The Value of Business Models #BusinessModel #Innovation
Does your business need a make-over?
Did you ever think about changing your business model?
But are you unsure how to start?
In this course, we’ll explain why business models matter to small businesses like you!
It’s all about creating and capturing value for your customers and for your company.
So what will you learn in this course?
In the first block, we’ll explain why business model innovation matters to you.
But also – how business models can bring value to your company.
In the second block, we’ll explain what business models are, and how they can be changed.
And in the third block, we’ll show how tooling can help you to make things easier.
Now every block follows the same pattern.
We first give an introduction to the topic.
Then, you learn how to use a tool for innovating your business model.
You’ll then apply the tool on a case example.
All this lays the basis for applying what you’ve learned in an assignment,
to actually improve your own business.
Let’s take an example:
Klink owns a small bakery shop.
He has had a profitable business for three generations.
But now a big supermarket is opening up next door.
The supermarket sells bread at half his price.
What should Klink do?
Lower his prices?
Start selling to an upmarket, like luxury pastry?
For on a niche market, like wedding cakes?
Make his current product more valuable by adding baking master classes?
Go digital and deliver bread with drones?
What Klink needs is a new business model.
So what are business models?
Business models are not just about how you make money.
They are about how you create value for your customers.
And how you capture value for yourself.
Business models are about the logic in which you create and capture value.
Let’s give a few examples of business model innovation.
One famous example is servitization.
Let’s look at Microsoft Office.
Microsoft used to sell Word and Excel to people like you.
But now they offer Office360 in the cloud.
You don’t buy and own the software, but you can use it whenever you need it.
So they changed their business model from a product – selling software –
to a service – offering office in the cloud.
We call this servitization.
Another example of business model innovation is service unbundling.
This is what cheap airlines like Ryanair or Norwegian are doing.
If you fly with them, you have to pay for everything separately.
The transport of your suitcase, the drink on the plane.
But the flight itself costs almost nothing.
This type of business model innovation we call it service unbundling.
The opposite example is service bundling.
For instance, mobile phone operators do this:
you buy a bundle of voice minutes, SMS messages, and megabytes.
And perhaps even some mobile TV subscription.
This is called service bundling: offering a bunch of products and services for one price.
So how can these examples of big companies help a small business like you?
Well, small and medium sized companies can do the same types of business model innovations.
Small stores are offering home delivery of fresh vegetables – Servitization.
Hairdressers are offering you a glass of wine while you wait – Service bundling.
Bed & breakfasts are offering their breakfast for an additional price – Service unbundling.
So, let’s go back to Klink, the bakery owner.
What business model pattern could he use?
We challenge you to think about this in the first case assignment.
In the past twenty years, we have been studying business model innovation.
We have seen dozens of companies perform better because they changed their business model.
And no, it’s not rocket science.
But it does require thinking about the core logic of your day-to-day activities.
Why are you doing what you do?
For what reason did you, or your family, start the company?
Why was it a good idea back then – and is it still now?
And with all the new digital technologies coming up – do they affect your business logic?
How to answer all these questions?
In our experience, structured thinking and simple tools can help a lot to get answers.
Answers that lead to executable actions, and a greater performance of your company.
Many business model innovations are not completely new.
And many people get inspired by looking at what other businesses are doing.
Like, can the Ryanair model help your business?
We made a business model card game.
The card deck has business model patterns that can be used by any business,
whether they are small or big.
For example, look at card 8 in the card deck.
It shows the self-service concept like IKEA is using.
Would that work for your business model innovation?
Or card 11 about `no frills’.
In that case, a product is stripped to its very basics, so it can be offered at a low price.
How would you strip down your product?
We have created this fun and easy card deck to get you inspired by looking at other businesses do.
In the business model card game we collected 48 business model patterns.
Some you’ll know, some will be new.
You can play the game alone or with your colleagues.
Pick a few cards.
Read them out loud.
And answer the simple question: Could this pattern improve your business?
In this block, we challenge you to use the card game in two ways.
First, use the card game to help the bakery.
Next, apply the card game to help your own company.