© Copyright 2006

By InnovationLabs Business Model Innovation

Business Model

byLangdon Morris

Innovation

© Copyright 2006

By InnovationLabs Business Model Innovation

modelswhy

?

© Copyright 2006

By InnovationLabs Business Model Innovation

“point of view

80 IQ points”

is worth

Alan Kay

© Copyright 2006

By InnovationLabs Business Model Innovation

© Copyright 2006

By InnovationLabs Business Model Innovation

© Copyright 2006

By InnovationLabs Business Model Innovation

Chip capacity (Moore’s Law) ...Use of Fax Machines ...Use of Cell Phones ...Use of Internet …Information Excess ...Growth of Human Population ...Consumption of Resources …Increasing Pollution …

Exponential Change!

© Copyright 2006

By InnovationLabs Business Model Innovation

2004-11-08

New Scientific Consensus: Arctic Is Warming Rapidly

REYKJAVIK -- The Arctic is warming much more rapidly than previously known, at nearly twice the rate as the rest of the globe, and increasing greenhouse gases from human activities are projected to make it warmer still, according to an unprecedented four-year scientific study of the region conducted by an international team of 300 scientists.

© Copyright 2006

By InnovationLabs Business Model Innovation

Human Population: Fundamentals of Growth Population Growth and Distribution

In 2000, the world had 6.1 billion human inhabitants. This number could rise to more than 9 billion in the next 50 years. For the last 50 years, world population multiplied more rapidly than ever before, and more rapidly than it will ever grow in the future.

Anthropologists believe the human species dates back at least 3 million years. For most of our history, these distant ancestors lived a precarious existence as hunters and gatherers. This way of life kept their total numbers small, probably less than 10 million.

http://www.prb.org/Content/NavigationMenu/PRB/Educators/Human_Population/Population_Growth/Population_Growth.htm

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.de.tomshardware.com/business/20030219/images/17.jpg

© Copyright 2006

By InnovationLabs Business Model Innovation

http://qsi.cc/blog/archives/cat_finance_economics.html

© Copyright 2006

By InnovationLabs Business Model Innovation

How you manage here

Is not the same as how you manage ...

here

chan

ge g

ap

© Copyright 2006

By InnovationLabs Business Model Innovation

You are here*

*Manage accordingly

© Copyright 2006

By InnovationLabs Business Model Innovationcomplexity

complexitycomplexitycomplexity

complexitycomplexity

© Copyright 2006

By InnovationLabs Business Model Innovation

Bethlehem Steel1857 - 2003

ATT1885 - 2005

Sears1886 - 2005

Oldsmobile1897 - 2004

Compaq1982 - 2002

Creative Destruction

Volvo1927 - 1999

Webvan1998 - 2001

DEC1957 - 1998

Netscape1994 - 1998

etc., etc., etc.

Chrysler1925 - 1998

© Copyright 2006

By InnovationLabs Business Model Innovation

Auto Industry

© Copyright 2006

By InnovationLabs Business Model Innovation

Sept 8, 2006

© Copyright 2006

By InnovationLabs Business Model Innovation

1970

Auto Industry Market Share: US Market

1990 20001980

© Copyright 2006

By InnovationLabs Business Model Innovation

© Copyright 2006

By InnovationLabs Business Model Innovation

hard to do

?

© Copyright 2006

By InnovationLabs Business Model Innovation

hard to do

?

The Prelude: Delphi in Bankruptcy January 1, 2006: 27,500 Unionized WorkersJanuary 1, 2007: 7,400 Unionized Workers

The Real Show: GM in Bankruptcy? January 1, 1990: 358,000 Unionized WorkersJanuary 1, 2006: 137,000 Unionized WorkersJanuary 1, 2010: ??? Unionized Workers

© Copyright 2006

By InnovationLabs Business Model Innovation

customersupplier

Traditional Products and Services

Traditional Distribution

The Past

Feed back

© Copyright 2006

By InnovationLabs Business Model Innovation

customersupplier

Exchange of information and knowledge, bi-directional, in real time ... Before the sale, during the sale, after the sale ... Face to face, at a distance, across the internet ...

The Knowledge Channel

The knowledge channelTraditional Products and Services

Traditional Distribution

Feed back

© Copyright 2006

By InnovationLabs Business Model Innovation

?

What does GM need?

A new Business

Model

© Copyright 2006

By InnovationLabs Business Model Innovation

© Copyright 2006

By InnovationLabs Business Model Innovation

model?

whatbusinessis a

© Copyright 2006

By InnovationLabs Business Model Innovation

brand

technology applied

products & servicesways of communicating

supply chain

busi

ness

mod

el

+organization

a business is a system

that occupies a niche in an ecosystem

© Copyright 2006

By InnovationLabs Business Model Innovation

a business model

A business model describes and how a company is organized and operates to deliver those experiences.

