CCT 355: E-Business Technologies

1. CCT 355: E-Business Technologies Class 7: Intro to Business Model Generation

2. Administration • Case study – so far pretty good – still a couple of people who missed simple e-commerce/marketing warning though!!! • We start with presentations first – why? • This week: Intro to BMG • Next week: Change Management Simulation Day (anyone not have account yet?) • Groups for final project – start forming on wiki • Proposal to keep you on track due Nov 1 (more of a brainstorming/notes document than anything formal– ungraded, but a good idea, since it helps avoid problems as above.)

3. Why Business Model (Re)Generation • Pink – in an age of abundance, automation and Asia (alliteration!) designing for want, not need, is key • Florida – creative class careers essential for a vibrant economy – creative class as global, interconnected, mobile, diverse • Creative class clusters in welcoming places(e.g., Florida’s “gay hypothesis” – nothing to do with LGBT people per se, just that communities that tolerate difference enable diverse thinking…) • Martin’s notion of design thinking in business – design as the new value add - MFAs as the new MBA?

4. Business Model Generation • Core notions of business concepts are still important – but how they intersect and complement each other key • Nine core components noted in book • All impacted by changes in technology – changes in one iterate among others – model as systemic vs. isolated units • History of book – crowdsourced model with many contributors/insights

5. Customer Segments • For whom are we creating value? Who are our most important customers? • Mass and niche markets • Segmentation – can target multiple segments, but complicated • “Everyone” is NOT a target market

6. Value Propositions • What value do we offer? What problems are we trying to solve? • Range of options – newness, performance, customizability, usability, status, price, risk reduction, etc. • Whatever the decision, it should focus business decision making • Value should tie to customer segments, since they determine value just as much

7. Channels • Communicating value proposition to customer segments • Facilitating customer segments in purchase decisions • How are channels integratedand which work best? Depends on above! • Channel phases – awareness, evaluation, purchase, delivery, after sales support • Outsourced or in-house?

8. Customer Relationships • Expectations management in customer relationship • At what cost good CRM? • From “high touch” services and communities to automated/self-service – different demands and expectations

9. Revenue Streams • How much are customers willing to pay? • Single or multiple streams? How do streams combine into overall revenue? • Different models exist – sale of tangible goods, usage fee, subscriptions, licensing, brokerage fees, advertising, etc. • Dependent on existing revenue stream practices – hard to monetize something that’s free elsewhere!

10. Key Resources • What resources are required to meet value propositions? Distribution? Revenue streams? Relationships? • Resources as broadly defined – could be physical, financial, intellectual, labor • Resource constraints can frustrate delivery of value propisition

11. Key Activities • What key actions realize value propositions? • Production – design, manufacturing, etc. (e.g., most physical good production – e.g., SCM) • Problem solving – identification and satisfactory resolution of customer problems (e.g., consultants, health care, hospitality – e.g., KM/CRM) • Networked/platform – building “ecosystem” of activity (e.g., Apple’s integration, building/maintaining APIs, etc. – business systems analysis encouraging virtuous cycles) • Efficiency and effectiveness of activities

12. Key Partnerships • Who are necessary partners/suppliers? • How does their business model mesh with ours? • Strategic alliances, “cooptition”, joint ventures, established relationships (and exclusivity) • Concerns about scale and risk

13. Cost Structure • What are the most important costs involved? • Cost or value-driven model? Transactional and resource-based models of business • Fixed/variable costs • Economies of scale and scope (horizontal and vertical integration)

14. Patterns, Design, Strategy, Process • Different patterns are evident in mix of core nine components • These patterns are not accidental, but rather designed – many core components of design thinking come into play • Business model (re)generation – very similar in kind to change management process – change causes concern in many domains that needs to be addressed • Not necessarily right/wrong answers – just more/less defensible ones