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Why are we spending all our $ people & time on product innovation?
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Why are we spending 95% of our $/people/time on product? Business Model Innovation in the food industry AIFST Innovation: Reloaded UNSW Sydney Wed 22 Oct 2014
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Why are we spending 95% of our $, people and time on product performance innovation when we know that 95% of new products fail and only 5% succeed? In this presentation we share the ten types of innovation - what they are and what is business model innovation. Why you need to start doing it now! Some case study examples from the food industry in Australia, Asia and Globally. Presented @AIFST: Innovation Reloaded! Our challenge is to think and act more broadly in your innovation effort to truly disrupt your industry and create a sustainable competitive advantage. Several years ago Doblin Inc took three thousand things generally agreed to be innovative and compared them to mostly to each other and did that with enough cluster analytics and discovered 10 distinct types of innovation. Product Performance innovations address the value, features, and quality of a company’s offering. This type of innovation involves both entirely new products as well as updates and line extensions that add substantial value. It is only one of the Ten Types of Innovation, and it’s often the easiest for competitors to copy. Product Performance innovations that deliver long-term competitive advantage are the exception rather than the rule. The far right delivery types of innovation around Channel, Brand and Customer Experience are more important amplifiers of innovation as are Business Model Innovation and Networking (Partnering). If you can combine 4,5 or 6 or more specifically chosen ten types of innovation choosing the ones that others ignore in your industry you will get ‘disruptive’ innovation. “A business model is nothing else than a representation of how an organization makes (or intends to make) money.” Peter Drucker. Business model innovation starts with a definition and the business model canvas is a good diagrammatic common framework for designing and sharing your business model. Dish'd is a local example of Business Model Innovation where they saw opportunity to use technology to disrupt traditional business models. Set up a small team with Agility & Access to leaders, built Platforms,Partners e.g Toll and ‘lifted & launched’ 220 new lines all fully imported in under 12 months. In doing so, Dishd created a new Brand, Business, Channel, complete with a built in CRM. They saw a gap in the market, trusted their consumer understanding and launched with conviction. SF Best is a China example of Business Model Innovation. SF born in Shunde, Guangdong in 1993, now operate in China, Hong Kong, Macao, Taiwan, US, Japan, Korea, Singapore, Malaysia, Thailand, Vietnam, Australia. SF Best launched fresh home delivery services in June 2014 to 11 cities in China – now 27. SF leveraged core process competency in logistics to enter into an adjacent industry - Fresh Food eTailing. Nespresso founded in 1986 as an autonomous globally managed business of the Nestlé Group is a global example of Business Model Innovation.
Transcript of Why are we spending all our $ people & time on product innovation?
Why are we spending 95% of our $/people/time on product?
Business Model Innovationin the food industry
AIFST Innovation: ReloadedUNSW Sydney Wed 22 Oct 2014
Intro:
• Consultancy– Innovation– International Business
• Learning– Masters of Entrepreneurship
& Innovation• Teaching
– Global Business Strategy
Dermott Dowling | Director | @Creatovate
Ten Types of Innovation
Sources: Larry Keeley, 2013; Doblin Inc.
A Shift in Value Creation2% of projects produce more than 90% of value…
What does frozen food, Chinese milk & George Clooney have in common?Business Model Innovation
Business Model InnovationThe Business Model Canvas
1. Why would someone want to buy something from you?2. How will you make money selling it?3. What, exactly, are the important things you need to do to pull off
the plan?
Sources: Osterwalder & Pigneur; Johnson, 2010
Who is doing it?www.dishd.com.au Brand new Business, Brand, Channel, CRM
•Opportunity to use technology to disrupt traditional business models•Set up a small team•Agility & Access to leaders•Built Platforms•Partners•220 new lines ‘lifted & launched’ in under 12 months•Brand new Brand, Business, Channel, CRMSaw a gap in the marketTrusted their consumer understandingGo with Conviction
Who else is doing it? SF BestChina example: SF Best
• SF born in Shunde, Guangdong in 1993
• Operate in China, Hong Kong, Macao, Taiwan, US, Japan, Korea, Singapore, Malaysia, Thailand, Vietnam, Australia
• Launched SF Best Fresh Home delivery services in June 2014 to 11 cities in China – now 27
• Leveraging core process competency in logistics into adjacent industry - eTailing
Who has done it?Nespresso: 10 + years of 30% YoY growth, CHF3b business
• Present in almost 60 countries• 180,000 unique customers visit online boutique every day
How do we start?1. Remember the 2 Pizzas Rule: Small Focused Teams
Ref: Jeff Bezos, Amazon.com; Scott Anthony (2013)
2. Push to learn in market “Get out of the building!”3. Measure learning, not results
“What did you learn? What do you still not know?”4. Venture fund: Sufficient funding to address critical uncertainties5. Decision makers with the right experience to guide the team
How do we start?
Ref: Osterwalder & Pigneur (2010)
1.Set the stage – storytelling, business model canvas. What is the need?
2.Immersion – Knowledge gathering – customers, techy, environment, interview experts, study potential customers and identify needs and problems
3.Inquiry – Business model prototypes, that can be explored and tested.
4.Execution – managing multiple models
5.Evolution – Scenarios, evaluating business models, continuous monitoring, evaluate, adapt or transform
When do we start?
Now! Beware complacency as someone else will disrupt you
References
Scott Anthony (2013) Five Ways to Innovate Faster http://blogs.hbr.org/2013/07/how-to-innovate-faster/ July
30 retrieved on 14/10/2014
Mark W. Johnson (2010). A New Framework for Business Models January 21, HBR Blogs
Larry Keeley, Bansi Nagji, Helen Walters (2013). Ten Types of Innovation: The Discipline of Building
Breakthroughs,
John Wiley & Sons.
Larry Keeley ( 2013) Ten Types of Innovation, YouTube, published 12 July http://youtu.be/vJ5Jq3MyXAk viewed on 14th
Oct 2014
Alexander Osterwalder & Yves Pigneur (2010) Business Model Generation John Wiley & Sons, Inc. New Jersey
Alexander Osterwalder ( 2013) A Better Way to Think About Your Business Model May 6,
http://blogs.hbr.org/2013/05/a-better-way-to-think-about-yo/ retrieved on 13.10.14
ALEXANDER OSTERWALDER (2010)
COMBINING BUSINESS MODEL PROTOTYPING, CUSTOMER DEVELOPMENT, AND SOCIAL ENTREPRENEURSHIP AUGUST
05, http://
businessmodelalchemist.com/blog/2010/08/combining-business-model-prototyping-customer-development-and-social-
entrepreneurship.html
viewed on 15/10/2014
http://www.nestle.com/csv/case-studies/AllCaseStudies/Ecolaboration-Nespresso-platform-sustainable-innovation
viewed on 13th Oct 2014
http://www.nestle-nespresso.com/about-us/facts-and-figures viewed on 13th Oct 2014
