Business Model Innovation Concepts Examples 3 Types of

Business Model Innovation Concepts & Examples

3 Types of Innovation 1. Product 2. Process 3. Business Model

Aspects of Business Innovation to Create Value Improving efficiencies through LEAN and other options, New Technology, Designs that are innovative and change people’s behaviours Innovation Enablers that Resource Change Access to financial resources, new warehousing or locational opportunities, new skilled staff or competencies, better deployment of capabilities and resources Innovation that captures value Focusing on effectiveness innovations and business model processes to appropriate value that is under-utilized, unassigned, or not value priced

WHY CRITICAL TO CONSIDER

Futures: Innovation & Effectiveness How d oy your c ou profile ustom e What rs? demog raphic s? HINDSIGHT What do you know about your customers? INSIGHT How does this enable you to get closer to their needs? What other customers or needs have you ignored so far? FORESIGHT How might this inform what you will need next? What future product, process or business model? Business Model Innovation is about transforming key elements of your business or inventing completely new ways of doing business

Business Model Innovation 1: Optional revenue logics • Customer focus – traveller • Scale = purchasing discounts • Joint promotion of cheaper carrier (Jet. Star) • Operational excellence + safety gives customer loyalty • Brand association linked to nationalism – customer loyalty • Customer focus – airports • Reverse auctioning of landing rights – positive cash flow • Operational excellence – low operating costs • Listing fees for all on board goods – positive cash flow Revenue logic: Build traveller loyalty + alternative cheaper carrier Revenue logic: Profit sharing with the airport + hybrid customer model What other customer segments have you not thought of? How else could you deliver your capabilities & offerings?

Business Model Innovation 2: Customer Knowledge A business model is the recipe of your business built around an in-depth customer / consumer knowledge and insight of their needs “Last year one million quarter inch drills were sold. Not because people wanted quarter inch drills but because they wanted quarter inch holes. ” President of Black & Decker “What we sell is the ability of a 43 -year-old accountant to dress in black leather, ride through small towns and have people be afraid of him. ” Harley-Davidson marketing executive

Value derived from the appreciation of the offering Value derived from the possession of the offering Value derived from the deployment of the offering © Copyright Göran Roos 2011 Instrumental value Intrinsic value Extrinsic value

Geofabric product manufactured in Australia

Exercise: Apply this thinking to two companies at your tables and consider how you might shift up the value proposition with the positioning of your offerings?

Clipping the Ticket Front – End Services Consulting Business Problem Solving Product Design Back-End Services Supplier Management Production & System Integration Product Delivery Installation & Commissioning Product Life Cycle On-site Management Asset Manage ment Product Sales & Operations Where in this value chain are you not clipping the ticket? What are your options for appropriating value? Process Outsourcing

Hallmark of a good business model Where price, cost cutting or volume are not the only options considered, and where Your profit exceeds your revenue from the base offering