CEO DAY 2014 BUSINESS MODELING IT’S YOUR CHOICE

VUJÀDÉ Vujàdé is looking for new solutions. Critically questioning existing structures and behavior. Looking at something from a different or an unusual point of view. In other words, Vujàdé stands for innovation.

INNOVATION SUPPORT

•  CONSULTING

•  TRAINING

•  CO-CREATION

TEAM

JASPER BOUWSMA � STRATEGY � INNOVATION � INCUBATION � BMGEN

JOHN FORSLUND � APPS & SERVICES � GO-TO-MARKET � MOBILE � USER EXPERIENCE

OLIVER GYR � MOBILE � CROSS-PLATFORM

SERVICES � MARKETING

JUDITH WIMMER � WEB � TECHNOLOGY � CUSTOMER

EXPERIENCE � PROCESS DESIGN

ERIC KUENZI � LEGAL � STARTUP � SERIAL

ENTREPRENEUR

OUR TOPIC TODAY

BUSINESS MODELING

ALEXANDER OSTERWALDER A SWISS BUSINESS BOOK AUTHOR

CO-CREATED BY 470 PRACTITIONERS FROM 45 COUNTRIES

BUSINESS MODEL GENERATION & VALUE PROPOSITION DESIGN

2010 2014

3 TRACKS 11:30-12:15

#2 BMGEN

ADVANCED

#3 CUSTOMER

FOCUS

#1 BMGEN BASICS

? !

#1 BMGEN BASICS WITH JOHN

Business Model Generation •  Tool: Business Model Canvas •  Case: Nespresso •  Discussion

2010

#1 BMGEN BASICS KEY LEARNINGS

•  A Business Model can be described with 9 building blocks •  Tell the story of your business model:

elements need to be connected (no orphans) •  Business Model ≠ Revenue Model •  Don’t make it an academic exercise, it’s about the discussion

which element to place where

#2 BMGEN ADVANCED WITH JASPER

•  Principles & Example Cases •  7 Business Model Questions •  Q&A

1.  Cost structure 2.  Revenues 3.  Earning & spending 4.  Switching costs

5.  Activities 6.  Scalability 7.  Protection

#2 BMGEN ADVANCED KEY LEARNINGS

•  The BMC is not an academic exercise •  Overview of business model mechanics •  You can use the business model mechanics •  as design constraints to develop new business model

prototypes •  as 7BM-questions to assess your business model •  as trigger questions to iterate your business model

#3 CUSTOMER FOCUS WITH JUDITH

•  Business Model Canvas & Value Proposition Canvas

•  Customer Profile: Jobs, Gains, Pains •  Value Map: Products & Services,

Gain Creators, Pain Relievers •  Case: Hilti

OCT 2014

#3 CUSTOMER FOCUS KEY LEARNINGS

•  Connection between the BMC and the VPC •  Various value propositions for same customer profile possible •  You can use the Value Proposition Canvas •  to explore your customer •  to identify high value jobs of your customer •  test the fit of your existing value proposition •  to develop new value propositions

#2 BMGEN

ADVANCED

#3 CUSTOMER

FOCUS

#1 BMGEN BASICS

? !

#1 BMGEN BASICS

Business Model Generation •  Tool: Business Model Canvas •  Case: Nespresso •  Discussion

2010

#1 BMGEN BASICS AGENDA

Exercise: Case Study Nespresso

Wrap up

The Business Model Canvas

QUESTION HOW MUCH DOES 1KG COFFEE COST?

CHF 6.95

CHF 95.-

WHY HAS NESPRESSO BEEN SO SUCCESSFUL?

NESPRESSO CHANGED THE BUSINESS MODEL FOR COFFEE

2013 USD4.0B+ BY A SINGLE PRODUCT

30% CAGR OVER A DECADE

DISCUSS & DESCRIBE WHAT YOU THINK NESPRESSO’S BUSINESS MODEL IS.

!!

!!

!!

!!

!!

