Innovation strategy through the business model in digital
1. INNOVATION
STRATEGY
THROUGH
THE
BUSINESS
MODEL
IN
THE
DIGITAL
CASE
STUDY:
AIRBNB
Supervisor:
Peter
O’Connor
Student:
Faiz
Mimita
Monday
30
march
2015
2. INNOVATION
STRATEGY
THROUGH
THE
BUSINESS
MODEL
IN
THE
DIGITAL
CASE
STUDY:
AIRBNB
Supervisor:
Peter
O’Connor
Student:
Faiz
Mimita
Monday
30
march
2015
5. IntroducHon:
Internet
has
changed
our
world
§
Access
to
several
sales
channels
§
Access
to
informa9on
§
Access
to
interac9ve
pla;orm
§
The
community
power
§
Readap9ng
their
business
model
§
Apply
new
technology
to
transform
their
business
§
Digital
startups
are
forcing
tradi9onal
business
to
innovate
Internet
is
about
doing
everything
faster,
beWer
and
cheaper
§
Development
of
Mcommerce
7. Part
1:
What
is
my
Business
Model?
“A
business
model
describes
the
ra9onale
of
how
an
organisa9on
creates,
delivers,
and
captures
value”
Source:
Alexander
Osterwalder
and
Yves
Pigneur
–
Business
Model
Genera9on
8. Bricks
&
Mortar
Pros
Cons
Trust/authority/legi9macy
Immediate
possession
of
the
product
Low
marke9ng
cost
–
Customer
acquisi9on
cost
Shopping
is
a
social
ac9vity
Mul9ple
payment
methods
High
costs
(startup,
fixed,
opera9on…)
Perceived
as
more
expensive
Market
limita9on
Bricks
and
Mortar
9. Case
study
:
Virgin
Megastore
Suppliers
&
manufacturers
Publishers
Merchandising
One
stop
entertainment
shop:
wild
range
and
variety
of
mainly
books,
music,
electronics,
events
9ckets
Exci9ng
interac9ve
shopping
experience
Possibility
to
meet
ar9sts
Well
strategically
located
shops
Effec9ve
customer
service
Emailing
Virgin
megastore
membership:
-‐Discounts,
-‐Gies.
Mass
market
Royal9es
(Brands)
Rent
Sponsoring
of
events
Labor
Inventory
management
Stores
sales
Franchising
Royal9es
Virgin
Megastore
stores
Physical
warehouses
Marke9ng
&
branding
Human
resources
10. Pure
players
Pros
Cons
Convenience
and
9me
saving
Possibility
to
target
any
customer
Agrac9ve
rates
Unlimited
inventory
Low
startup
costs
and
fixed
costs
Green
Security
and
privacy
Profitability
/
High
customer
acquisi9on
cost
Online
reputa9on
management
Low
entry
barriers
Limited
payment
op9ons
Delivery
9me
11. Case
study
:
Amazon
Suppliers
&
manufacturers
Network
of
sellers
Publishers
Logis9c
partners
(DHL…)
Affiliates
Payment
solu9ons
Ne;lix
Spo9fy
Merchandising
IT
infrastructure,
soeware
design,
digital
content
Online
retail,
internet
services
&
kindle
Compe99ve
pricing
(low
cost)
Wide
range
of
product
and
services
Same
day
delivery
Automated
service
User
friendly
Customized
online
profiles
and
recommenda9ons
Easy
to
use
Quick
delivery
Mass
market
Students
Mothers
Labor
Supply
chain
management
Economy
of
scales
Marke9ng
&
technology
–
content
Development
of
the
pla;orm
Online
sales
Adver9sement
Ebooks
and
content
Student
membership
Market
place
commission
Mom
membership
Amazon
prime
membership
Music
subscrip9on
Amazon.com
Mobile
app
Affiliate
(Market
place)
Human:
Web
and
applica9ons
development
Intellectual:
Kindle
pla;orm
12. Bricks
&
Mortar
Pure
Players
Click
&
Mortar
1.
Limit
of
the
ecommerce
experience
2.
Consumers
looking
for
more
value
3.
Use
mobile
as
bridge
to
increase
sale
1.
Develop
brand
awareness
(use
of
social
media)
2.
Reach
broader
audience
3.
