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Applied Business Development
Matti KaulioDept of Industrial Economics and Management
Royal Institute of Technology 100 44 Stockholm, SwedenPhone: +47 8 790 7607 Fax: +46 8 20 35 41
E-mail: [email protected]
2009/10/15 - M. Kaulio -
Customer Value…
• Coffe beans (from producers) <0,01 /cup
• Roasted, branded & packaged 4 EUR/kg
• One cup of coffe (Machine) 1 EUR/cup
• ”Latte” in Stockholm city 3,5 EUR
• Espresso Piazza San Marco, Venezia 14 EUR
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Red vs Blue Ocean
• Competing in existing markets
• Beat the competition
• Exploit existing demands
• Make the value-cost trade-off
• Align the whole system of a firm’s activities with the strategic choices of differentiation or cost
• Create uncontested market spaces
• Make the competition irrelevant
• Create and capture new demands
• Breake the value-cost trade-off
• Align the whole system of a firm’s activities in pursuit of differentiation and cost
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Blue Ocean Strategy
• Red vs Blue Ocean
• Unit of Analysis:– Company
– Industry
– Strategic Move
• Value Innovation vs Technology Innovation vs Market Pioneering
• Market conditions can be created
• Tools for business development
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The Four-Actions Framework
A new valuecurve
Reduce
Which factors should be reduced well below the industry’s
standards
Create
Which factors should be created that the industry has
never offered?
Raise
Which factors should be rasied well above the industry’s
standards?
Eliminate
Which of the factors that the industry takes for
granted should be eliminated?
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• Make a Four-action-framework analysis of:– Skype (2 groups)
– Spotify (2 groups)
– Iphone (1 group)
– Ipod (1 group)
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Eliminate Raise
Reduce Create
Eliminate Raise
Reduce Create
Eliminate Raise
Reduce Create
Cross Case Analysis
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Revenue Models
• Producer model• Broker model• Consultancy model• Performance-based model• The TelCom model/combination model (fixed cost + opening cost +
variable cost; opening fee + downloaded data)• The TechTrade model: Licenciering + royalty• The ”Gilette” model• The ”Drug Dealer” model• The ”Gore-Tex model”• The ”Adobe” model• The ”Singer” model• Internet Advertisment model• The Construction Industry model
”The Elevator Pitch”
• For (target customer)
• Who are dissatisfied with (the current market alternative)
• our product/service is a (new product category)
• that provides (key problem-solving capability)
• Unlike (the product/service alternative)
• We have assembled (key whole product/service features for your specific application)
Moore, p 149
If Nestlé can ….
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