Open Services Innovation for ViewRun

1. Open Services Innovation for ViewRun Alex Timberman, J.D. Department of Economics Hannam University

2. Motorola Razor

3. Nokia • Global Distribution and Cost Leader • Strong position in emerging markets • But phone becomes more than communication because of services and applications • No platform or services developed from Motorola or Nokia

4. Apple and Google • Apple and Google created service business models and platforms to takeover • Nokia sold handset division to Microsoft in 2013 with 99% shareholder approval • Will Samsung have to change from product into a services oriented model to continue record profits?

5. Service Innovation Principles • Wrap services around products (Geek Squad) • Turn products into solutions (Outsourcing Servers) • Co-create innovations with customers (Threadless.com) • Use openness to get more from solutions (Wikipedia) • Build a platform, that allows even rivals and 3rd parties to add value (Apple iTunes)

6. Threadless

7. A Different Perspective “ What the customer buys and considers value is never a product. It is always utility – that is, what a product does for him.” Peter Drucker • Product Based – customer is consumer, quality means zero defects, value from exchange, or buy and bye • Service Based – Quality is customer satisfaction, focus is on process, customer is co-creator, or always keeping in touch

8. Difference in Products and Services • Grocery store – wide selection, quality, price (Product) • Grocery store makes revenue by small markup over cost, very high volume, and rapid inventory turns. • Chef – provides dining experience using same ingredients (Services) • Chef makes revenue by high markups over cost, low volume, alcohol, and tips

9. Utility in Product and Service • A car is driven on average 12,000 miles or only 400 hours. Your product utilization is only 4.6% • But a taxi used as a service gets driven on average for over 8,000 hours a year • In Seoul, new businesses are arising, providing the service of a car to customer, around a service-based business model. • Can you and customer get more utility out of product, if looked at as a service?

10. Some Business Models • IBM manages company data on its servers and not on yours (Sold PC division long time ago and makes significant revenue from services) • Xerox charges per copy, while providing all of the after service and customer support (sustainable business model)

11. More Business Models • UPS is not only the shipper but manages inventory of customer in their warehouse, becoming the shipping department • Apple sells great products iPhone, iPad, iPod, because of its great iTunes service (Able to cross-sell)

12. More Business Models • Best Buy makes margin selling big TVs (Main business) • Best Buy Geek Quad makes much more margin by delivering TV, hooking up the cable, programming the TV, taking away the old TV, and selling a warranty • By doing this over and over, they become better at it than anyone else. (Retailor incorporating service)

13. Geek Squad

14. Why Incorporate Services ? • Services can become a source of revenue • Leads to higher customer satisfaction and loyalty • Develops tacit knowledge, which can be used to better serve other customers, providing an edge against competition

15. Opportunities for Service Innovation • Providing a service to a larger firm, utilizing large firm’s resources. (Specialization) • Stay ready to become a potential supplier, partner, or customer for large firms. • How can you provide a better experience for Viewrun clients and at critical stage points? (Initial view on website, phone call, facility visit, follow up, comparing cameras)

16. Building a Platform for Services • How can you build a platform for competitors to be able to build on? Partners will complement your services, making yours more valuable. • Microsoft created a Microsoft-certification program and allowed vendors to teach classes. This created a nice business for Microsoft, business for vendors, and greater loyalty to Microsoft. (Eco-system)

17. Building a Platform for Services • Could Viewrun create some platform for IP or MV solutions? • Any opportunities for co-creation with customers? For example, book reviews by readers allows Amazon to help the buyer choose what to buy. What about for Cameras? • Share detailed case studies and solutions of past projects, even allowing competitors to share their knowledge? (Key is in presentation and delivery and execution)

18. Incorporating Service • How can you incorporate service revenue models into your business? • FedEx introduced a package tracking system, allowing customer to track it anywhere, providing service to create higher satisfaction and greater customer loyalty. • Any wild ideas on incorporating services into the business model?

19. Summary • Services account for 80% of economic activity in the USA (Always growing) • Diversifying revenue to services can lead to competitive advantage and escape from commodity trap • Use tacit knowledge to co-create with customers • How can we serve resellers to help them serve their clients?

20. Summary • Identify your service, associated with the product • Turn your “freebies” into bundled options on a price menu • Everything has a life cycle: us, business, industries, products, countries, and even religion. Key is in revival • Revival can come from new product, new target market, and even a new business model

21. Action Plan • Think more about the importance of services • Improve the value and utility of what you can offer to customers (What do your customers really want?) • Search for underutilized assets or tacit knowledge within Viewrun (Like cars versus taxi) • Create a platform that connects your product with a service, bringing people back over and over again • Invite others to participate in your platform