17. Operating Margin Growth in Excess of
Competitive Peers
compound annual growth rate over five years
[Source: IBM, CEOs are expanding the innovation horizon: important implications for CIOs]
18. Benefits Cited by Business Model
Innovators
percent of respondents
[Source: IBM, Global CEO Study 2006]
27. Development plan
• Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit
amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis
molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In
facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci.
• Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer
adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec
ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit
eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis,
pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec,
tincidunt sit amet, facilisis imperdiet, lorem.
• Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat
fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac
libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut
lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id,
commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque
dignissim sodales. Aenean non justo nec magna lobortis volutpat.
Strategy
Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper,
risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felis
pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec
diam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod.
Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor.
Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibus
vulputate. Proin dignissim eros at augue.
Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulum
condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt
et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae
purus. Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt
blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque.
Words
Text
Text
Text
18%
300%
12%
1%
through inappropriate
means
42. what value proposition do you offer,
to which customer segments?
(example)
spectacular
offensive football
fans
CUSTOMEROFFER
advertising space &
high visibility
advertisers
… …
46. spectacular
offensive football
stadium & box office
CUSTOMEROFFER
how do you reach your customers?
(example)
club owned TV
channel
fans
mobile phone TV
advertising space &
high visibility
sales force advertisers
50. how do you earn your money
with this business model?
51. VALUE
PROPOSITION
REVENUE
STREAMS
value proposition 1
value proposition 2
…
revenue stream 1
revenue stream 2
…
OFFER
CUSTOMER
SEGMENTS
target customer 1
target customer 2
…
FINANCE
how do you earn your money
with this business model?
(model)
52. spectacular
offensive football
ticket sales
FINANCEOFFER
TV channel
subscriber fees
fans
mobile phone TV
subscriber fees
advertising space &
high visibility
advertising revenues advertisers
how do you earn your money
with this business model?
(example)
83. selling stuff
on the Web
IT infra
customer
relationships
mass
customer
data services
Amazon.com
data grid
partners
selling stuff
Amazon S3
Amazon.com
Internet API
Web2.0
companies
warehousing
& distribution
distribution
content
management
product
selection
A9 product
search
data storage
fees
product
search
search engine
revenues
e-commerce
sites
Internet
marketing
106. > market boundaries are
not given
> they are reconstructed
by the actions & beliefs
of industry players
107. • compete in existing markets
• beat the competition
• explore existing demand
• make the value/cost trad-off
• align with differentiation OR
low cost
• create uncontested markets
• make competition irrelevant
• create & capture new demand
• break value/cost trad-off
• align with differentiation
AND low cost
RED OCEAN BLUE OCEAN
109. • a customer value proposition gives an overall view of a
company's bundle of products, services and client
advice.
• it is the sum of the total benefits a customer is
promised to receive in return for a payment (or other
value transfer)
working definition value
proposition
110. what are the 5 most
important competitive
attributes that
characterize a game
console’s offer?
(e.g. price, performance, design)
attribute 2
e.g. price
attribute 1
e.g. performance
group warm-up
123. Goldcorp
mining
low costs through
open exploration
CUSTOMER
RELATIONSHIPS
CUSTOMER
SEGMENTS
exploiting
mines
“geology prize”
500’000 $US
REVENUE
STREAMS
DISTRIBUTION
CHANNELS
Goldcorp publicly shared all of its geological data and
offered US$ 500’000 in prizes for determining where they
might find the next 6 million ounces of gold
research
126. Skyp
e
free VoIP & value
added services
software
development
website
global
(non segmented)
deliver voice &
video quality
“eBay”
large scale
low margin
internet
software
development
free voice-over-IP VoIP telephony &
value-added services
127. 1291 Cityhomes
low cost
accommodation
New York
low cost
CUSTOMER
RELATIONSHIPS
the cost
sensible
renting out
rooms
keep down
costs
apartment
owners
rents
DISTRIBUTION
CHANNELS
find demand
young
curious
Swiss
low-cost hotel/rental in New York City
128. Tecnovate
low-cost multi-
lingual call
center
outsourcing
low cost
CUSTOMER
RELATIONSHIPS
European
corporations
ACTIVITY
CONFIGURATION
keep down
costs
“import” young
curious
Europeans to
India to work
REVENUE
STREAMS
DISTRIBUTION
CHANNELS
business process outsourcing “up-side down” in India
134. all photos from Flickr
under a creative commons license
authors indicated in comment page of ppt
135. we co-create
Nobody knows your business environment better than
yourself. We co-design your strategic vision by building
on your knowledge. Through group thinking we find the
right answers to the right questions together
we operationalize
Having a great vision is not sufficient - implementation
counts. We help you reconcile long term views with short
term actions. We make strategy everyone's job by
translating it into pragmatic and prioritized projects.
