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Business model	
  Wai Chamornmarn




                    Entrepreneurship@TBS 2012
Business idea	


                      Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Business Concept	


                     Entrepreneurship@TBS 2012
Business Concept


                        Product
                        Innovation




                                     Customer
Management                           Intimacy

    Low
    Price

                Technology




                                      Entrepreneurship@TBS 2012 	
   6
Opportunity	


                      Entrepreneurship@TBS 2012
Vernon’s Razor (ต่อ)




Quantify and MAXimize                     Quantify and MINimize



                        Go or No-Go?

                                          Entrepreneurship@TBS 2012 	
   8
Uncover Opportunity Nucleus
  – Increase customer satisfaction
  – Create a new experience

  – Uncovering
     •  unmet need
     •  underserved needs




                                     Entrepreneurship@TBS 2012
Two Generic “Value types”
  – Trapped Value
     •    More efficient markets
     •    More efficient value systems
     •    Ease of access
     •    Disrupt current pricing power


  – New-To-The-World Value
     •    Customize offerings
     •    Extend reach and access
     •    Build community
     •    Enable collaboration
     •    Introduce new functionality or experience

                                                      Entrepreneurship@TBS 2012
Revealing Unmet or Underserved Needs
What are the steps in the Customer Decision Process:
l  What is the ideal experience? How does reality differ?
l  What are the key frustration points?
l  What compensating behaviors do we see?

l  How/why is the customer successful?
l  Are their groups with underserved needs?




                                             Entrepreneurship@TBS 2012
Profit pattern
	




                  Entrepreneurship@TBS 2012
The Value Chain




13
         Source: Walters (2002)   Entrepreneurship@TBS 2012
Profit Zones / Profit Pools




Source: Adapted from Walters (2002), Gadiesh and Gilbert (1998) and Slywotzky and Morrison (1997)
                                                                                                14
                                                                 Entrepreneurship@TBS 2012
โมเด็ลกําไร 22 แบบ

                       Customer Solutions Profit                           Product Pyramid Profit           Multicomponent Profit                                Switchboard Profit



                                                                                                                                                     Buyers                  Sellers
 Profit




                   0




                                                           Price
                                                                                                         Base Business




                                                                                         Volume
                                                                                                                                  Other Components
                             Time




                                  Time Profit                                Blockbuster Profit             Profit Multiplier Model                           Entrepreneurial Profit



                                                                                                                         Other Forms
                                        Price
          $/Unit




                                                               $/Project




                                                                              Revenue



                                 Cost


                                                                                                  Cost                                                  Base
                                                                                                                                                      Business

                       Q2   Q4           Q6     Q8   Q10                                                                 Key Asset                                                     Spin-Outs
                                                                                Project Type

                             Post-Launch




15	
                                                                                                                                     Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012 	
     16
       "
Business model	


                     Entrepreneurship@TBS 2012
Which would you prefer?


                           Business           Business
                           Design “A”         Design “B”

    Revenue               $10 billion        $8 billion


    Profit                $50 million      $300 million




                                        Entrepreneurship@TBS 2012
business design
                            Today                   Next

 Customer Selection

 Unique Value Proposition

 Profit Model

 Strategic Control

 Scope


                                    Entrepreneurship@TBS 2012
Business Design Example: Airline Industry
   Within a particular industry, companies may pursue very different Business Designs

                                          United                          Southwest              Southwest Next?
Customer Selection &     •  International & domestic; coach, •  Domestic travelers;
Value Proposition           business and first-class travelers coach only
                         •  Broad network & loyalty program •  Low-cost, no-frills w/ highly
                                                                consistent customer service

Value Capture/           •  Tiered fares based on class,     •  Every-day low prices
Profit Model                flexibility                      •  High asset utilization
                         •  Ancillary revenues
Scope                    •  Global hub-and-spoke route       •  US-only point-to-point route
                            system                              system
Strategic Control        •  Controlled-access airports in key •  Lowest costs
                            geos                              •  High frequency route coverage
                         •  Loyal frequent fliers
Organizational Systems   •  Sophisticated IT                 •  Cultural emphasis on Southwest
                         •  International Sales & Regulatory way
                            capability
Revenue                  •  $16BB                            •  $10BB
Market Cap               •  $4.7BB                           •  $10BB

                                                                                   Entrepreneurship@TBS 2012
Business Model

                         Partner                            Customer
                        Network                           Relationship




           Core           Value              Value        Distribution        Customer
       Capacities   Configuration       Proposition          Channel           Segment




                           Cost          Success      /      Revenue
                       Structure           Failure           Streams




21	
                                                       Entrepreneurship@TBS 2012
Example business models over the years
       	

       •  The open business model                •  The loyalty business models
       •  The subscription business model        •  The Collective business models
       •  The razor and blades business model    •  The
          (bait and hook)                           industrialization of services business
       •  The pyramid scheme business model         model
       •  The                                    •  The
          multi-level marketing business model      servitization of products business model
       •  The network effects business model     •  The low-cost carrier business model
       •  The monopolistic business model        •  The online content business model
       •  The cutting out the middleman model    •  The freemium business model
       •  The auction business model             •  The premium business model
       •  The online auction business model      •  The direct sales model
       •  The bricks and clicks business model   •  The professional open-source model
                                                 •  Various distribution business models

