business model patterns
TRANSCRIPT
Business Model Patterns
[REF•ER•ENCES]
Business Model GenerationBy Alexander Osterwalder & Yves Pigneur, 2010
Li WeiTechnology Commercialization ManagerExploit Technologies Pte Ltd (ETPL)Agency for Science, Technology and Research (A*STAR, Singapore)
Presentation by
“Pattern in architecture is the idea of capturing architectural design ideas as archetypal and reusable descriptions.
---- Christopher AlexanderArchitect and design theorist
Emeritus professor at the University of California, Berkeley
BUSINESS MODEL PATTERNS Business models with similar characteristics,
similar arrangements of business model building blocks, or similar behaviors
Definition
BUSINESS MODEL PATTERNS
Unbundling Business Model
Multi-sided Platforms
FREE as a Business Model
The Long Tail
Open Business Models
UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
3 Types of businesses may co-exist within a
single corporationEach type has different economic, competitive and cultural imperatives
UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
Entity 1
Entity 2
Entity 3
They can be “unbundled” into separate entities in order to avoid conflicts
or undesirable trade-offs
UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
UnbundledTelco
ContentProvider
EquipmentManufacturer e.g. Unbnundling the Mobile Telco
Equipment manufacturers, Ericsson, runs the networks for
Mobile Telco companies
Sweden’s Tat concentrates on creating advanced mobile user interface
France Telecom focuses on building customer relations after outsourcing
their operation and maintenance
THE LONG TAIL
# of Products
# of
Sales
Top 20%Focus on a small number of products, each selling in high volume Long Tail
Focus on a large number of niche products, each selling in low volume. It can be lucrative if one can serve this market efficiently
THE LONG TAIL
# of Products
# of
Sales Key Success factors of the Long Tail business:
Low inventory costs & strong platforms
THE LONG TAILLulu.com helps niche and amateur authors craft, print, and distribute their works through an online marketplace
Lego introduced LEGO Factory in 2005, which allows customers to assemble their own LEGO kits and order them online
MULTI-SIDED PLATFORMS
Multi-sided platforms bring together two or more distinct but interdependent groups of customers
MULTI-SIDED PLATFORMS
Value Creation MechanismsInterdependencySuch Platforms are of value to one group of customers only if the other groups are also present
Facilitating interactionsThe platform creates value by facilitating interactions between the different groups
Growth thru. network effectA multi-sided platform grows in value to the extent that it attracts more users (Network effect)
MULTI-SIDED PLATFORMS
TargetedAdvertising
FreeSearch
ContentMonetizing
Google offers distinct value propositions to three interdependent customer segments
FREE AS A BUSINESS MODEL
(How) can you set it free?At least one customer segment continuously benefits
from the free offer and they are financed by another part of the business model or by another customer segment
FREE AS A BUSINESS MODEL
Three patterns that make a viable business option
Multi-sided Freemium Bait & hookFree offer based on multi-side platforms (advertising-based)
Free basic services with optional
premium service
A free initial offer lures customers into
repeat purchases
FREE
FREE AS A BUSINESS MODEL
A free newspaperbased in UK
An image and video hosting website
“Razor & blades” model’s inventor
Multi-sided Freemium Bait & hook
OPEN BUSINESS MODELS
Create and capture value by systematically collaborating with outside partners
OPEN BUSINESS MODELS
It may happen by exploiting external ideas and bringing them into the firm
Outside-in By providing external parties with ideas or assets lying idle within the firm
ORInside-out
OPEN BUSINESS MODELS
OR
”Connect and Develop” strategy that exploits internal research through outside partnerships
Outside-in
Inside-out
Establish Patent Pool that is open to other researchers and facilitates research into understudied diseases
The five business model patterns help us understand business
dynamics and serve as a source of inspiration for new business models
