Produced by Ouke Arts, Strategy Consultant
working for Strategy Boutique Thaesis and supported by trendwatching.com.
http://www.linkedin.com/in/oukearts
http://www.thaesis.nl
http://www.trendwatching.com
Service in the Industry is not a Product Feature but a Business Model
1. Lec
tu
AFS re
MI
Service in the industry is
not a product feature
but a business model
2. ure
Lect I
AFSM
And this lecture will provide you with insights on
how to design new business models based on both
business logic and creative instinct
6. Strategy Consultant: 80% corporate/executive + 20% start-up/new business
2010 Publishers, broadcasters, retailers
and technology companies
2009 Entertainment, telecom and 7%
television production companies 3% 34%
2008 Travel and leisure, architecture,
fashion and professional services
2007 companies
2006 Industrial manufacturing, (bio-)
technology, science and education,
2005 banking and insurance companies
2004 Aviation, automotive, engineering 41%
2003 and construction companies
14%
Retail and FMCG
High-tech industry
Media and technology
Creative industry
Let me introduce myself Professional services
7. Goal to discover new business model(s) together
1. Let’s meet the industry
>>> and your greatest challenges
2. Let’s think services
>>> and use your creative instinct
3. Let’s talk business
>>> and bring in your business logic (finally)
2x45 minutes, with breaks and discussion
10. uire? What value do we deliver to the customer? What type of relationship doe
Which one of our customer’s problems are we helping to solve? Segments expect us to establ
What bundles of products and services are we offering to each Customer Segment? Which ones have we establish
Which customer needs are we satisfying? How are they integrated with
How costly are they?
The industry mainly delivers
high-technology products
and services to businesses
Greatest challenge:
Customer orientation and
service innovation
quire? Through which Channels do o
11. What Key Activities do our Value Propositions require? What value do we deliver to t
Our Distribution Channels? Which one of our customer’s p
ners? Customer Relationships? What bundles of products and
Revenue streams? Which customer needs are we
Research > Development >
Purchasing > Production >
Assembly > Distribution >
Sales > Maintenance
Greatest challenge:
Process innovation and
automation
12. What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
The most important assets
in the industry are physical
(facilities, machines and
systems) and intellectual
(patents)
Greatest challenge:
Human resources
13. Who are our Key Partners? What Key Activities do our Val
Who are our key suppliers? Our Distribution Channels?
Which Key Resources are we acquiring from partners? Customer Relationships?
Which Key Activities do partners perform? Revenue streams?
The industry works in
networks of suppliers and
partners to reduce risks and
acquire access to resources
Greatest challenge:
Managing alliances
14. What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
High proportion fixed costs
Greatest challenge:
Productivity and cost control
15. Service in the industry is
not a product feature
but a business model
Wrap up left-hand side of the business model
1. Greatest challenge for your value proposition
>>> customer orientation and service innovation
2. Greatest challenge for your key activities
>>> process innovation and automation
3. Greatest challenge for your key resources
>>> human resources
4. Greatest challenge for your key partners
>>> managing alliances
5. Greatest challenge for your cost structure
>>> productivity and cost control
17. Break
Goal imagine your ultimate competitor
1. Think of a competitor with unlimited resources and working capital
>>> don’t rely on the past
2. This competitor has as many valuable relationships as you have
>>> forget any market barriers
3. This competitor is operational in business today
>>> let go of the status quo
4. What would this ultimate competitor look like and how would he act?
5. What would you do to deal with this competitor (e.g. prevent/defense/become/...)?
5 minutes, individually
21. uire? What value do we deliver to the customer? What type of relationship doe
Which one of our customer’s problems are we helping to solve? Segments expect us to establ
What bundles of products and services are we offering to each Customer Segment? Which ones have we establish
Which customer needs are we satisfying? How are they integrated with
How costly are they?
The industry mainly delivers
high-technology products
and services to businesses
Greatest challenge:
Customer orientation and
service innovation
quire? Through which Channels do o
22. What type of relationship does each of our Customer For whom are we creating val
ping to solve? Segments expect us to establish and maintain with them? Who are our most important
ering to each Customer Segment? Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
It takes a relationship and a
social space for a customer
to experience a service
Greatest challenge:
Establish relationships
23. Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
The industry’s value chain
hardly facilitates interaction
Greatest challenge:
Create multiple touch-points
what value are our customers really willing to pay?
what do they currently pay?
are they currently paying?
24. No.
mer For whom are we creating value?
th them? Who are our most important customers?
ness model?