BLAH BLAH BLAH BLAH BLAH BLAH

Business Model

≠! Business Case or Plan

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

DIFFERENT LENSES

Reality check & Pitch Tool

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

DIFFERENT LENSES: FOUNDER

Value

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Benefit Identity

Price

DIFFERENT LENSES: CUSTOMER

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Sustainable Advantages Market Size

Profitability

Potential Traction

DIFFERENT LENSES: INVESTORS

#1 BMGEN BASICS AGENDA

Exercise: Case Study Nespresso

Wrap up

The Business Model Canvas

EXERCISE

Describe the Business Model of Nespresso using the Business Model Canvas Groups of 2 or 3 •  Discuss with your partner •  Place the stickers on the

Business Model Canvas •  5’

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

INSIGHTS & MECHANICS OF NESPRESSO’S BUSINESS MODEL

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Cheap enough

high-quality machines

Loyalty + lock-in

Pods

Coffee sold through own channels

Sell coffee with much

higher margin Cut of the machine revenue

Machines sold

through retail

Nestle does not make

these

in CH

High Quality growers

Protection

Premium Segment

Protection

NESPRESSO EVOLUTION

WE ARE MOVING FROM PORTFOLIOS OF PRODUCTS TO PORTFOLIOS OF BUSINESS MODELS.

VIDEO VISUALIZE YOUR BUSINESS MODEL

www.youtube.com/user/businessmodeltv

#1 BMGEN BASICS AGENDA

Exercise: Case Study Nespresso

Wrap up

The Business Model Canvas

#1 BMGEN BASICS KEY LEARNINGS

•  A Business Model can be described with 9 building blocks •  Tell the story of your business model:

elements need to be connected (no orphans) •  Business Model ≠ Revenue Model •  Don’t make it an academic exercise, it’s about the discussion

which element to place where

#2 BMGEN

ADVANCED

#3 CUSTOMER

FOCUS

#1 BMGEN BASICS

#2 BMGEN ADVANCED WITH JASPER

•  Principles & Example Cases •  7 Business Model Questions •  Q&A

1.  Cost structure 2.  Revenues 3.  Earning & spending 4.  Switching costs

5.  Activities 6.  Scalability 7.  Protection

BUSINESS MODEL PRINCIPLES & CASES

1.  Better cost structure

2.  Recurring revenues

3.  Earning before spending

4.  Switching costs

5.  Leverage the work of others

6.  Easy scalability

7.  Protection from competition

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

EASYJET’S LOW COST STRUCTURE

Low operating costs Low personal

costs Low fleet costs

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

SKYPE’S LOW COST STRUCTURE

Software development Partner fees

Marketing

Telco

companies

Hardvware companies

Payment

providers

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

NESPRESSO’S RECURRING REVENUES

Transactional Sales

Recurring

Revenues

Base Product

Consumable

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

HP’S RECURRING REVENUES

Transactional Sales

Recurring

Revenues

Base Product

Consumable

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

DROPBOX’S RECURRING REVENUES

0.– Monthly fee

Premium

Basic

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

DELL’S EARNING BEFORE SPENDING

Assembling

after selling

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

NESPRESSO’S SWITCHING COSTS

Inexpensive base product

Club

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

FACEBOOKS’S LEVERAGING THE WORK OF OTHERS

0.– Revenue

Stream B

Value Proposition A

Value Proposition B

Customer A

Customer B

Connecting

Platform Connecting

Platform

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

TUPPERWARE’S LEVERAGING THE WORK OF OTHERS

Free Sales Force

Free Sales Force (Company or Individuals)

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

IKEA’S LEVERAGING THE WORK OF OTHERS

Space optimised inventory

Self-assembling

furniture

Self service shops

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

AIRBNB’S SCALABILTY ADVANTAGE

Plattform

0.- on

locations

Connecting

Platform

Locations to rent

Locations to let

Connecting

Platform

Plattform

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

APPLE’S PROTECTION FROM COMPETITION

Ecosystem

Content Partner

Production Partner

iTunes &

App-Store

Partner Mgt.