Entry
barriers
against
pure
players
Click
and
mortar
13. Click
and
mortar
Pros
Cons
Combine
the
advantages
of
brick
and
mortar
and
pure
players
Cross-‐selling
:
Robo
/
Showrooming
Trade
off
physical
stores
vs.
online
presence
Channel
conflict
High
costs
of
physical
buildings
and
large
sales
staffs
14. Case
study
:
Fnac
Major
brands
(Apple,
Bose,
Samsung,
Sony…)
Editors
(books,
music
labels,
video
games…)
Travel
agencies
(Fnac
voyages)
Service
companies
(SNCF,
Lagardère…)
Shipping
companies
(Laposte,
DHL…)
Clients
(second
hand
market)
Wholeselling
:
mul9media,
high
tech,
books,
music,
photography…,
High
Tech
Manufacturing
Services:
events
9ckets,
travel,
products
reviews
Wild
range
of
products
Kids
area
Electronics
&
games
Cultural
travels
Newsleger
Social
network
Personal
assistant
Aidefnac.com
Fnac
loyalty
program
Produc9on
and
support
Labor
Royal9es
(brands)
Rent
Sponsoring
(fes9val,
cultural
events)
Technology
Inventory
management
Marke9ng
Physical
store
sales
Online
sales
Franchising
Royal9es
Physical
store
Click
and
mag
Click
and
collect
Click
and
relais
colis
Human:
Web
and
applica9ons
development
Intellectual:
Kindle
pla;orm
Mass
market
Looking
for
high
tech
and
innova9ve
products
Family/kids
16. The
sharing
economy
Source:
The
Economist,
the
rise
of
the
sharing
economy
9th
March
2013
17. Technological
breakthroughs
(Pla;orms)
Climate
change/Resource
scarcity
(cost
of
owning
vs.
Accessing)
Rapid
urbanizaHon
(Inventory)
Demographic
and
social
change
(Pla;orm
usage)
The
sharing
economy
21. Kayak
Orbitz
Family
and
friends
for
the
seed
capital
Pla;orm
development
and
maintenance
Hosts:
generate
revenue
out
from
an
unused
accommoda9on
space.
Guests:
available
airbeds
and
couches
at
affordable
rate
especially
during
mega
event
and
a
local
customer
experience.
Public
rela9on
Affilia9on
of
new
lis9ngs
Word
of
mouth
Conference
agendees
in
San
Francisco,
New
York
and
other
US
regions
Young
leisure
travelers
in
USA
Hosts
and
guests
should
be
above
18
years
old
Website
10%
commission
paid
by
the
guest
on
each
transac9on
Breakfast
cereal
sales
AirBedAndBrea
kfast.com
Kayak
Orbitz
Airbed
and
breakfast
pla;orm
Seed
capital
Airbed
and
Breakfast
Business
Model
23. Y
Combinator
Y
Venture
Sequoia
Capital
Photographers
PayPal
WesternUnion
Effec9ve
customer
travel
experience
Affordable
rates
Availability
during
mega
events
Unused
asset
consump9on
Value
of
belonging
to
a
trusted
community
Easy
to
use
website
Cost
saving
Wide
range
of
loca9on
Airbnb
website,
app,
Airbnb
community
team
SMS,
users
review
Local
brand
ambassadors
Local
events
Online
payment
Human
resources
Servers
Photographer
Marke9ng
3%
commission
on
the
host
6
to
12%
commission
on
the
guest
Airbnb
website
Double
sided
Pla;orm
Community
of
hosts
and
guests
Strong
branding
Venture
capitalist
2010
Airbnb
Business
Model
Pla;orm
development
and
maintenance
Community
engagement
Photography
Mass
market
-‐Hosts
-‐Guests
25. Local
photographers
Venture
capitalists
Payment
solu9ons
Insurance:
Lloyd’s
of
London
Effec9ve
customer
travel
experience
Affordable
rates
Availability
during
mega
events
Unused
asset
consump9on
Value
of
belonging
to
a
trusted
community
Easy
to
use
website
an
app
Cost
saving
Wide
range
of
loca9on
Pineapple
magazine
free
of
charge
for
the
community
member
Website,
mobile
app,
community,
support
team,
SMS,
users
review…,
Local
brand
ambassadors,
Local
events,
Round-‐the-‐
clock
service
hotline,
Pineapple
magazine
Online
payment
Human
resources
Insurance
Servers
Photographer
Marke9ng
Round-‐the-‐clock
service
hotline
3%
commission
on
the
host,
6
to
12%
commission
on
the
guest,
Pineapple
magazine
sold
at
12$.