The industry offers payers
products and services, not
necessarily solutions to
problems experienced by
actual end-users
Greatest challenge:
Value-driven innovation
25. For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
The industry is asset sale driven
Greatest challenge:
Usage, subscription, licensing models
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26. Service in the industry is
not a product feature
but a business model
Wrap up right-hand side of the business model
1. Greatest challenge for your value proposition
>>> customer orientation and service innovation
2. Greatest challenge for your customer relationships
>>> establish relationships
3. Greatest challenge for your channels
>>> create multiple touch-points
4. Greatest challenge for your customer segments
>>> value-driven innovation
5. Greatest challenge for your revenue streams
>>> usage, subscription, licensing models
27. ds
Tren
Let’s discuss the impact of trends in your markets
29. “The global emerging middle class
now stands at two billion people
who spend USD 6.9 trillion a year,
a figure which is expected to rise
to USD 20 trillion - twice current
”
US consumption - by 2020.
Source: McKinsey,
July 2010
Let’s illustrate
30. “The top ten value creators in the Boston
Consulting Group’s 712-company sample are
all from Asia: five companies listed on stock
exchanges in China, two in Hong Kong, and
one each in India, Indonesia, and South Korea.
”
Source: Boston Consulting Group,
September 2010
Let’s illustrate
31. “The US ranked 24th out of 25 markets around
the world in an examination of green consumer
habits around the world. Approximately two in
three Americans perceive green products to be
too costly and one-third believes they don’t
”
work as well as “regular” products.
Source: GfK Roper,
October 2010
Let’s illustrate
32. “Consumers from emerging markets in the
Asian region are more willing to pay more for
green products. Nearly 95% of Thai consumers,
90% of Chinese consumers and over 80% of
Malaysian and Korean consumers are willing to
pay more, yet less than 60% of consumers from
other Asia-Pacific markets such as Hong Kong
and Australia exhibit willingness to pay more.
”
Source: Datamonitor,
December 2010
Let’s illustrate
33. “A national survey of 1,800 independent
businesses in the US found that 80%
said public awareness of the value of
choosing locally owned businesses had
”
increased in the last year.
Source: ABA,
January 2010
Let’s illustrate
34. “Between the year 2010 and 2040, the
global population age 65 and older
is expected to rise from 530 million
”
to 1.3 billion.
Source: US Census Bureau,
March 2010
Let’s illustrate
35. “The number of non-employer (single
person) businesses in the US, with an
income greater than USD 1,000 (often
secondary sources of income) increased
by 40.5% in the ten years from 1997 to
”
2007.
Source: US Census Bureau,
June 2010
Let’s illustrate
36. “An average of 78% of consumers in the
US, UK, Canada, Brazil, India and China
say they are willing to co-create with
”
brands.
Source: IBM,
January 2010
Let’s illustrate
37. “Each year, global consumers make more
than 500 billion online impressions on
one another regarding products and
”
services.
Source: Forrester,
September 2010
Let’s illustrate
38. Service in the industry is
not a product feature
but a business model
Service design process
1. Discover
>>> goals, strategy, context and customer journey
2. Conceptualize
>>> experiences from end-users to personnel
3. Design
>>> touchpoints, service system, look-and-feel
4. Build
>>> platform, physical locations, media, training
5. Deliver
>>> organise, communicate, evaluate
42. 10 New Business Models for this Decade
1. Localized Low-Cost Business Model beta
2. One-Off Experience Business Model beta
3. Beyond Advertising Business Model beta
4. Markets Are Conversations Business Model beta
5. Low-Budget Innovation Business Model beta
6. Community-Funded Business Model beta
7. Sustainability-Focused Business Model beta
8. Twisted Freemium Business Model beta
9. Unlimited Niches Business Model beta
10. In-Crowd Customers Business Model beta
45. The Business Model Canvas Localized Low-Cost Business Model
4 Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Independent
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Our Distribution Channels?
Customer Relationships?
Simple, small
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Segments expect us to establish and maintain with them?
Which ones have we established?
Higher incomes
Who are our most important customers?
Which Key Activities do partners perform? Revenue streams? Cost efficient Which customer needs are we satisfying? How are they integrated with the rest of our business model?
product/service and cheap How costly are they? in emerging
procurement
designers product/service markets
Lower
customer
expectations
Standardized Marketing Lower-incomes
Minimum
local micro and quality in emerging
specifications
producers management markets
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Income Channelsour Customer Segments
Through which Channels do
want to be reached?
Metropolitan
Resources
Revenue Streams?
generating/self- How are we reaching them now?
How are our Channels integrated? areas in
Which ones work best?
sustaining Which ones are most cost-efficient?
How are we integrating them with customer routines? mature markets
Energy efficient
Brands distribution via
local vendors
Other areas in
mature markets
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
Micro financed How much does each Revenue Stream contribute to overall revenues?