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

IPHONE’S PLATFORM ADVANTAGE

Revenue Stream A

Revenue

Stream B

Value Proposition A

Value Proposition B

Customer A

Customer B

Connecting

Platform Connecting

Platform

ASSESS YOUR BUSINESS MODEL 7 BUSINESS MODEL QUESTIONS

www.strategyzer.com

1.  Is your business model based on a game changing cost structure?

2.  Does your business model produce recurring revenues?

3.  Do you earn before you spend?

4.  How much do switching costs prevent your customers from churning?

5.  How much do you get others to do the work?

6.  How scalable is your business model?

7.  Does your business model provide built-in protection from competition?

#2 BMEN ADVANCED KEY LEARNINGS

•  The BMC is not an academic exercise •  Overview of business model mechanics •  You can use the business model mechanics •  as design constraints to develop new business model

prototypes •  as 7BM-questions to assess your business model •  as trigger questions to iterate your business model

#3 CUSTOMER

FOCUS

#1 BMGEN BASICS

#2 BMGEN

ADVANCED

? !

#3 CUSTOMER FOCUS WITH JUDITH

•  Business Model Canvas & Value Proposition Canvas

•  Customer Profile: Jobs, Gains, Pains •  Value Map: Products & Services,

Gain Creators, Pain Relievers •  Case: Hilti

OCT 2014

A Value Proposition describes the benefits customers can expect from your product & services

BUSINESS MODEL CANVAS How do you create value for your business?

VALUE PROPOSITION CANVAS How do you create value for your customer?

zoom out zoom in

CUSTOMER JOBS

GAINS

PAINS

CUSTOMER PROFILE

Work enjoyment

Time lost in maintenance

Get construction done

Safe employees

Delays

100 percent uptime

Upfront investment

Right tool for right task

Theft

Broken tools

VALUE MAP

PRODUCTS & SERVICES

PAIN CREATORS

PAIN RELIEVERS

Safety triggers against mishandling

Ergonomic, holds in hand

Long life makes overall cost cheaper over time

Robustness means less maintenance

Quality tools

CUSTOMER JOBS

GAINS

PAINS

CUSTOMER PROFILE

Work enjoyment

Time lost in maintenance

Get construction done

Safe employees

Delays

100 percent uptime

Upfront investment

Right tool for right task

Theft

Broken tools

Meeting planning schedule

Financial penalties

Profitability under control

VALUE MAP

PRODUCTS & SERVICES

PAIN CREATORS

PAIN RELIEVERS

Safety triggers against mishandling

Ergonomic, holds in hand

Long life makes overall cost cheaper over time

Robustness means less maintenance

Quality tools

Subscription based fleet management

Latest technology

Immediate tool replacement

No cost for repair and replacement

Predictable costs

VALUE PROPOSITION CANVAS

Work enjoyment

Time lost in maintenance

Get construction done

Safe employees

Delays

100 percent uptime

Upfront investment

Right tool for right task

Theft

Broken tools

Meeting planning schedule

Financial penalties

Safety triggers against mishandling

Ergonomic, holds in hand

Long life makes overall cost cheaper over time

Robustness means less maintenance

Quality tools

Subscription based fleet management

Latest technology

Immediate tool replacement

No cost for repair and replacement

Predictable costs

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Construction Companies

B2B Partner Stores

Sales of Tools

R&D

Manufact- uring Customer Service

Production

Quality Power Tools

Red Box Quality

Brand Production facilities

KEY PARTNERS

KEY ACTIVITIES

VALUE PROPOSITIONS

CUSTOMER RELATIONSHIP

CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Construction Companies

B2B Partner Stores

Red Box Quality

Sales of Tools

Brand Production facilities

R&D

Manufact- uring Customer Service

Production

Quality Power Tools

www. hilti.com

CEOs

Recurring Lease Fees

Fleet Force Lease

Contract Direct Sales

Contract Mgt

Inventory IT Systems

Repair & Maintenance

service

Fleet Mgt Service

HIGH MARGINS

#3 CUSTOMER FOCUS KEY LEARNINGS

•  Connection between the BMC and the VPC •  Various value propositions for same customer profile possible •  You can use the Value Proposition Canvas •  to explore your customer •  to identify high value jobs of your customer •  test the fit of your existing value proposition •  to develop new value propositions

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