Reinventing Your Business

Source: Christoph Zott, Raphael Amit and Lorenzo Massa: The Business Model: Recent Developments and Future Research Journal of Management 2011 37:

“Get the business model wrong,
and there is almost no chance of
success...”
Prof. David Teece
University of California, Berkley.

“Business model innovation matters
and it is a top priority of CEOs.”

Source: IBM Global CEO Study 2006

„Innovation is front and center on the
corporate agenda, according to a
global survey. Executives are adding
more breakthrough innovations and
business model changes to their
portfolio to fuel the growth engine.“
Business Week, November 16, 2009

Source: Businessweek / BCG Innovation Survey 2008

Stagnating or
declining
revenues

Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82

Source: Moore, GA 2004, Darwin and the Demon: Innovating Within Established Enterprises. Harvard Business Review, 82

̲ Increase profit
̲ Find new growth areas
̲ Create new markets
̲ Commercializing a new
̲ Increased competition
product or technology
Why ̲ Adapt to changing
environments
̲ Adapt to new / emerging
markets
̲ Seize emerging trends

$ 1.600.000,-

© Marc Sniukas - Doujak Corporate Development

Free
Download

„There‘s no good
just being better,
...you got to be
different.“
Charles Handy

̲ “A business model is simply the ‘way of doing business’ that a
firm has chosen: its entire system for creating and providing
consistent value to customers and earning a profit from that
activity, as well as benefit for its broader stakeholders. It refers
to the core architecture or configuration of the firm, specifically
how it deploys all relevant resources (not just those within the
company boundaries), to create differentiated value for
customers at a profit…”
(Davenport, T. H., M. Leibold and S. Voelpel (2006). Strategic Management in the Innovation Economy. Publicis Wiley.)

̲ The business model is a company’s answer to the question of
how to make money in its chosen business. It describes, “…as a
system, how the pieces of a business fit together.”
(Magretta, J. (2002). "Why Business Models Matter." Harvard Business Review 80(5) May: 86-92.)

Source: Accenture

Source: The Boston Consulting Group

Source: Innosight

Source: businessmodelgeneration.com
Source: IDEO

WHO

is your customer?

HOW WHAT

do you do this? do you offer
your customers?

WHO

Markets

Customer Segments

Individual Needs

HOW WHAT

Create Value Products & Services

Deliver Value Solutions

Capture Value Experiences

Traditional Approach Business Model Innovation
Who • Everybody • Everybody

What • Usually full treatment • Focus on basic treatments
• Services covered by health • Quick
insurance • Convenient
• Special treatment for additional cost • Affordable

How • A range of specialists • Generalists
• Special facilities • Located in shopping malls / inside
• One central location CVS pharmacies
• “Solution shops” • Multiple locations
• “Retail model”

Who • (Rich and middle class) people who • “Low income clients”
are reliable to pay back the credits or • Poor people who would not get any
have enough assets as security. loans from traditional banks
(especially women)
What • Classic loans, usually for larger sums • Small loans to “unbanked people”
to buy assets.

How • Strong risk management • About 97% make their payments.
• The returns from the interests belong • The borrowers are the owners of
to the bank/ shareholders the bank.
• Profit focus • The profit of the bank goes back to
the owners.
• There is no collateral. No lawyers.
• Social business focus

Who • People who want a quick bite to eat • People who want to sit down and
• Get in, order, get served quickly, get remain seated for a while
out quickly again • Create a “3rd place” à la Starbucks

What • Pre-made food prepared constantly • Coffee and cake
according to demand • Made to order (coffee)
• Standard menus • Pre-produced (cakes)
• Some variations allowed • No menus
How • 1 counter • 2 counters
• Standardized processes • Separate seating area
• Central locations with high • Key is to increase share of wallet of
frequencies the customer and keep him for a
• The key is to serve a maximum longer period of time in the
number of people during a given restaurant
time • Innovative use of existing assets,
new capabilities needed

Who • Kids • Everybody from 4-99
• Hard Core Gamers • The whole family
• Casual Gamers

What • High Tech – High Performance • Family Console
Console • Low tech, lower power processors,
• High tech, high end processors for no additional features
speed and graphics, connect over the • Focus on fun rather than technical
internet, additional features (DVD, performance
internet,...) • New movement technology
 high cost  lower cost
 high sales price (250-300.- €)  lower sales price (190.- €)

How • n/a • n/a

New Markets
New Customers

What

New Ways of New Value
Doing Business Propositions

Division Division Division Division
1 2 3 4

© Marc Sniukas - Doujak Corporate

May 6-7

April 15 Group Mgmt
March 10 Meeting BU
Workshop Mgmt
Division Mgmt
Meetings • Presentation of
Business Division
• Introduction to Models Mgmt
Business Model • Preparation of
Innovation GMM Group
• Introduction
Research on Final version 2010
Future Space
innovative Business until April 29 to
• Process
Models and Trends. SIO
• Preparation Group
• Handbook 2011 +

Business Draft until March 29 to SIO
Model Description Coaching Sessions with SIO
by Division Mgmt Final Version until April 7 to SIO
and their teams.

