BUSINESS MODEL GENERATION

Yves Pigneur Patrick Van Der Pijl Alexander Osterwalder Alan Smith Tim Clark

www.businessmodelgeneration.com, EUR 27,60

THE CORE TEAM a core team did the heavy lifting in authorship, design and production of this collaborative effort involving over 400 strategy practitioners from around the world. Lead authors Alexander Osterwalder, Ph.D, and Professor Yves Pigneur, Ph.D., Creative Director & Designer Alan Smith from The Movement, Producer Patrick Van der Pijl of Business Models Inc. and Editor Tim Clark of Hitotsubashi University Graduate School of International Corporate Strategy.

www.businessmodelgeneration.com

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AGENDA
1. 2. 3. 4. 5. 6. 7. 8. 9. BUSINESS MODEL BUSINESS MODEL EXAMPLES MORE... BUSINESS MODEL REVENUE MODEL BUSINESS MODEL BUSINESS MODEL MISC. FRAMEWORK

ENVIRONMENT MEASUREMENTS INNOVATION
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1.

BUSINESS MODEL

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BUSINESS MODEL

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BUSINESS MODEL

A Business Model Of A Company Is A Simplified Representation Of Its Business Logic.

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BUSINESS MODEL

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BUSINESS MODEL

BUSINESS MODEL “describes what a company offers its customers, how it reaches them and relates to them, through which resources, activities and partners it achieves this and finally, how it earns money.”

Dr. Alexander Osterwalder

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KP

KA

VP

CR

CS

2.
C$

by Alexander Osterwalder & Yves Pigneur (taken from the book „Business Model Generation“)

BUSINESS MODELCH FRAMEWORK KR
R$
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2.

BUSINESS MODEL FRAMEWORK by Alexander Osterwalder & Yves Pigneur (taken from the book „Business Model Generation“)

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CUSTOMER SEGMENTS/CS

An organization serves one or several Customer Segments.

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VALUE PROPOSITIONS/VP

To solve customer problems and satisfy customer needs with value proposition.

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CHANNELS

Value propositions are delivered to customers through communication, distribution, and sales channels.

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CUSTOMER RELATIONSHIPS

Customer relationships are established and maintained within each Customer Segment.

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REVENUE STREAMS

Revenue streams result from value propositions successfully offered to customers.

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KEY RESOURCES/KR

Key resources are the assets required to offer and deliver the previously described elements...

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...by performing a number of Key Activities.

KEY ACTIVITIES/KA

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KEY PARTNERSHIP/KP

Some activities are outsourced and some resources are acquired outside the enterprise.

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COST STRUCTURE/C$

The business model elements result in the cost structure.

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3.

EXAMPLES

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EXAMPLE
KP KA VP CR CS

KR

CH

C$

R$

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE
KP
rec compord anies

KA

hardw desigare n

VP

CR
Genius

CS

e mark

ting

seamle ss m expeuisic r ence

swi tc cos hing ts

mass market

‘s OEM

people

Apple brand

CH e Appl s store

conten agreem t & ents

iPod are ardw h iTunes software

re l stotais re

apple.co

m

C$ people turing anufac m

R$ marke tn saleis g &

iTunes store

large har dw revenuesare

usic me m es so evenu r

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE: APPLE iPOD/iTUNES BUSINESS
How did APPLE achieve such dominance? Because it competed with a better BUSINESS MODEL. ON THE ONE HAND: - offered a seamless music experience by COMBINING it‘s DISTINCTIVELY DESIGNED iPod devices with iTunes SOFTWARE and iTunes ONLINE STORE - allows to easily search, buy, enjoy digital music ON THE OTHER HAND: - Apple had negotiate deals with all major record companies to create the world‘s largest online music library (to make this value Proposition possible) Combination of device, software, online store = dominant market position
„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE: Google‘s BUSINESS MODEL
What is the heart of Google‘s BUSINESS MODEL? It its the VALUE PROPOSITION of providing extremely targeted text advertising globally over the web.

Google offers distinct VPs to three interdependent Customer Segments. Google has one main Revenue Stream that subsidizes other offers (Revenue Stream is replaced by „free“) Google‘s Key Resource is its search platform, which powers three different services: 1)Web search (Google.com) 2)Advertising (AdWords) 3)Content monetization (AdSense)
„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE: Google‘s BUSINESS MODEL
KP KA VP
Targeted Ads
Free Search

CR

CS
Advertisers

Web Surfers

KR
Monetizing Content

CH
Content Owners

C$

R$

Keyword Auctions Free

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE: Google‘s BUSINESS MODEL
KP KA
Platform Management, Managing Services, Expanding Reach

VP
Targeted Ads
Free Search

CR

CS
Advertisers

Web Surfers

KR
Search Platform
Monetizing Content

CH
Content Owners

C$
Platform Costs

R$

Keyword Auctions Free

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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Wii VS. PSP/Xbox SAME PATTERN, DIFFERENT FOCUS
How can you explain the commercial success of the Wii? Same pattern, but different BUSINESS MODEL.

