The different kinds of business models which exist in the e-marketplace today

1. INNOVATION TO MARKET
SESSION 1
ROADMAPPING INNOVATION

2. DEFINITION OF INNOVATION
Technological innovations are defined as new products and processes
and major technological modifications to products and processes.
An innovation is considered performed if it is introduced to the market
(product innovation) or implemented in the production process
(process innovation).
Innovation includes many research, technological, organizational,
financial and commercial activities.
Innovation is revolutionary, iterative and a serious effort.

3. TECHNOLOGY COMMERCIALIZATION
Science converts money into knowledge;
Technology commercialization converts knowledge into money to bring
value to the society

4. Classification of innovations
SYSTEM New series of
cars, planes,
computers, TV
New generation
(MP3 and
download as
substitution of
CD)
Steam engine,
ICT,
biotechnology,
nanotechnology
COMPONENT Improvement of
components
New components
for existing
systems
Advanced
materials
improving
component
properties
DEGREE OF
NOVELTY
INCREMENTAL
“do better what
we already do”
SYSTEMIC
“new for the
company”
RADICAL
“new for the
world”

6. From the Iridium Case Study: Bright Shiny Object Syndrome

7. TECHNOLOGY DESCRIPTION
Means to communicate the existence of your product to customers
and how to refer to it
“Name it & Frame It”
Clearly explain what your technology does and what problem they
can solve by using it,
Answer “WHAT” and not “HOW”
Exercise 1

8. - The advantage the product brings
- Performance, physical, cost benefits
- Product life cycle benefits
- Technical detail of what the
Innovation does
- Must reflect technology innovation to
distinguish or explain product specs
CUSTOMERS PAY FOR THE VALUE
THEY RECEIVE IN EXCHANGE FOR
PRODUCTS/ SERVICES FEATURES
AND BENEFITS

9. (copyright) Deloitte Digital

16. EXERCISE 2:
Where can you operate?

17. A Startup is a temporary
organization designed to search
for a repeatable and scalable
business model.
Steve Blank
‘
’

18. What is a business model?
• A plan to make money with its product and customer base in a
specific market.
• It explains:
• What product or service a company will sell.
• How it intends to market that product or service.
• What kind of expenses it will face.
• How it expects to turn a profit.

19. Business models are constantly changing
Depending on the kind of products or services on offer…

22. Essential components of a business
model

23. The Lean Canvas
is the perfect one-
page format for
brainstorming
possible business
models.
1 2
3
4
5
6
7
8
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24. Most common types of business
models
1. Subscription Based Business Model:
It can be applied to both-
• traditional brick-and-mortar businesses;
• Example: Monthly or yearly subscriptions of Body care boxes/ service bundles at spas
or stores
• Online businesses;
• Example: Netflix

25. Most common types of business
models
2. Bundling Model:
• two or more products together as a single
unit, often for a lower price than they would
charge selling the products separately.
• Helps to generate greater volume of sales and
perhaps market products or services that are
more difficult to sell. However, profit margins
often shrink since businesses sell the products
for less.
• Examples: Fast-food companies that offer value
meals or deals like Mc Donalds Value Meals

26. Most common types of business
models
3. Freemium model
• Popular with the prevalence of online and
Software-as-a-Service (SaaS)
businesses.
• A software company hosts and provides a
proprietary tool for their users to freely
access, such as an app or tool suite
• It withholds or limits the use of certain key
features that, over time, their users will
likely want to use more regularly. To gain
access to those key features, users must
pay for a subscription.
• Example: Spotify, Youtube gives users free
and open access while in ads between the
Content. At some point, many users opt to
pay a recurring monthly fee for the premium
service so they can stream music without
interruption. Other similar examples are
Linkedin, Mail Chimp

27. Most common types of business
models
4. Razor blades model
• Razor and blade model is used by
companies that deal in complementary
or companion products like razors and
blades.
• It involves selling the high-margin root
product at a low price to increase the
volume sales of the complementary or
related low-margin product.
• By using this model, businesses create a
stream of recurring income over the life
of the root product.
• Examples: Companies dealing in razors,
mosquito vaporizers, and other refillable products
employ this business model.

28. Reverse Razor And Blades
• A business employing a reverse razor
and blades model offers the low
margin item at a very less price or
below the cost to encourage the sale
of the high margin product.
• Example: Amazon employs this
business model to sell its Kindle e-
reader. It provides Kindle ebooks at a
price lower than their actual cost so to
make people consider Kindle as a
one-time investment to enjoy low-cost
books throughout its life.
Most common types of business
models

29. Most common types of business
models
5. Product to service
model
• Companies that follow this type
of business model allow
customers to purchase a result
rather than the equipment that
delivers that result.
• Examples: Companies that use
the product to service model
include Zipcar, Uber, Lyft and
LIME.