we manage change
Change does not happen accidentally it has to be
managed. We help you align strategy, people and
processes with respect to your organizational culture and
values.
we build knowledge
When you stop learning, you stop competing. We scan the
knowledge universe for you, across disciplines and
industries. We transfer the best methods, tools and
theory in business to your organization.
we connect
Specific problems require specific skills that you do not
necessarily dispose of in-house. Through our
interdisciplinary network we connect you with leading
domain experts.
139. VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
VALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
gives an overall view of
a company's bundle of
products and services
portrays the network of
cooperative
agreements with other
companies
describes the channels
to communicate and
get in touch with
customers
describes the
arrangement of
activities and resources
explains the
relationships a
company establishes
with its customers
sums up the monetary
consequences to run a
business model
describes the revenue
streams through which
money is earned
describes the
customers a company
wants to offer value to
outlines the capabilities
required to run a
company's business
model
INFRASTRUCTURE CUSTOMER
OFFER
FINANCE
describing a company’s business model
146. describing what activities are required
VALUE
PROPOSITION
VALUE
CONFIGURATION
CORE
CAPABILITIES
value proposition 1
value proposition 2
…
core capability 1
core capability 2
…
activity 1
activity 2
…
INFRASTRUCTURE OFFER
147. describing the partners that leverage the business model
VALUE
PROPOSITION
PARTNER
NETWORK
CORE
CAPABILITIES
value proposition 1
value proposition 2
…
core capability 1
core capability 2
…
partner 1
partner 2
…
INFRASTRUCTURE OFFER
148. VALUE
PROPOSITION
COST
STRUCTURE
cost account 1
cost account 2
…
value proposition 1
value proposition 2
…
FINANCEINFRASTRUCTURE OFFER
describing the costs of a business model
CORE
CAPABILITIES
core capability 1
core capability 2
…
http://www.flickr.com/photos/dnevill/141809815/ CC Attribution-NoDerivs License Dan Nevill
people will go into buzz groups to get to know each other and to discuss issues, fears, hopes and opportunities they face in strategic management today
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The ATLAS detector under construction, Nov 2006 http://www.flickr.com/photos/giustino/307903073/ CC Attribution License Justin Clements
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http://www.flickr.com/photos/archibaldjude/31352718/in/photostream/ CC Attribution-NoDerivs License archibald jude
In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
LIFT presentation on Literacy, Communication & Design http://www.janchipchase.com/blog/archives/2007/02/00.html
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http://www.flickr.com/photos/pathfinderlinden/214523588/ Pathfinder Linden CC Attribution License
In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
http://www.denismartin.ch/Plats/Plat-2.htm Restaurant Denis Martin Le shampoing d'eau de mer aux st.Jacques et Wasabi
http://www.flickr.com/photos/buggolo/422247513/ CC Attribution License Stefano Brivio
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http://www.flickr.com/photos/69875617@N00/3425464/ CC Attribution-ShareAlike License John Seb Barber Amazon S3 Here are the facts: This is a web service, and so Amazon is not releasing a customer facing service. They are offering standards-based REST and SOAP web services interfaces for developers. Entire classes of companies can be built on S3 that would not have been possible before due to infrastructure costs for the developer. Virtually any file type is allowed, up to 5 GB. Files may be set as public, shared or private and will have a unique URL. Pricing is cheaper than anything else I’ve seen: $0.15 per GB of storage per month, and $0.20 for each GB of data transferred up or downstream. This translates to $15 per month for 100 GB of storage, net of any transfer fees (to move that much data on to S3 would be a one time cost of $20). These prices are going to be significantly below the development and ongoing costs for small or medium sized storage projects - meaning a lot of the front end services I’ve previously profiled will be much better off moving their entire back end to S3.