… creates what customers experience. Those experiences shape the game of business.

Business Model Warfare is intentionally creating customer experiences that result in competitive advantage.

© Copyright 2006

By InnovationLabs Business Model Innovation

InnovativeBusiness

Models

StagnantBusinessModels

© Copyright 2006

By InnovationLabs Business Model Innovation

This is a mobile telephone.

This car company is a telephone company.

* Motorola Digital DNA

© Copyright 2006

By InnovationLabs Business Model Innovation

This is a mobile telephone.

This clothing company is a telephone company.

© Copyright 2006

By InnovationLabs Business Model Innovation

Now available:

E-mail

Satellite TV

Internet

This is a portable telephone

This airline manufacturer is a telecommunications provider.

© Copyright 2006

By InnovationLabs Business Model Innovation

A Parable of Business Model Warfare

10 companies succeeded.They changed their business model.

10 companiesfailed.

They stayed with their

original business model.

The difference betweensuccess and failure

in Venture Capital investing.

© Copyright 2006

By InnovationLabs Business Model Innovation

modelingthe market

© Copyright 2006

By InnovationLabs Business Model Innovation

Dif

fere

nti

ated

/Cu

sto

miz

edC

om

mo

dity / M

ass

High Wealth

Low Wealth

Used Cars

Rolls Royce

GMFord

ToyotaHonda

Public Transportation

LexusMercedes

BMW

Transportation Market

Ferrari

© Copyright 2006

By InnovationLabs Business Model Innovation

Dif

fere

nti

ated

/Cu

sto

miz

edC

om

mo

dity / M

ass

High $$

Low $$

Chevrolet

Pontiac

Buick

Oldsmobile

Cadillac

GM Business Model: 1925 - 1980

Used Cars

Public Transportation

GM

© Copyright 2006

By InnovationLabs Business Model Innovation

Dif

fere

nti

ated

/Cu

sto

miz

edC

om

mo

dity / M

ass

High Wealth

Low Wealth

Chevrolet

Pontiac

Buick

Saturn

Cadillac

GM Business Model: 2006

Saab

Hummer

Onstar

GM

Fin

anc

e

Used Cars

Public Transportation

© Copyright 2006

By InnovationLabs Business Model Innovation

GM Profit: 1975

Making&

SellingCars

FinancingCars

© Copyright 2006

By InnovationLabs Business Model Innovation

GM Profit: 2006

FinancingCars

Making&

SellingCars

$500 million $2,500 million

© Copyright 2006

By InnovationLabs Business Model Innovation

Profit: 2020?

Tele-communi-

cationsin Cars

FinancingCars

0 million

$2,500 million

Making&

SellingCars

$25,000 million

QuickTimeª and aTIFF (Uncompressed) decompressorare needed to see this picture.

© Copyright 2006

By InnovationLabs Business Model Innovation

IBM Business Model

Ser

vice

s

Fin

an

ce

So

ftwa

re

Ha

rdw

are

2004

Se

rvic

es

Fin

an

ce

So

ftwa

re

Ha

rdw

are

1990

© Copyright 2006

By InnovationLabs Business Model Innovation

IBM“Industry contraction in recent years has forced IT companies to choose between being high value innovation players or high volume distributors of other people’s intellectual capital. Companies that are caught in middle run the risk of being hammered from both below and above.

“IBM is an innovation company.”

IBM Annual Report 2004

See also:IBM PC DivisionATTCompaqSearsLevi StraussK-MartOldsmobileMercuryBuick

© Copyright 2006

By InnovationLabs Business Model Innovation

Quality

Price

Macy’s

Target

eBayGarage Sale

WalMartDollarStore

Tiffany

Sears

Modeling the Retail Industry

Thrift Store

Servic

e Thre

shold

Louis Vuitton

Gucci

?

Nordstrom

© Copyright 2006

By InnovationLabs Business Model Innovation

Incremental Breakthrough Product & Technology

Business Model

New Venture

time

© Copyright 2006

By InnovationLabs Business Model Innovation

Langdon MorrisInnovationLabs

Lmorris@innovationlabs.comwww.innovationlabs.com

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.wheelsafe.co.za/4b5c8e10.jpg

http://www.davesdaily.com/

http://www.funtown.com/signs2/pic.jpg

It’s Confusing to Deal with Change …

In Summary:

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg

New Business AheadModels

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg

Changes Ahead!

© Copyright 2006

By InnovationLabs Business Model Innovation

http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg

Thank You!