ON THE ONE HAND: console manufacturer has to draw as many players as possible to attract game developers ON THE OTHER HAND: players only buy the hardware if there is a sufficient number of interesting games available

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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Wii VS. PSP/Xbox SAME PATTERN, DIFFERENT FOCUS
2 MAIN COMPETITORS dominated game console market:

- Sony Playstation series

- Microsoft Xbox series

Wii catapulted

to the market leader position through astonishingly different BP.

3 interlinked BM SUCCESS FACTORS: 1) low-cost differentiation's of the product (motion control) 2) Focus on a new, untapped market that cares less about technology (casual gamers) 3) A double-sided platform pattern that generates revenues from both “sides“ of the Wii
„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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EXAMPLE
KP KA VP
„Famil y Conso le“

CR

CS
Casual Gamers

KR

to Access ers le Us Conso Game ap & Che ent velopm De Costs

CH

Game Develo p er s

C$

R$

Profita b

le Hard ware Sales

Royalties
„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur

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4.

MORE...

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THREE CORE BUSINESS TYPES
Product Innovation Customer Relationship Management Infrastructure Management

Early market entry enables charging premium prices and acquiring large market share; speed is key

Culture Competition

Economics

Battle for talent; low barriers to entry; many small players thrive

Employee centered; coddling the creative stars

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur, Graphic: Hagel and Singer, 1999

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THREE CORE BUSINESS TYPES
Product Innovation Customer Relationship Management Infrastructure Management

Early market entry enables charging premium prices and acquiring large market share; speed is key

Culture

Economics

High cost of customer acquisition makes it imperative to gain large wallet share; economies of scope are key

for scope; rapid Battle for talent; low Battle barriers to entry; many consolidation; a few big players dominate small players thrive

Competition

Employee centered; Highly service oriented; customercoddling the creative comes-first mentality stars

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur, Graphic: Hagel and Singer, 1999

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THREE CORE BUSINESS TYPES
Product Innovation Customer Relationship Management Infrastructure Management

Early market entry enables charging premium prices and acquiring large market share; speed is key

Culture

Economics

High cost of customer acquisition makes it imperative to gain large wallet share; economies of scope are key

High fixed costs make large volumes essential to achieve low unit costs; economies of scale are key

for scope; rapid Battle for talent; low Battle barriers to entry; many consolidation; a few big players dominate small players thrive

Battle for scale; rapid consolidation; a few big players dominate

Competition

Employee centered; Highly service oriented; customercoddling the creative comes-first mentality stars

Cost focused; stresses standardization, predicability, and efficiency

„Business Model Generation“ by Alexander Osterwalder & Yves Pigneur, Graphic: Hagel and Singer, 1999

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PATTERNS OVERVIEW
The Long Tail
CONTEXT (Before)

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models R&D Resources and Key Activities are concentrated in-house: Ideas are invented „inside“ only, Results are exploited „inside“ only

The Value Proposition targets only the most profitable clients.

An integrated model combines infrastructure management, product innovation, and CRs under one roof.

One VP targets one CS.

A high-value, high-cost VP is offered to paying customers only.

Costs are too high. Several conflicting Targeting less profitable organizational cultures segments with specific VP are combined in a single is too costly. entity, resulting in undesirable trade-offs.

Enterprise fails to acquire potential new customers who are interested in gaining access to a The high price dissuades company‘s existing costumers. customer base (e.g. game developers who want to reach console users). A VP „giving access“ to a company‘s existing CS is added (e.g. game console manufacturer provides software developers with access to its users)

CHALLENGE

R&D is costly and/ or productivity is falling.

The business is The new or additional VP unbundled into three targets a large number of seperate but historically less profitable, complementary models dealing with niche Customer -Infrastructure Segments-which in aggregate are profitable. management, Product innovation, Customer relationships

Internal R&D Resources and Several VPs are offered to different Activities are CSs with different leveraged by Revenue Streams, utilizing outside one of them being partners. Internal R&D results are free-of-charge (or very low cost). transformed into a VP, offered to interested CSs.
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SOLUTION (After)

PATTERNS OVERVIEW
The Long Tail
CONTEXT (Before)

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models R&D Resources and Key Activities are concentrated in-house: Ideas are invented „inside“ only, Results are exploited „inside“ only

The Value Proposition targets only the most profitable clients.

