4. Defining the Business Model
Key partners Key processes Value Customer Customer
proposition relationships segments
Who are your key What are your key What is your value What relationships are Which customer
partners – consider processes – consider proposition? Why will you building with your segments are you going
strategic alliances, co- product customers buy from customers – acquisition, to deal with – mass
opetitors, joint ventures development, revenue you? retention and cross- market, niche
and key suppliers. generation, order selling or upselling? market, segmented?
fulfillment and after-
sales support.
Key resources Channels
What are your key What are your channels
resources – consider to market? Direct or
physical, financial, intell indirect – stores and
ectual, human and offices or web based?
information based
resources.
Cost structure Revenue streams
What are the major drivers for your cost structure? What scope for What are the revenue streams – sale of assets, usage
economies of scope and scale? Can fixed costs be converted to fees, subscription fees, leasing or rental
variable? fees, licensing, brokerage, advertising?
Osterwalder, A. and Pugneur, Y. (2010) Business Model Generation, John Wiley & Sons.
5. PESTLE – what are the key drivers?
Political
Economic
Social
Technological
Legal
Environmental
6. So where and how do we start?
New venture
Family business – diversification New project
Social need New Division
Personal experience Spin off
Research output Acquisition
Idea Validate Implement
New venture
Research groups Due diligence Licence
Individual academics Market research Joint venture with
Industry research Business plans industry
Adapted from Shane and Venketaraman, 2000
9. Examples of environmental influences
Economic Capital Labour
factors and Markets Market
restructuring Competition
Economic Financial Labour policy &
Forecasting policy industrial relations Marketing
Policy
Demographic
Demographics Lobbying
forecasting ENTERPRISE Government
Purchasing Policy
Environmental sensing R&D policy
Supplies
Socio-
cultural
Technology Ecology
Source: Johnson &
Scholes,
10. The SWOT framework
Strengths and Weaknesses Opportunities and Threats
VRIO worksheet in handout
Resources and capabilities Macro environment
Value chain activities Value systems
Organizational design PESTEL framework
VRIO framework P5F framework
Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the
resource/capability?”
Rarity: "Is control of the resource/capability in the hands of a relative few?”
Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to
obtain, develop, or duplicate the resource/capability?”
Organization: "Is the firm organized, ready, and able to exploit the resource/capability?"
Sorensen 2012
11. A model for structural analysis
Source: Johnson & Scholes,
13. Understanding your position in the value chain
Influences the business and operational model
Sets the resources and capabilities required
Helps identify potential customers, suppliers, partners
and competitors
Helps identify barriers to entry
14. Example: Value Chain for Mobile Services
Content creation, packaging Advertising Content distribution and Devices, software and Transactions, user
and publishing access provision applications experience, management
Meta-
Content Content content Distribution Airtime,
creators packagers creators, develo Media Distribution networks eg User
Ad Bandwidth, Delivery Operating Application Transactions management End users
and and pers Advertisers planners servers/
networks ISPs, Mobile Purchase devices System s/w s/w
developers publishers and and buyers pumps tools
Operators credits
packagers
• Commission • Advertising deals • Licensing of • Developer • Integration deals
creation of rich for revenue technology for relationships with with payment
media content generation building server O/S vendors gateways, app
• Localisation of through portal infrastructure • Agreements with exchanges
international • Participation in Ad • Relationships with manufacturers for • Affiliate deals to
content networks, interfac suppliers for pre-loading 3G generate traffic
• Packaging content es infrastructure VAS apps and promotions
for 3G mobile • Affiliate related services • Partnerships/ co- • End user
relationships with • Develop/acquire promotion deals management, serv
owners of mobile billing engines for with application ice customisation
assets tracking, analytics S/W vendors
16. Example – Pharma industry value chain
Drug Sales,
New Target Scale up &
Lead Identification Development Manufacturing
Technology Identification Launch
& Optimisation & Supply
Marketing & Distribution
Pharmaceuticals
Product-focused Biotech
Technology-focused Biotech
17. New venture creation stages at the University - modelled on the value chain
Generate IP
Awareness Interest opportunities negotiation Validation Emerging venture Funding Commercialisation Start-up
CfEL CfEL
Enterprise
Enterprise Tuesday rs ETECH - MBA ETECH - MBA E - in - R Angel community Local lawyers, accountants et al
Enterprise Champions IGNITE Investors IdeaSpace
CE Licence
Mentors VCs St Johns Innovation Centre
Science Parks' management
CUE CUE Cambridge Angels teams
CUTEC iTEAMS Angel community
MOTI
Downing College CIKC Alumni
Pembroke College Students' own ideas CE or outside Alumni
PGDE is not open to students on other courses
22. Market attractiveness – company strengths
Strengths and capabilities
Long Term Market
Attractiveness
After - Johnson & Scholes,
23. Ansoff Matrix as a strategic tool
New
Plastic Logic
Detail in Handout
Customers
Markets/
ARM
Existing
Existing New
Products/Services
Technologies Ansoff