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Business Model Innovation A marketing role too important for marketing alone, or to leave undone BEYOND PRICE

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“ Marketing is too important to leave to the Marketing Department.” David Packard, Founder and Former CEO Hewlett-Packard Company

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An abyss has emerged… … with adverse consequences for organizational prosperity.

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CEO looked to marketing to address largest business challenges. How I learned marketing

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Every industry and industry segment has its Dollar $tore. If that’s not you, how do you avoid getting stuck competing on price? Today’s business challenge

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All purchase decisions are All customers buy on value Value = Benefits less costs to acquire benefits Attributes are not benefits. All customers buy on value.

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<ul><li>What happened to the traditional TV and so many other products and services? </li></ul>Elements that once delighted become requirements.

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The elements that delight become expectations. Competition advances customer value.

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Record player, 125 years Radio, 100 years MP3’s, ??? CD’s, 25 years Cassette Deck, 40 years Products evolve at a faster and faster rate. © Welter, Adaptive Strategies

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Record player, 38 years TV, 13 years 9 months; Facebook at 100 M and IPod Apps 1 B Ipod, 3 years Internet, 4 years Years to 50 M users What’s happening in your category?

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Are you selling as a commodity? Multiple forces were increasing speed and power of commoditization even before recession.

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Internet disrupted more than industries. It shattered marketing into numerous subspecialties.

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Internet disrupted more than industries. It shattered marketing into numerous subspecialties.

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An abyss has emerged The fracturing and specialization of marketing shifted leaders’ focus to tactics versus core business strategy.

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Rich Teerlink, retired chairman/CEO Harley Davidson “ Change is continuous and accelerating; the old strategies just don’t cut it!” Source: Business Week

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… the brand “loyal” are far less loyal. Despite companies’ best efforts at getting better…

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How can you win and keep winning beyond price? Or be highly profitable selling on price? So what do you do?

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Electrolux transformation Is there a solution to winning beyond price?

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The hottest models aren’t at H&M. The basis of competition is now business models.

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Business Model Components Five core strategy questions

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$24,000,000,000 “ Dell’s market capitalization is about the same as the amount of net cash Apple has on its balance sheet.” Business Week November 10, 2008

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AlAdv Alignment builds hard-to-copy skills and culture. Why proactive business model strategy succeeds.

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“ Can you summarize your company’s strategy in 35 words or less? If so, would your colleagues put it in the same way? It is our experience that very few executives can honestly answer these simple questions in the affirmative.” Collis and Rukstad HBR April 2008 McKinsey Award, 2008

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Every company and business unit has a business model whether it’s articulated or not.

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Business model thinking can bridge the abyss.

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AlAdv Marketing is uniquely positioned to facilitate the leadership team’s business model strategy decisions. Moving forward

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Moving forward Building the bridge with a business model strategy and execution framework

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Business Model Strategy and Tactics Alignment © Cooper and Plantes, 2010 Business model strategy Target market(s) Scope of business Value-brand promise Competencies and advantages Profit drivers Execution strategy TM Segments Sales Plan TM Objectives Product Portfolio Strategy Revenue model Value chain Technology strategy Organizational structure Channel strategy Marketing and Operational Tactics Events Promotion Advertisement Public Relations Interactive/digital Process improvements Supply chain management Value chain partnerships Pricing New product development Supporting processes plans Information Technology, Human Resources, Legal, Finance, Investor Relations

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The greatest risk rests in holding tightly to the present. In summary

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As they appear Remember: Markets will deceive you until it’s too late.

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Remember: Markets will deceive you until it’s too late. As they emerge

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As they will be Remember: Markets will deceive you until it’s too late.

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Regularly assess-decide what your business is all about. The solution to winning on price or beyond price

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Lead business model innovation.

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Kay Plantes kay@plantescompany.com US ( 608)233-8519 <ul><li>www.plantescompany.com </li></ul><ul><li>Links to my publications, including my monthly strategy column which provides a key strategy lesson through a company’s story. </li></ul><ul><li>www.plantescompany.com/blog </li></ul><ul><li>My weekly blog on business model innovation will help you become a stronger strategic leader. </li></ul><ul><li>www.beyondpricebook.com </li></ul><ul><li>Beyond Price: Differentiate Your Company in Ways that Really Matter (Greenleaf Book Group, 2009) offers leadership teams a pragmatic 8-step process to diagnose, redefine and create a winning business model. Beyond Price's unique integration of strategy, change management, leadership and execution will enable your business to thrive, not merely survive in today's economy. </li></ul><ul><li>Available from Amazon.com and all book stores. </li></ul>Further information