March 10
BU
Mgmt
Division Mgmt
Meetings
Division
• Introduction to Mgmt
Business Model
Innovation Group
• Introduction
2010
Future Space
• Process
• Handbook 2011 +

March 10
BU
Mgmt
Division Mgmt
Meetings
Division
• Introduction to Mgmt
Business Model
Innovation Group
• Introduction
2010
Future Space
• Process
• Handbook 2011 +

and their teams.

April 15
March 10
BU
Workshop Mgmt
Division Mgmt
Business Division
• Introduction
2010
Future Space
• Process
• Handbook 2011 +

and their teams.

April 15
March 10
BU
Workshop Mgmt
Division Mgmt
Business Division
• Introduction
Research on Final version 2010
Future Space
innovative Business until April 29 to
• Process
Models and Trends. SIO
• Handbook 2011 +

and their teams.

1. Description

2. Inspiration

3. Creation

Source: businessmodelgeneration.com


WHO
#1 Challenge industry assumptions #11 Target non-customers
#12 Target less profitable customers
WHAT #13 Target the least satisfied customers
#2 Offer complementary products and services #14 Target the chain of buyers
#3 Offer solutions and experiences #15 Segment according to commonalities
#4 Offer bundles #16 Segment according to circumstances
#5 Switch your appeal: functional versus #17 Desegment the customer based
emotional HOW
#6 Focus on the job to be done
#18 Reinvent the customer interface (channels)
#7 Selectively eliminate, reduce, raise and create
#19 Reinvent your customer relationships
#8 Look at subsitutes
#20 Invent new revenue streams
#9 Expand the use of your assets and capabilities
#21 Price differently
#10 Look at the customer experience
#22 Reinvent you cost base
#23 Re-assess your key activities
#24 Collaborate with suppliers, partners, the
network and ecosystem
#25 Look at completely different industries

Setting the Stage

A Discovery-Driven
Approach

Setting the stage Discovery Development Conversion Commercialization
Description Project set up. Define and Discovery of Development of business Conversion of concepts Implementation and
describe project. Formal opportunities model concepts into real-life launch
GO. Gain insights Develop business model Testing concepts and Launch new business
idea portfolio and receiving market model
evaluate ideas feedback

Input BMI Idea Project Brief Insights from discovery Business concepts Finished and tested
phase approved for test Business Model
First ideas

Tasks 1. Define and build team 1. Company Assessment 1. Develop BM portfolio 1. Strategy & Business 1. Implementation
2. Define purpose, scope 2. Market Assessment 2. Evaluate BM portfolio Planning 2. Start-Up / Incubation
and focus 3. Industry Assessment 2. Customer tests 3. Acceleration
3. Define goals and 4. Future Trends 3. Technical feasibility 4. Transition
metrics 4. Implementation
4. Define process and Strategy
project plan 5. Organisational gap
analysis

Output • Project Brief • Description AS IS • BM idea / option • Final Business Model
• Project plan • Description of portfolio Evaluation
• Team is established opportunities • Evaluation of ideas • Strategy is developed
• Common • Description of first • List of assumptions to • Organisational
understanding about ideas be tested structure is defined
the project has been • Update project • Business case for each • Partners/Network are
created planning business model defined
• Tested Business Model
is profitable

Gates • Team established • Idea Screening • Go to testing • Launch decision Launch review (12
• Resources have been • Stop/Go Decision • Stop/Go Decision • Budget approval months)
committed • Is the idea still • Justified to start • Business model is Business model review
interesting? conversion/testing/ex profitable Business model
• Is it worth spending perimentation phase? optimization
the resources for the • Budget decision Integration into holding
next phase?
© Marc Sniukas - Doujak
Corporate Development

Steering
Committee
Strategic
Innovation Office

Cross Division Strategic Innovation Within Division
Cross Division
Project Teams Core Team Within Division
Project Teams
Cross Division
Project Teams Within Division
Project Teams
Cross Division
Project Teams
Cross Division
Project Teams
Project Teams Project Teams

Nov Dez Q1 Q2 Q3 Q4 2012
2010 2011

Core Team
Core Team Core Team Core Team Core Team Core Team
Core Team Meeting
Meeting Meeting Meeting Meeting Meeting
Kick Off

Board Division 1 Division 3 Division 1 Division 3
Update Division 2 Division 4 Division 2 Division 4

Setting the
Project 1 stage
Discovery Development Conversion

Setting the Commer-
Project 2 Team Kick Off
stage
cialization

Hire Project Project Setting the
Project 3 Manager Manager stage



Process Overview

Preparation 1 Workshop I

Preparation 2 Workshop II

Home Work

Workshop III

Workshop IV Strategic Experiments

© Doujak Corporate Development

Goal

Activate
Setting the Stage participants

Tools

Phone Call
Information Package
Chapters 1-4

• Participants are well prepared.
• They have a good theoretical background.
• The know the process and its objectives.


Goal

Where are we now? Define target.
Describe AS IS.
Where are we heading towards?