22	
                                                            Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Value proposition designer




                             Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Business model canvas




                        Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
Entrepreneurship@TBS 2012
44
Entrepreneurship@TBS 2012

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Business model

  • 1. Business model Wai Chamornmarn Entrepreneurship@TBS 2012
  • 2. Business idea Entrepreneurship@TBS 2012
  • 5. Business Concept Entrepreneurship@TBS 2012
  • 6. Business Concept Product Innovation Customer Management Intimacy Low Price Technology Entrepreneurship@TBS 2012 6
  • 7. Opportunity Entrepreneurship@TBS 2012
  • 8. Vernon’s Razor (ต่อ) Quantify and MAXimize Quantify and MINimize Go or No-Go? Entrepreneurship@TBS 2012 8
  • 9. Uncover Opportunity Nucleus – Increase customer satisfaction – Create a new experience – Uncovering •  unmet need •  underserved needs Entrepreneurship@TBS 2012
  • 10. Two Generic “Value types” – Trapped Value •  More efficient markets •  More efficient value systems •  Ease of access •  Disrupt current pricing power – New-To-The-World Value •  Customize offerings •  Extend reach and access •  Build community •  Enable collaboration •  Introduce new functionality or experience Entrepreneurship@TBS 2012
  • 11. Revealing Unmet or Underserved Needs What are the steps in the Customer Decision Process: l  What is the ideal experience? How does reality differ? l  What are the key frustration points? l  What compensating behaviors do we see? l  How/why is the customer successful? l  Are their groups with underserved needs? Entrepreneurship@TBS 2012
  • 12. Profit pattern Entrepreneurship@TBS 2012
  • 13. The Value Chain 13 Source: Walters (2002) Entrepreneurship@TBS 2012
  • 14. Profit Zones / Profit Pools Source: Adapted from Walters (2002), Gadiesh and Gilbert (1998) and Slywotzky and Morrison (1997) 14 Entrepreneurship@TBS 2012
  • 15. โมเด็ลกําไร 22 แบบ Customer Solutions Profit Product Pyramid Profit Multicomponent Profit Switchboard Profit Buyers Sellers Profit 0 Price Base Business Volume Other Components Time Time Profit Blockbuster Profit Profit Multiplier Model Entrepreneurial Profit Other Forms Price $/Unit $/Project Revenue Cost Cost Base Business Q2 Q4 Q6 Q8 Q10 Key Asset Spin-Outs Project Type Post-Launch 15 Entrepreneurship@TBS 2012
  • 17. Business model Entrepreneurship@TBS 2012
  • 18. Which would you prefer? Business Business Design “A” Design “B” Revenue $10 billion $8 billion Profit $50 million $300 million Entrepreneurship@TBS 2012
  • 19. business design Today Next Customer Selection Unique Value Proposition Profit Model Strategic Control Scope Entrepreneurship@TBS 2012
  • 20. Business Design Example: Airline Industry Within a particular industry, companies may pursue very different Business Designs United Southwest Southwest Next? Customer Selection & •  International & domestic; coach, •  Domestic travelers; Value Proposition business and first-class travelers coach only •  Broad network & loyalty program •  Low-cost, no-frills w/ highly consistent customer service Value Capture/ •  Tiered fares based on class, •  Every-day low prices Profit Model flexibility •  High asset utilization •  Ancillary revenues Scope •  Global hub-and-spoke route •  US-only point-to-point route system system Strategic Control •  Controlled-access airports in key •  Lowest costs geos •  High frequency route coverage •  Loyal frequent fliers Organizational Systems •  Sophisticated IT •  Cultural emphasis on Southwest •  International Sales & Regulatory way capability Revenue •  $16BB •  $10BB Market Cap •  $4.7BB •  $10BB Entrepreneurship@TBS 2012
  • 21. Business Model Partner Customer Network Relationship Core Value Value Distribution Customer Capacities Configuration Proposition Channel Segment Cost Success / Revenue Structure Failure Streams 21 Entrepreneurship@TBS 2012
  • 22. Example business models over the years •  The open business model •  The loyalty business models •  The subscription business model •  The Collective business models •  The razor and blades business model •  The (bait and hook) industrialization of services business •  The pyramid scheme business model model •  The •  The multi-level marketing business model servitization of products business model •  The network effects business model •  The low-cost carrier business model •  The monopolistic business model •  The online content business model •  The cutting out the middleman model •  The freemium business model •  The auction business model •  The premium business model •  The online auction business model •  The direct sales model •  The bricks and clicks business model •  The professional open-source model •  Various distribution business models 22 Entrepreneurship@TBS 2012
  • 24.
  • 27. Value proposition designer Entrepreneurship@TBS 2012
  • 38. Business model canvas Entrepreneurship@TBS 2012