rough and detailed—representing many strategic options.  Prototypes Levels Napkin sketch Elaborated canvas Business case Field-test Draw a simple Develop a more Turn the You’ve decided business model elaborate detailed canvas on a potential canvas. Describe canvas to into a new business the idea using explore all the spreadsheet to model, and now only key elements estimate your want to field- elements needed to make model’s earning test some the business potential. aspects. model work. Napkin Sketch Outline the idea Include the Value Proposition Include the main Revenue Streams Elaborated Canvas Develop a full Canvas Think through your business logic Estimate the market potential Understand the relationships between Building Blocks Do some basic fact-checking Business Case Create a full Canvas Include key data Calculate costs and revenues Estimate profit potential Run financial scenarios based on different assumptions Field-test Prepare a well-justified business case for the new model Include prospective or actual customers in the field test Test the Value Proposition, Channels, pricing mechanism, and/or other elements in the marketplace Minimum Viable Product (MVP)  Minimum Viable Product (MVP) is an early version of a new product that includes only the essential features necessary to meet the needs of early adopters and gather feedback for future development.  Minimum Viable Product (MVP) The concept of an MVP is rooted in the lean startup methodology, where the goal is to quickly develop and release a product with minimal features to test its viability in the market. By launching a simplified version.  Key Characteristics of MVP 1. Minimal Features. 2. Quick Development. 3. Testing and Learning. 4. Iterative Development.  MVP vs Prototype MVP Prototype Purpose release a functional version of a visualize and test specific aspects of a product with just enough features to product's design, functionality, or user satisfy early adopters and gather interface feedback Functionality An MVP is a working product with A prototype is a model or minimal but essential features that representation of a product that may provide value to users. It is a more not have full functionality. It is used to advanced and functional version demonstrate and test specific design compared to a prototype. elements or user interactions. Stage in after the initial prototyping and design created in the early stages of Development: phases development to explore ideas and concepts before committing to full development. No time to innovate  Businesspeople thinking Businesspeople are likely to display one of two reactions to this process of business model inquiry. 1. Some might say, “Well, that is a nice idea, if we only had the time to explore different options.“ 2. Others might say that a “Market research study would be a good way to come up with new business models”. The first reactions supposes that “business as usual” or incremental improvements are sufficient to survive in today’s competitive environment. This path leads to weakness. Businesses that fail to take the time to develop and prototype new, groundbreaking business model ideas risk being sidelined or overtaken by more dynamic competitors—or by insurgent challengers appearing, seemingly, from nowhere.  The second reaction assumes that data is the most important consideration when designing new strategic options; “It is not”  Market research is a single input in the long and difficult process of prototyping powerful new business models with the potential to outperform competitors or develop entirely new markets.  New thinking New game-changing business models emerge from deep and continues inquiry. “Spirit of Inquiry” is called Spirit of Inquiry design attitude, because it is so central to the design professions,  “If you freeze an idea too quickly, you fall in love with it. If you refine it too quickly, you become attached to it and it becomes very hard to keep exploring, To Keep Looking for Better. The crudeness of the early models in particular is very deliberate. Jim Glymph, Gehry Partners it is important to think through a number of basic business model possibilities before developing a business case for a specific model. Case Study Review Book Page 169 ( pdf file 175) Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios. Storytelling  Storytelling In our daily life as parents, as colleagues, and as friends, we are telling stories, but actually ……. we avoid as businesspeople using stories in our roles. Storytelling is an undervalued and underused art in the world of business.  Why Storytelling? Resistance is one likely reaction to an unfamiliar model. By their nature, new or innovative business models can be difficult to describe and understand as they challenge the status quo by arranging things in unfamiliar ways. They force listeners to open their minds to new possibilities. Therefore, describing new business models in a way that overcomes resistance is crucial.  1 2 3 Why Storytelling? Introducing the New. Pitching to Investors Engaging Employees  Why Storytelling? (1) Introducing the New. Ultimately, managers are interested in numbers and facts, but having the right story can win their attention. A good story is a compelling way to quickly outline a broad idea before getting caught up in the details.  Why Storytelling? (2) Pitching to Investors. What investors and other shareholders want to know is: How will you create value for customers? How will you make money doing so? That’s the perfect setting for a story. It’s the ideal way to introduce your venture and business model before getting into the full business plan.  Why Storytelling? (3) Engaging Employees. When an organization transitions from an existing business model to a new business model, organization needs to powerfully engage its employees and convince collaborators to follow. People need a crystal-clear understanding of the new model and what it means for them.  Why Storytelling? (3) Engaging Employees. That is where traditional text-based PowerPoint presentations usually fail.  Why Storytelling? (3) Engaging Employees. People are moved more by stories than by logic. Introducing a new business model through an engaging story- based presentation (delivered with PowerPoint, drawings, or other techniques) is far more likely to connect with listeners.  Why Storytelling? (3) Engaging Employees. Capturing people’s attention and curiosity opens the way for in-depth presentations and discussions of the unfamiliar.  