An integrated model combines infrastructure management, product innovation, and CRs under one roof.

One VP targets one CS.

A high-value, high-cost VP is offered to paying customers only.

Costs are too high. Several conflicting Targeting less profitable organizational cultures segments with specific VP are combined in a single is too costly. entity, resulting in undesirable trade-offs.

Enterprise fails to acquire potential new customers who are interested in gaining access to a The high price dissuades company‘s existing costumers. customer base (e.g. game developers who want to reach console users). A VP „giving access“ to a company‘s existing CS is added (e.g. game console manufacturer provides software developers with access to its users)

CHALLENGE

R&D is costly and/ or productivity is falling.

The business is The new or additional VP unbundled into three targets a large number of seperate but historically less profitable, complementary models dealing with niche Customer -Infrastructure Segments-which in aggregate are profitable. management, Product innovation, Customer relationships

Internal R&D Resources and Several VPs are offered to different Activities are CSs with different leveraged by Revenue Streams, utilizing outside one of them being partners. Internal R&D results are free-of-charge (or very low cost). transformed into a VP, offered to interested CSs.
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SOLUTION (After)

PATTERNS OVERVIEW
The Long Tail
CONTEXT (Before)

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models R&D Resources and Key Activities are concentrated in-house: Ideas are invented „inside“ only, Results are exploited „inside“ only

The Value Proposition targets only the most profitable clients.

An integrated model combines infrastructure management, product innovation, and CRs under one roof.

One VP targets one CS.

A high-value, high-cost VP is offered to paying customers only.

Costs are too high. Several conflicting Targeting less profitable organizational cultures segments with specific VP are combined in a single is too costly. entity, resulting in undesirable trade-offs.

Enterprise fails to acquire potential new customers who are interested in gaining access to a The high price dissuades company‘s existing costumers. customer base (e.g. game developers who want to reach console users). A VP „giving access“ to a company‘s existing CS is added (e.g. game console manufacturer provides software developers with access to its users)

CHALLENGE

R&D is costly and/ or productivity is falling.

The business is The new or additional VP unbundled into three targets a large number of seperate but historically less profitable, complementary models dealing with niche Customer -Infrastructure Segments-which in aggregate are profitable. management, Product innovation, Customer relationships

Internal R&D Resources and Several VPs are offered to different Activities are CSs with different leveraged by Revenue Streams, utilizing outside one of them being partners. Internal R&D results are free-of-charge (or very low cost). transformed into a VP, offered to interested CSs.
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SOLUTION (After)

PATTERNS OVERVIEW
The Long Tail
CONTEXT (Before)

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models R&D Resources and Key Activities are concentrated in-house: Ideas are invented „inside“ only, Results are exploited „inside“ only

The Value Proposition targets only the most profitable clients.

An integrated model combines infrastructure management, product innovation, and CRs under one roof.

One VP targets one CS.

A high-value, high-cost VP is offered to paying customers only.

Costs are too high. Several conflicting Targeting less profitable organizational cultures segments with specific VP are combined in a single is too costly. entity, resulting in undesirable trade-offs.

Enterprise fails to acquire potential new customers who are interested in gaining access to a The high price dissuades company‘s existing costumers. customer base (e.g. game developers who want to reach console users). A VP „giving access“ to a company‘s existing CS is added (e.g. game console manufacturer provides software developers with access to its users)

CHALLENGE

R&D is costly and/ or productivity is falling.

The business is The new or additional VP unbundled into three targets a large number of seperate but historically less profitable, complementary models dealing with niche Customer -Infrastructure Segments-which in aggregate are profitable. management, Product innovation, Customer relationships

Internal R&D Resources and Several VPs are offered to different Activities are CSs with different leveraged by Revenue Streams, utilizing outside one of them being partners. Internal R&D results are free-of-charge (or very low cost). transformed into a VP, offered to interested CSs.
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SOLUTION (After)

PATTERNS OVERVIEW
The Long Tail
CONTEXT (Before)

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models R&D Resources and Key Activities are concentrated in-house: Ideas are invented „inside“ only, Results are exploited „inside“ only

The Value Proposition targets only the most profitable clients.

An integrated model combines infrastructure management, product innovation, and CRs under one roof.

One VP targets one CS.

A high-value, high-cost VP is offered to paying customers only.

Costs are too high. Several conflicting Targeting less profitable organizational cultures segments with specific VP are combined in a single is too costly. entity, resulting in undesirable trade-offs.