Amazon S3 Here are the facts: This is a web service, and so Amazon is not releasing a customer facing service. They are offering standards-based REST and SOAP web services interfaces for developers. Entire classes of companies can be built on S3 that would not have been possible before due to infrastructure costs for the developer. Virtually any file type is allowed, up to 5 GB. Files may be set as public, shared or private and will have a unique URL. Pricing is cheaper than anything else I’ve seen: $0.15 per GB of storage per month, and $0.20 for each GB of data transferred up or downstream. This translates to $15 per month for 100 GB of storage, net of any transfer fees (to move that much data on to S3 would be a one time cost of $20). These prices are going to be significantly below the development and ongoing costs for small or medium sized storage projects - meaning a lot of the front end services I’ve previously profiled will be much better off moving their entire back end to S3.
http://www.flickr.com/photos/framesniper/153464496/ CC Attribution-NoDerivs License Jeff Ryan
http://www.flickr.com/photos/yuvalh/386987419 CC Attribution License Yuval Haimovits
value innovation is at the centre of the concept of “Blue Ocean Strategy” which combine cost and differentiation W. Chan Kim is The BCG Chair Professor of Strategy and International Management at INSEAD. He was a professor at the University of Michigan Business School. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union and a Fellow of the World Economic Forum...... Full Bio Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management at INSEAD, France. Mauborgne is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review .......
W. Chan Kim is The BCG Chair Professor of Strategy and International Management at INSEAD. He was a professor at the University of Michigan Business School. He has served as a board member as well as an advisor for a number of multinational corporations in Europe, the U.S. and Pacific Asia. He is an advisory member for the European Union and a Fellow of the World Economic Forum...... Full Bio Renée Mauborgne is The INSEAD Distinguished Fellow and a Professor of Strategy and Management at INSEAD, France. Mauborgne is a fellow of the World Economic Forum. Her Harvard Business Review articles, co-authored with W. Chan Kim, are worldwide bestsellers and have sold over half a million reprints. Their Value Innovation and Fair Process articles were selected as among the best classic articles ever published in Harvard Business Review .......
http://www.flickr.com/photos/shutr/505866600/ CC Attribution License Lucy
In order to be able to innovate you must deeply understand your (potential) customers. This means understanding not only them, but also their lives, context and environment. There is a new trend in companies to hire ethnographers and anthropologists.
Toronto, Ontario's Goldcorp Inc. launched the Internet gold rush… http://www.innovation.gc.ca/gol/innovation/stories.nsf/veng/ss01056e.htm http://www.businessweek.com/innovate/content/feb2007/id20070201_774736_page_2.htm http://www.fastcompany.com/magazine/59/mcewen.html By the mid-1990s, Rob McEwen, Chairman and CEO of Toronto's Goldcorp Inc., was convinced that there was more gold to be found in his company's Red Lake Mine, despite expert opinions to the contrary. Located near Balmertown, Ontario, the mine had been in production since 1948, but was a small, costly and capital-starved operation with a very uncertain future. For Red Lake Mine to survive, big changes were required. Therefore in February 1995, Goldcorp launched a US$7-million exploration program, the most aggressive in its history. Forty-five days later, Goldcorp's geologists made a significant gold discovery at the bottom of the Red Lake Mine and shattered the accepted geological model for the area. Over the next three years, Goldcorp's exploration efforts continued to meet with success. The discovery revealed a deposit that was large enough to be economically mined, despite the fact that the price of gold had fallen to a 20-year low.For McEwen, the big questions were: "How big is this deposit?" and "How long will it take to find out?" To answer these questions, Goldcorp's geologists held a two-day brainstorming session. The open sharing of ideas focussed the exploration efforts. Greatly encouraged by the positive results, McEwen wanted to engage a larger community of experts in a much greater brainstorming session: the "Goldcorp Challenge."For this competition, Goldcorp publicly shared all of its geological data from the past 52 years and offered US$500 000 in prizes for determining where they might find the next 6 million ounces of gold at the Red Lake Mine, regardless of whether gold was found. "I wanted to tap into the intellectual capital of the mining industry and focus it with laser-like precision on our Red Lake Mine," says McEwen. "In this way, I could speed up exploration and improve the odds of discovery."Entry forms were made available via the Internet, with on-line virtual prospecting seen as the fastest and most cost-effective way to run the competition. A CD-ROM package was sent to applicants to allow them access to a