Making Business Models Tangible? The goal of telling a story is to introduce a new business model in an engaging, tangible way. Keep the story simple and use only one protagonist (hero). Depending on the audience, you can use a different protagonist with a different perspective.  Storytelling possible starting points Explain the business model in the Cast a customer as the protagonist form of a story told from an and tell the tale from her point of employee’s perspective. view. Storytelling possible starting points Explain the business model in the form of a story told from an employee’s perspective. Use the employee as the protagonist who demonstrates why the new model makes sense Either to solve customer problems or makes better or different use of resources, activities, or partnerships. Storytelling possible starting points Cast a customer as the protagonist and tell the tale from her point of view. Show the challenges customer faces & which jobs must get done, then outline how your organization creates value for her. Add some drama and emotion to the story and describe how your organization is making her life easier.  Storytelling Challenge The biggest challenge with stories told from a customer perspective is keeping them authentic and avoiding a facile or patronizing tone. Be honest and transparent. Be specific Be respectful  Storytelling Challenge Be honest and transparent. Don't sugarcoat the customer's experience, even if it is negative. The customer will appreciate your honesty, and it will make them more likely to trust you. Be specific. Don't just tell the customer what happened, tell them how it made them feel. This will help the customer to connect with the story on a personal level. Be respectful. Remember that the customer is the protagonist of the story. Don't try to take over the story or make it about yourself. Let the customer tell their own story in their own words. Storytelling Techniques Storytelling Techniques Storytelling Techniques Storytelling Techniques Storytelling Techniques Storytelling Techniques Group Homework. Storytelling your business model Six Business Model Design Techniques 1. Ideation, 2. Customer Insights, 3. Visual Thinking, 4. Prototyping, 5. Storytelling, and 6. Scenarios.  Scenarios The scenario is a thinking tool that helping to reflect on business models of the future. Scenario providing concrete future contexts for which we can invent appropriate business models. This is usually easier and more productive than free brainstorming about possible future business models. The goal of combining scenarios with business model innovation efforts is to help your organization prepare for the future.  Scenarios Types 1. Describes different customer settings “Customer Scenario” 2. Describes future environments “Environments Scenario”  Customer Scenario First type of is Describes different customer settings: – How products or services are used, – What kinds of customers use them, or – Customer concerns, – Desires, and – Objectives  Customer Scenario Such scenarios build on “customer insights” but go a step further by incorporating knowledge about customers into a set of distinct, concrete images, by describing a specific situation, A customer scenario makes customer insights tangible.  Environments Scenario A second type of scenario describes future environments in which a business model might compete. The goal here is not to predict the future, but rather to imagine possible futures in concrete detail. This exercise helps innovators reflect on the most appropriate business model for each of several future environments.  Future Scenarios general process 1) Develop a set of future 2) Describe each scenario 3) Workshop develop one scenarios based on two or with a story that outlines or more appropriate more main criteria. the main elements of the business models for each scenario scenario  Scenarios development process 1. Scenarios should be developed before the business model workshop begins. 2. Ideally you should develop between two and four different scenarios based on two or more criteria in order to run a good business model scenario workshop. 3. Each scenario should be titled and described with a short, specific narrative outlining the main elements. 4. Begin the workshop by asking participants to review the scenarios. 5. develop an appropriate business model for each.  Scenarios development process If the objective is to maximize a group’s understanding of all the potential futures, (6) everyone to participate in a single group and let them collectively develop different business models for each scenario. If the objective to generating a set of very diverse future business models, (6) you might decide to organize participants into different groups that work in parallel on separate solutions for the various scenarios.  1) Describing, 5) Explaining techniques that What you 2) Discussing, and facilitate the design and knew now? invention of new business 3) Designing Business model, models. 4) Describing patterns, What’s Next ? Evaluating Business Models  Business Model assessment types 1) Assessing a business model from a big picture perspective 2) Assessing business model from a building block perspective (SWOT) analysis Both are complementary activities Big picture assessment: amazon.com 2005 Big picture assessment: amazon.com 2006  SWOT analysis Strength Weakness Opportunities Threats  SWOT Analysis  SWOT Analysis Tips & Exercise Do’s Don’ts  Be analytical and specific. х Try to disguise weaknesses.  Record all thoughts and ideas. х Merely list errors and mistakes.  Be selective in the final evaluation. х Lose sight of external influences and trends.  Choose the right people for the exercise. х Allow the SWOT to become a blame-laying  Choose a suitable SWOT leader or facilitator. exercise.  Think out of the box х Ignore the outcomes at later stages of the  Be open to change planning process.  Points to Consider Keep your SWOT short and simple but remember to include important details. When you finish your SWOT analysis, prioritize the results by listing them in order of the most significant factors that affect you / your business to the least.  Points to Consider Get multiple perspectives on you / your business for your SWOT analysis. Ask for input from your employees, colleagues, friends, suppliers, customers and partners. Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or a problem you need to solve. You can then conduct separate SWOT analyses on individual issues and combine them. Business Model SWAT Assessment Analysis W. Chan Kim, Renee Mauborgne All the industries not in existence today Industries in existence today the unknown market space the known market space. Financial concept for entrepreneurs THANKS ALL BE T WISHES