Enterprise fails to acquire potential new customers who are interested in gaining access to a The high price dissuades company‘s existing costumers. customer base (e.g. game developers who want to reach console users). A VP „giving access“ to a company‘s existing CS is added (e.g. game console manufacturer provides software developers with access to its users)

CHALLENGE

R&D is costly and/ or productivity is falling.

The business is The new or additional VP unbundled into three targets a large number of seperate but historically less profitable, complementary models dealing with niche Customer -Infrastructure Segments-which in aggregate are profitable. management, Product innovation, Customer relationships

Internal R&D Resources and Several VPs are offered to different Activities are CSs with different leveraged by Revenue Streams, utilizing outside one of them being partners. Internal R&D results are free-of-charge (or very low cost). transformed into a VP, offered to interested CSs.
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SOLUTION (After)

The Long Tail

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models

Acquiring R&D from external IT and management IT and operations sources can be less tool improvements management An intermediary Non-paying CSs are expensive, improvements allow allow separating and operating platform subsidized by resulting in faster coordinating delivering tailored between two or more paying customers time-to-market. different business VPs to a very large CSs adds in order to attract Unexploited models at lower cost, Streams toRevenue number of new the initial the maximum innovations have thus eliminating customers at low model. number of users. the potential to undesirable tradecost. bring in more offs. revenue when sold outside.

RATIONALE

Publishing Industry (Lulu.com) LEGO

Private Banking Mobile Telco

Google; Video game consoles from Nintendo; Sony, Microsoft; Apple; iPod, iTunes, iPhone

Advertising and newspapers; Metro; Protector&Gamble; Flickr; Open Source; GlaxoSmithKline; Red Hat; Skype (vs Incentive Telco); Gillette; Razor and blades

EXAMPLES

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The Long Tail

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models

Acquiring R&D from external IT and management IT and operations sources can be less tool improvements management An intermediary Non-paying CSs are expensive, improvements allow allow separating and operating platform subsidized by resulting in faster coordinating delivering tailored between two or more paying customers time-to-market. different business VPs to a very large CSs adds in order to attract Unexploited models at lower cost, Streams toRevenue number of new the initial the maximum innovations have thus eliminating customers at low model. number of users. the potential to undesirable tradecost. bring in more offs. revenue when sold outside.

RATIONALE

Publishing Industry (Lulu.com) LEGO

Private Banking Mobile Telco

Google; Video game consoles from Nintendo; Sony, Microsoft; Apple; iPod, iTunes, iPhone

Advertising and newspapers; Metro; Protector&Gamble; Flickr; Open Source; GlaxoSmithKline; Red Hat; Skype (vs Incentive Telco); Gillette; Razor and blades

EXAMPLES

29

The Long Tail

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models

Acquiring R&D from external IT and management IT and operations sources can be less tool improvements management An intermediary Non-paying CSs are expensive, improvements allow allow separating and operating platform subsidized by resulting in faster coordinating delivering tailored between two or more paying customers time-to-market. different business VPs to a very large CSs adds in order to attract Unexploited models at lower cost, Streams toRevenue number of new the initial the maximum innovations have thus eliminating customers at low model. number of users. the potential to undesirable tradecost. bring in more offs. revenue when sold outside.

RATIONALE

Publishing Industry (Lulu.com) LEGO

Private Banking Mobile Telco

Google; Video game consoles from Nintendo; Sony, Microsoft; Apple; iPod, iTunes, iPhone

Advertising and newspapers; Metro; Protector&Gamble; Flickr; Open Source; GlaxoSmithKline; Red Hat; Skype (vs Incentive Telco); Gillette; Razor and blades

EXAMPLES

29

The Long Tail

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models

Acquiring R&D from external IT and management IT and operations sources can be less tool improvements management An intermediary Non-paying CSs are expensive, improvements allow allow separating and operating platform subsidized by resulting in faster coordinating delivering tailored between two or more paying customers time-to-market. different business VPs to a very large CSs adds in order to attract Unexploited models at lower cost, Streams toRevenue number of new the initial the maximum innovations have thus eliminating customers at low model. number of users. the potential to undesirable tradecost. bring in more offs. revenue when sold outside.