valuable proprietary on-line geological database, as well as software to analyse and depict the data graphically in two and three dimensions.Goldcorp's open source code approach to exploration was unprecedented in the worldwide mining industry, where confidentiality and secrecy about reserves and exploration data are the norm. Goldcorp's transparency exposed it to possible industry criticism or rejection of its geological methodology and calculations, and could also have prompted a takeover bid. McEwen, however, believed that the benefits of sharing data — the rapid acquisition of knowledge — would outweigh the risks. The Goldcorp Challenge proved to be a resounding success, attracting 475 000 hits to the Web site and 1400 entries from individuals, corporations, domestic and foreign government geological agencies and universities from 50 countries. The exploration proposals that Goldcorp received identified 110 drilling targets, 50 percent of which were new prospects. The winning entry was a collaboration by two rival groups from Australia: Fractal Graphics, in West Perth, and Taylor Wall and Associates, in Queensland, who had developed a powerful three-dimensional graphic depiction of the mine. Mark O'Dea (Canada) took second place, while George Langstaff (U.S.) and Alexander Yakubchuk (Russia) tied for third.So far, Goldcorp has struck gold on four of the top five targets generated by this process. Today, Goldcorp's Red Lake Mine is considered the richest gold mine in the world with a reserve grade (concentration of gold) of 2.1 ounces per ton of rock. It produces gold at a cost of $60 per ounce, which makes it one of the five lowest-cost gold producers in the world. McEwen notes, "The winners were able to analyse a large, complex database in a short period of time and generate targets without ever visiting the property. It's clear that this process is part of the future."In September 2000, Business Week magazine named Goldcorp one of the 50 most innovative companies on the Web. In February 2002, Fast Company magazine named Goldcorp one of its "Fast 50: Champions of Innovation" based on a worldwide survey of its readers. In March 2002, BHP Billiton of London, England, the world's largest mining company, announced at the Prospectors and Developers Association of Canada conference that it had employed the "Goldcorp principle" to accelerate its own exploration effort.
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http://www.ahouseforallseasons.com/ Rocksure Property has launched an aspirational new investment and lifestyle vehicle, The Rocksure Property Alpha Fund, which provides investors with the opportunity to own a share in six exclusive properties located in some of the most glamorous locations in the world. The “House for All Seasons”, portfolio will consist of six exclusive properties, worth an average of £800,000 each. The innovation behind this portfolio is that through a commitment of £159,000, up to 36 investors gain access to the properties for an average of four rent-free weeks every year over the fund’s seven year lifecycle as well as benefiting, as owners, from gains accrued through the properties’ appreciation , which will be returned to investors at the end of the fund’s life. The six locations that have been identified are: Buzios in Brazil; Phuket in Thailand; Marrakech in Morocco; The Algarve coast in Portugal; Breckenridge, Colorado and New York City. This range of locations ensures that all tastes are catered for and provides investors with a variety of holiday options, from the year-round sunshine of Thailand and Morocco to the world-class skiing and snowboarding terrain of Colorado, which they can enjoy themselves, make available to friends and family or rent out to provide an income. Each of the properties is to be bought outright by the fund and, with no gearing to affect costs, all but a fraction of subscription funds will go directly into purchasing the properties and their furnishings. Running costs of the properties, including cook/housekeepers, maids, gardeners and pool cleaners, are covered from two sources, an annual management and maintenance contribution paid to the fund by each unit holder (£1,500 in 2007/8) and the net proceeds of renting a proportion of the available weeks. Around £2.5 million has already been raised by the fund, which is expected to have its first closing during January. The fund will have a life of seven years (plus six months for the acquisition and six months for the disposal of the properties) after which the capital and appreciation will be returned to shareholders. Strutt & Parker Real Estate Financial Services will be promoting the fund in the UK. David Rogers, of Rocksure, told WealthBriefing : "A House for All Seasons has been designed to give high net worth investors the best of both the investment and luxury travel worlds by combining competitive returns with a unique lifestyle offer. The fully staffed properties handpicked for the fund will answer the needs of the most demanding travellers. We have carefully selected their location in exclusive holiday hotspots, with each investor benefiting from an average of four rent-free weeks each year at their choice of properties."