30. Most common types of business
models
6. Leasing model
• Under a leasing business model, a company
buys a product from a seller. That company
then allows their customer to use the product
they purchased for a periodic fee.
• Examples: Uber or Ola giving their owned car
to the driver on daily rental to drive and earn
through rides made.
• Leasing agreements work best with big-ticket
items like manufacturing, medical equipment
or heavy construction machineries.

31. Most common types of business
models
7. Crowdsourcing model
• Crowdsourcing involves receiving
opinions, information, or work from
many different people using the internet
or social media.
• These types of business models allow
companies to tap into a vast network of
talent without having to hire in-house
employees.
• Examples: Wikipedia, YouTube, IMDB and
Indiegogo are all examples of businesses
using the crowdsourcing model.
• Some traffic apps, for example, encourage
drivers to report accidents in real-time for
the benefit of other app users.

32. Most common types of business
models
8. One-for-one model
• Built upon the idea that,
when one of your products is
purchased, another is given
away to someone in need,
the model is most famously
attributed to Blake Mycoskie
of the US-based company
TOMS pioneered this form of
social entrepreneurship.

33. Most common types of business
models
9. Franchise model
• A franchise is an established
business blueprint that is simply
purchased and reproduced by the
buyer, the franchisee.
• The franchiser, or original owner,
works with the franchisee to help
them with financing, marketing, and
other business operations to
ensure the business functions as it
should.
• In return, the franchisee pays the
franchiser a percentage of the
profits.
• Examples: Starbucks,
Domino's, Subway, McDonald’s
etc.are all common examples
of the franchise model.

34. Most common types of business
models
10. Distribution model
• A company operating as a
distributor is responsible for taking
manufactured goods to the
market. To make a profit,
distributors buy the product in
bulk and sell it to retailers at a
higher price
• Example: Hershey’s, for example,
manufactures and packages its
chocolate, but distributors are the
agents that transfer and sell the
goods from the factory to a retailer..

35. Most common types of business
models
11. Manufacturer model
• The manufacturer model refers to when a manufacturer converts raw
materials into a product.
• Example: Companies like Dell Computers or Hewlett-Packard, both of which
assemble computers with parts manufactured by other companies, would still be
considered manufacturers. Additional examples of this type of business model
include Intel, Magic Bullet, Black + Decker and LG Electronics.

36. Most common types of business
models
12. Retailer model
• A retailer is the last link in the supply
chain. These businesses purchase
goods from distributors and then sell
them to customers for a price that
will both cover expenses and turn a
profit.
• Retailers may specialize in a
particular niche, such as
kitchenware, or carry a range of
products.
• Examples: This is a popular type of
business model — used by big-name
companies like Big Bazaar, Ikea etc.

37. How to choose the right business
model
• Ask yourself:
• How will my product or service benefit the customer?
• How will I generate revenue?
• Who’s my target customer?
• What startup costs am I looking at?
• Which expenses will be fixed and variable costs?
• Do I need support from investors?
• With the answers to these questions, you'll be able to gain a better
understanding of how to structure your business model.
• Lookout for other businesses that are similar to yours (especially
competitors) and see how they've structured their operations.

38. Initial Pitch – June 11th
• Slide 1: WHERE DID YOU START?
• Technology description
• Suggested market by innovator?
• Initial value proposition by innovator?
• Slide 2: HOW DID YOU TEST THE VALUE PROPOSITION?
• Who did you call?
• What secondary research did you conduct?
• What did you learn from your innovator in response to the above?
• Slide 3: WHAT DID YOU LEARN?
• Was the original suggested market and value proposition accurate to market needs?
• What is the most RELEVANT market problem identified to date?
• What are the BENEFITS/VALUE your technology offers this market need?
• How should you pivot the to meet the market need?
• Argumentation/Rhetoric
• Technology design
• Use or application in the market
• Who to sell to or partner with due to improved economic incentive
• Slide 4: WHAT ARE YOUR NEXT STEPS?
• What are your outstanding questions needing an answer?
• What are you going to tell your innovator and other team mates?
• How should you validate your pivot?
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39. Initial Pitch Outline
• Slide 1: WHERE DID YOU START?
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• Slide 2: HOW DID YOU TEST THE VALUE PROPOSITION?
•
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• Slide 3: WHAT DID YOU LEARN?
•
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• Slide 4: WHAT ARE YOUR NEXT STEPS?
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