Low prices x
Low costs local banks/
High volumes
foundations
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
51. The Business Model Canvas One-Off Experience Business Model
4 Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Our Distribution Channels?
Customer Relationships? 3rd party
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?
Segments expect us to establish and maintain with them?
Which ones have we established? Customers in
Who are our most important customers?
Which Key Activities do partners perform?
Offline event Revenue streams?
Software Which customer needs are we satisfying? Instant
How are they integrated with the rest of our business model?
see-hear-buy How costly are they? markets of
organizers development consuming
product/service abundance
Conversation Experience
Offline pop-up One-off Instant
engagement seeking
commerce experiences contributing
and initiative customers
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Channelsour Customer Segments
Through which Channels do
want to be reached?
Online retailers Resources
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
Software Online
platform channels
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
Online Commissions
How much does each Revenue Stream contribute to overall revenues? Commissions
Hosting costs presence and pop-up instant online
findability costs commerce retail
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
57. 4
The Business Model Canvas Beyond Advertising Business Model Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Facilitate
Customer Relationships? Trusted
What bundles of products and services are we offering to each Customer Segment? Research,
Which ones have we established? Customers in
Commercial
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?
sharing and product/service compare, mature
partners
contributing advice review markets
Public Facilitate On-demand
Individuals
partners interacting interaction
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Channelsour Customer Segments
Through which Channels do
want to be reached?
Customers in
Review portals Resources
Revenue Streams? How are we reaching them now?
How are our Channels integrated? emerging
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
markets
Facilitation Online
skills channels
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
Content Online
Facilitators management findability Facilitation fees Commissions
costs costs
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
63. The Business Model Canvas Markets Are Conversations Business Model
4 Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Real-time
Customer Relationships? Modular and
What bundles of products and services are we offering to each Customer Segment? Find, follow,
Which ones have we established?
Media
Which Key Activities do partners perform? Revenue streams? Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they? Engaged
tracking and beta products/ interact and
companies customers
conversing services collaborate
Product/service
Non-engaged
improvement
customers
and innovation
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Channelsour Customer Segments
Through which Channels do
want to be reached?
Resources
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
Social media
Online social
skilled
networks
employees
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
Lower product/ How much does each Revenue Stream contribute to overall revenues?Higher
service failure recurrent
costs revenues
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
69. 4
The Business Model Canvas Low-Budget Innovation Business Model Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? What bundles of products and services are we offering to each Customer Segment? Free /
Which ones have we established?
Local customer
Which Key Activities do partners perform? Revenue streams?
Customer Co-created
Which customer needs are we satisfying? How are they integrated with the rest of our business model?
How costly are they?
personalized Early adopters
communities observation products
samples
Global trend Customer
Followers
trackers participation
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Channelsour Customer Segments
Through which Channels do
want to be reached?
Resources
Revenue Streams? How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
Customer Offline
Online
behavior development
channels
intelligence labs
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
Lower product Higher new
development product
costs success rate
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
75. 4
The Business Model Canvas Community-Funded Business Model Day Month Year
No.
Key Key Value Customer Customer
Partners Activities Proposition Relationships Segments
Who are our Key Partners? What Key Activities do our Value Propositions require? What value do we deliver to the customer? What type of relationship does each of our Customer For whom are we creating value?
Who are our key suppliers? Our Distribution Channels? Which one of our customer’s problems are we helping to solve? Segments expect us to establish and maintain with them? Who are our most important customers?
Which Key Resources are we acquiring from partners? Customer Relationships? Community-
What bundles of products and services are we offering to each Customer Segment? Which ones have we established?
Media
Which Key Activities do partners perform? Revenue streams?
Fund Which customer needs are we satisfying?
Community
How are they integrated with the rest of our business model?
How costly are they?
funded Believers
companies management membership
products
Community
Producers Suppliers
management
KeyResources do ourCustomer Relationships?
What Key
Our Distribution Channels?
Value Propositions require? Channelsour Customer Segments
Through which Channels do
want to be reached?
Resources
Revenue Streams? How are we reaching them now? Buyers
Distributors How are our Channels integrated?
Which ones work best?
Which ones are most cost-efficient?
How are we integrating them with customer routines?
Online
Community
community Retail stores
intelligence
platform
Cost Revenue
Structure costs inherent in our business model?
What are the most important
Which Key Resources are most expensive? Streams pay? really willing to pay?
For what value are our customers
For what do they currently
Which Key Activities are most expensive? How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
Marketing Production Distribution Supplier
Product sales Interest
costs costs costs subscriptions
Designer: Ouke Arts (ouke.arts@gmail.com)
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License.
To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/
or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.