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Business Model Innovation in Practice
Case Studies
5 Types of Innovation
Product/Service Innovation
Process Innovation
Marketing Innovation
Organisational Innovation
Business Model Innovation
Business Model Innovation
Wells Fargo
American Express
Nokia
Practical Application
The business model canvas can be used when:
Reviewing existing business models e.g. Established business
Creating a new business model e.g. New start-up
Changing a business model within a division
Dell Computers
The personal computer market had become very competitive by the late
1990s
IBM, HP, Toshiba were dominating the market for PCs
For Dell to be competitive they needed to make massive changes
Dell focused on the concept of the value of time
How could the company minimise inventory and bring new products to
market quickly
Dell Computers
Dell’s business model was modified by focusing on the following
components:
Direct customer relationships
Direct sales
Customer segmentation for sales and service
Build-to-order production
Traditional indirect distribution of PCs
Business Model Case Study
Dell’s direct distribution channel
Suppliers PC MakerRetailer Reseller
IntegratorDistributor
Final Customer
Suppliers DellFinal
Customer
Dell Computers
The business model innovation implemented by Dell provided the following
advantages:
Increased market share for personal computers
Ability to deliver a “made-to-order” customised PC quickly to the
customer – 3 to 4 days
Increased client satisfaction
Reduced cost through minimising inventory
Increased profit by utilising a direct sales strategy
Innovative Business Concepts
After 10 years working at the Australian Institute for Commercialisation it
was time to start a business
Focus was a consulting business in innovation and commercialisation
services
Where do I start?
KEY PARTNERS
Other consultants
Investors & Venture Capitalists
Technical specialists (e.g. market research etc)
Channel partners (e.g. government, industry bodies, mastermind groups)
KEY ACTIVITIES
Sales process & pipeline
Direct marketing
Telephone/Meetings
Presentations
Networking
Partnering
VALUE PROPOSITION
Solving complex problems for clients through innovative solutions
Growth through business innovation
Commercialisation services
IP management and path to market advice
Facilitation & education
Coaching & mentoring
CUSTOMER RELATIONSHIPS
Personal relationship (one to one) management
Client maintenance process
Adding value
CUSTOMER SEGMENTS
Start-ups & SMEs
Medium-Large enterprises
Government agencies
CRC’s & ROs
Firms in the following sectors:
o Health/ Biotech o Agriculture o IT o Clean technology o Science &
technology o Mining/ Engineering o Manufacturing
KEY RESOURCES
Intellectual capital, knowledge, skills & experience
Branding & profile
Tools, processes & methodologies
Outsourcing
CHANNELS
Existing networks
Direct marketing
Partnering with other consultants
Tenderlink – gov tender sites
Referrals and word of mouth
COST STRUCTURE
Minimal and lean – “The Lean Start Up” concept
Mainly for marketing & promotion, telephone, travel (MV & parking), tools, printing, network meeting fees, internet, outsourcing
Eventually rent for premises (start with virtual office)
Virtual assistant – admin, telephone sales, diary management
REVENUE STREAMS
Initial Target $250,000
Revenue sources: o Specific consulting projects o Monthly retainers o Delivering presentations and workshops o Medium to long term contract placement o Coaching & mentoring o Board positions o Success fees and equity in business
Identify Key Business OpportunitiesBusiness Opportunities RegisterTimeframe Opportunity Description Source Action Status ValueImmediate UQ Business School BD for the professional certificate in research
commercialisation
Damian Hine 15/05/13 Commercialisation Bootcamps development
& facilitation
09/05/13 Meeting with Damian Hine. Teaching
opportunity available immediately.
Active $21,000
Immediate pd Training Become a trainer for pdTraining Don Fairweather 11/06/12 Received a reply that there were no positions
available and that I needed to have a Cert IV TAE
27/05/13 Sent CV and impactful application letter
Send CV and an impactful cover letter to Don
Closed $6000 per month
Immediate Innovation Australia Board Position Board member position in Canberra Innovation Australia 10/05/13 Submitted online application Completed $2000 per month
Immediate Food Innovation Precinct Board member position in Canberra Innovation Australia 23/05/13 Submitted online application Completed $2000 per month
Immediate Woods Grain consulting Advice on the anti-microbial project Angus Woods Completed numerous projects
19/06/13 Received counter offer
11/06/13 Sent through marked-up changes of Contract
21/05/13 Received Consultancy Contract from Angus
13/05/13 Waiting for contracts
8/5/13 Email terms of engagement
Have a discussion week of 5/5/13
Active $10,400
Immediate Anti-microbial Tea Tree Oil based gel - Stage 1 Commercialise Tea Tree Gel for Bacterial
Vaginosis
Steen from Novasel 16/06/13 Commercialisation Plan delivered
27/05/13 Proposal Accepted and work started
21/05/13 Met and scoped project. Proposal prepared
and sent
Provide consulting rates and plan of engagement
Completed $6,200
Immediate Anti-microbial Tea Tree Oil based gel - Stage 2 Commercialise Tea Tree Gel for Bacterial
Vaginosis
Steen from Novasel Oct 13 Trip to India to visit Cadilla
Stages 2 and 3 completed
19/06/2013 Steen requested quotation for Stages 2, 3
and 4
Completed $9,000
Immediate Tenderlink Tenderlink Tenders Tenderlink Website Register on Tenderlink Completed
Immediate Athletic Greens Investigate securing rights to Athletic Greens for
Asia Pacific region
Craig Ballantyne, ETR Develop my own Super Green product
Contacted affiliate but not interested in promoting
product in Australia
15/06/13 Nicole gave me the affiliate contact for
Athletic Greens
28/05/13 Second email sent to Craig Ballantyne
15/05/13 Contact Craig Ballantyne via email and ask
the question
Active Licensing opportunity
Immediate AIM Opportunities Consultant/Trainer for AIM AIM CEO Contact Vivienne for a meeting/discussion Pending $2,000 per workshop
Immediate Department of SB Facilitator work Robyn Reeve I have been written into their proposal.
Return telephone call
Completed $3,700 per workshop
Next Steps
90 Day Action Plan Date Due to be
Completed
1. Build client database through networking and affiliate marketing programs Ongoing
2. Develop an Ascending Transaction Model to build clients and drive conversion 31/01/14
3. Productise my business offerings into packaged products 31/01/14
4. Develop and implement a marketing campaign every quarter 30/10/13
5. Measure and evaluate the effectiveness of the first campaign 30/11/13
6. Convert prospects into delighted customers through attribution of value 30/11/13
7. Identify and implement an integrated administration system, including finance 30/12/14
8. Investigate different online business systems 28/02/14
9. Identify outsourcing services for the different admin and financial functions 31/01/14
10. Design and implement a website with blog and social media 31/01/14
11. Choose and register URL and web hosting service 31/01/14
12. Write website and blog content and upload 31/01/14
15. Review the value proposition and the Why? for the business 31/01/14
16. Develop a clear and differentiated elevator pitch 31/01/14
14. Improve the Innovative Business Concepts story 30/01/14
13. Review Innovative Business Concepts branding 31/03/14
Conclusion
Every business has a business model
We often don’t give business models much thought
Business models are the key method for articulating value creation (and
profit!)
Business model innovation is an option for everyone
Business Model References
Drucker, P. F. (1994). The theory of the business. Harvard business review,
72(5), 95-104.
Magretta, J. (2002) Why Business Models Matter HBR http://bit.ly/1C3Yfob
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a
handbook for visionaries, game changers, and challengers. John Wiley &
Sons.
References
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a
handbook for visionaries, game changers, and challengers. John Wiley &
Sons.