Approach aspiration

current path

• Target is defined. (Strategic Intent)
• Need for action is clear / common understanding.
• Current business, including markets, value proposition and
business model is described.

Goal

Where are we now? Define target.
Describe AS IS.
Where are we heading towards?

Tools

Value Curve
Business Model

“Strategic Experiments”
Portfolio Strategic Intent Customer Profile
Path of Life

• Target is defined. (Strategic Intent)
• Need for action is clear / common understanding.
• Current business, including markets, value proposition and
business model is described.

Goal

Activate (new)
Inspiration. participants.
Be inspired.

Tools

Phone call Examples of Innovators
Toolbox
Information Package

• Keeping the energy high.
• First ideas are developed (even before workshop)


Goal
Discovering and
Sensing Opportunities.
describing
opportunities.

Tools

New business models
New value propositions

New customers
Toolbox

• Opportunities have been identified.
• First ideas on how to seize them have been developed.


Goal
Organize inputs. Get
If necessary
feedback. Further
develop first ideas.

Tools

…everything necessary…
Customer talks

Data analysis
Desk Research

• Information for workshop III is organized.
• Ideas have further been described.


Goal

Seizing Opportunities
Developing options.

Tools
WHO
Customers

HOW WHAT

Business Models
Value Propositions

• Strategic options have been developed.
• Ideas for new customer segments, value propositions and business models
have been described.


Goal

Evaluating options.
Decision making Making decisions.

Tools

Area Rating Description What we What we
assume...
know...
Strategy How well does the idea
fit with our current 0 5 10
strategy?
 expanding or defending a
What is the strategic current business
purpose of the idea?  building a new one that has
already been identified
 laying the foundations for
potential new businesses

Organization Resources &
Competencies

Which do we need?

Which do exist
already?

Which need to be
build?

Change need

Change readiness

Finance Revenue potential

Financial (Qty x Price)
Implications
Cost (fix + variable)

Unit Margin Target

“Strategic Experiments” Strategic Innovation
Strategic Innovation
Portfolio Scorecard
Profile

• Strategic options have been evaluated.
• Strategic experiments have been defined and can be implemented.
• High engagement of senior management leads to high motivation for the
implementation.

Formal

Focused Open

NewCo Inside

Innovation
Evolutionary tensions
Revolutionary

Outside CoreCo

Closed Holistic

Informal

Who is your
customer?

What is your value
proposition?

How are you
creating and
delivering your
offer?

existing ↔ noncustomers (2nd and 3rd tier)

most profitable ↔ less profitable

most satisfied ↔ less satisfied (1st tier)

specific buyer ↔ chain of buyers

focus on differences ↔ focus on commonalities

focus on finer segmentation ↔ focus on de-segmentation

focus on attributes
(of customers and products)
↔ focus on circumstances
(needs and the job done)

focus on existing assets ↔ start anew, or use existing assets in a
new way

single product or service ↔ total solution, bundling

functional appeal ↔ emotional appeal and experiences

focus on product ↔ focus on function fulfilled and the
job-to-be-done

build new features ↔ raise, reduced, create, eliminate
selectively

conventional customer interface ↔ (co-creating) experiences
easy to do business with

↔
conventional pricing strategic pricing of the masses
(either to cover cost or benchmarked against (benchmarked against substitutes and alternative
competitors) industries)

cost-plus thinking ↔ price-minus thinking; target costs

integrate activities ↔ network (with customers, suppliers,
partners, alliances)

low fit of activities
(internally and externally)
↔ high fit of activities
(internally and externally)

• Set the context
• Guide the process in a participative and fair way
• Clearly communicate reasons, and expectations
• Questioning attitude • Educate employees
• Rewards success and failure, punishes inaction • Variety (internal and external)
• Shield creative teams from distractions and pressure
• Tolerates mistakes • Collaboration
• Appreciate distinctiveness in people and their thinking
• Slack is welcomed • Educated in regard to the strategy and
• Welcome change
skills needed
• Supports risk taking and change • Ask itself what it does to promote or inhibit innovation
• Supports teamwork and collaboration and how to get rid of these obstacles.
People

Culture Leadership
Are you ready for
Business Model
Innovation?
Systems Structure
• Support the process of strategic • Fast and flat
innovation Processes • Small units
• Enable collaboration • Encourages collaboration
• Enable the use and creation of • Fast and unbureaucratic • Autonomous teams at the
knowledge • Decentralized decision making front line
• Reward risk taking and action • Support idea generation,
• Used to create relationships with experimentation and execution
customers
• Metrics & rewards support
innovation

̲ Dynamic Capabilities (i.e. activities,
processes and routines) leading to Business
Model Innovation.

̲ Managerial capabilities for creating,
developing and leading these capabilities.

“The difficulty lies not
in the new ideas,...

…but in escaping from
the old ones.”
John Maynard Keynes

Get in touch!
Marc Sniukas

Doujak Corporate Development
Lainzer Strasse 80
A-1130 Vienna

Mobile: +43 699 122 333
marc.sniukas@doujak.eu

Reinventing Your Business

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