Website/app
Social
media,
Search
engine,
other
links,
local
events,
word
of
mouth,
network
effect,
referred
program,
hotline…
Double
sided
Pla;orm
Community
of
hosts
and
guests
Strong
branding
Venture
capitalists
Airbnb
Current
Business
Model
Pla;orm
development,
Local
events
and
community
engagement,
Photography,
Round-‐
the-‐clock
service
hotline,
Pineapple
magazine
edi9on
Mass
market
in
190
countries:
-‐Hosts
-‐Guests:
Leisure
travelers
(90%)
Business
travelers
(10%)
28. Local
photographers
Venture
capitalists
Payment
solu9ons
Insurance:
Lloyd’s
of
London
Concierge
Standard
values
Adapted
lisHng
to
business
travelers
Premium
service
Free
round
the
clock
for
premium
Website,
mobile
app,
community,
support
team,
SMS,
users
review…,
Local
brand
ambassadors,
Local
events,
Round-‐the-‐
clock
service
hotline,
Pineapple
magazine
Online
payment
Human
resources
Insurance
Servers
Photographer
Marke9ng
Round-‐the-‐clock
service
hotline
Premium
3%
commission
on
the
host,
Premium
6
to
12%
commission
on
the
guest,
Round
the
clock
Pineapple
magazine
sold
at
12$.
Website/app
Social
media,
Search
engine,
other
links,
local
events,
word
of
mouth,
network
effect,
referred
program,
hotline…
Double
sided
Pla;orm
Community
of
hosts
and
guests
Strong
branding
Venture
capitalists
Pla;orm
development,
Local
events
and
community
engagement,
Photography,
Round-‐
the-‐clock
service
hotline,
Pineapple
magazine
edi9on
Mass
market
in
190
countries:
-‐Hosts
-‐Guests:
Leisure
travelers
(80%)
Business
travelers
(20%)
Business
Model
:
SaturaHon
risk
30. Local
photographers
Venture
capitalists
Payment
solu9ons
Insurance:
Lloyd’s
of
London
Standard
values
Loyalty
program
Website,
mobile
app,
community,
support
team,
SMS,
users
review…,
Local
brand
ambassadors,
Local
events,
Round-‐the-‐
clock
service
hotline,
Pineapple
magazine
Online
payment
Human
resources
Insurance
Servers
Photographer
Marke9ng
Round-‐the-‐clock
service
hotline
Loyalty
program
0%
commission
on
the
host,
9
to
15%
commission
on
the
guest,
Pineapple
magazine
sold
at
12$.
Website/app
Social
media,
Search
engine,
other
links,
local
events,
word
of
mouth,
network
effect,
referred
program,
hotline…
Double
sided
Pla;orm
Community
of
hosts
and
guests
Strong
branding
Venture
capitalists
Pla;orm
development,
Local
events
and
community
engagement,
Photography,
Round-‐
the-‐clock
service
hotline,
Loyalty
program
Mass
market
in
190
countries:
-‐Hosts
-‐Guests:
Leisure
travelers
(90%)
Business
travelers
(10%)
Business
Model
:
Fierce
compeHHon
32. Local
photographers
Venture
capitalists
Payment
solu9ons
Insurance:
Lloyd’s
of
London
Local
authoriHes
Standard
values
Website,
mobile
app,
community,
support
team,
SMS,
users
review…,
Local
brand
ambassadors,
Local
events,
Round-‐the-‐
clock
service
hotline,
Pineapple
magazine
Online
payment
Human
resources
Insurance
Servers
Photographer
Marke9ng
Round-‐the-‐clock
service
hotline
Law/Lobby
firms
3%
commission
on
the
host,
6
to
12%
commission
on
the
guest
Pineapple
magazine
sold
at
12$.
Website/app
Social
media,
Search
engine,
other
links,
local
events,
word
of
mouth,
network
effect,
referred
program,
hotline…
Double
sided
Pla;orm
Community
of
hosts
and
guests
Strong
branding
Venture
capitalists
Pla;orm
development,
Local
events
and
community
engagement,
Photography,
Round-‐
the-‐clock
service
hotline,
Tax
collecHon
Mass
market
in
190
countries:
-‐Hosts
-‐Guests:
Leisure
travelers
(90%)
Business
travelers
(10%)
Business
Model
:
Legal
challenges