RATIONALE

Publishing Industry (Lulu.com) LEGO

Private Banking Mobile Telco

Google; Video game consoles from Nintendo; Sony, Microsoft; Apple; iPod, iTunes, iPhone

Advertising and newspapers; Metro; Protector&Gamble; Flickr; Open Source; GlaxoSmithKline; Red Hat; Skype (vs Incentive Telco); Gillette; Razor and blades

EXAMPLES

29

The Long Tail

Unbundling Business Models

Multi-Sided Platforms

Free as a Business Model

Open Business Models

Acquiring R&D from external IT and management IT and operations sources can be less tool improvements management An intermediary Non-paying CSs are expensive, improvements allow allow separating and operating platform subsidized by resulting in faster coordinating delivering tailored between two or more paying customers time-to-market. different business VPs to a very large CSs adds in order to attract Unexploited models at lower cost, Streams toRevenue number of new the initial the maximum innovations have thus eliminating customers at low model. number of users. the potential to undesirable tradecost. bring in more offs. revenue when sold outside.

RATIONALE

Publishing Industry (Lulu.com) LEGO

Private Banking Mobile Telco

Google; Video game consoles from Nintendo; Sony, Microsoft; Apple; iPod, iTunes, iPhone

Advertising and newspapers; Metro; Protector&Gamble; Flickr; Open Source; GlaxoSmithKline; Red Hat; Skype (vs Incentive Telco); Gillette; Razor and blades

EXAMPLES

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5.

BUSINESS MODEL ENVIRONMENT

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BUSINESS MODEL ENVIRONMENT
Key Trends

Industry Forces Macro Economic Forces

Market Forces

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-FORESIGHT-

Key Trends

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Industry Forces Macro Economic Forces
-MACRO-ECONOMICS-

Market Forces

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-FORESIGHTRegulatory Trends
Tec hno lo gy T

Societal & Cultural Trends

ren ds

Key Trends

o Econ cial- nds So Tre

mic

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Industry Forces Macro Economic Forces
-MACRO-ECONOMICS-

Market Forces

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-FORESIGHTRegulatory Trends
Tec hno lo gy T

Societal & Cultural Trends

tS eg me nts

ren ds

rk e

Ma

s&

De

ma nd

Key Trends

o Econ cial- nds So Tre

mic

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Market Forces

Ne ed
Market Issues itc Sw g hin ue s ven es Re tiven rac Att sts Co

Industry Forces Macro Economic Forces
-MACRO-ECONOMICS-

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-FORESIGHTRegulatory Trends
Tec hno lo gy T

Societal & Cultural Trends

tS eg me nts

ren ds

rk e

Ma

s&

De

ma nd

Key Trends

o Econ cial- nds So Tre

mic

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Market Forces

Ne ed
Market Issues itc Sw g hin ue s ven es Re tiven rac Att sts Co

Industry Forces l Globa onditi a r k et C M ons

Macro Economic Forces Commodities &

Econo Infras mic tructu re

Capital Markets

Other Resources

-MACRO-ECONOMICS-

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-FORESIGHTRegulatory Trends
Tec hno lo gy T

Societal & Cultural Trends

tS eg me nts

ren ds

rk e

Ma

s&

De

ma nd

Key Trends

o Econ cial- nds So Tre

mic

r the &O s er s pli ctor Sup in A a Ch

k Sta eho ld e

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Market Forces

Competitors (Incumbents)

Ne ed
Market Issues itc Sw g hin ue s ven es Re tiven rac Att sts Co

rs

lue Va

Industry Forces

Ne wE ( In sur ntran gen ts ts)

Sub Pro stitu t du cts e &S er v ic e

s

l Globa

onditi a r k et C M

ons

Macro Economic Forces Commodities &

Econo Infras mic tructu re

Capital Markets

Other Resources

-MACRO-ECONOMICS-

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-FORESIGHTRegulatory Trends
Tec hno lo gy T

Societal & Cultural Trends

tS eg me nts

ren ds

rk e

Ma

s&

De

ma nd

Key Trends

o Econ cial- nds So Tre

mic

BMs are designed and executed in specific environments.

r the &O s er s pli ctor Sup in A a Ch

k Sta eho ld e

-MARKET ANALYSIS-

-COMPETITIVE ANALYSIS-

Market Forces

Competitors (Incumbents)

Ne ed
Market Issues itc Sw g hin ue s ven es Re tiven rac Att sts Co

rs

lue Va

Industry Forces

Ne wE ( In sur ntran gen ts ts)

Sub Pro stitu t du cts e &S er v ic e

s

l Globa

onditi a r k et C M

ons

Macro Economic Forces Commodities &

Econo Infras mic tructu re

Capital Markets

Other Resources

-MACRO-ECONOMICS-

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6.

REVENUE MODEL

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REVENUE MODEL

REVENUE MODEL “describes the way in which a business model enables revenue generation.”

Dr. Alexander Osterwalder

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Profit mechanisms Direct
Usage dependent Time Amount Usage independent One-time Recurrent

Indirect

Customer Companies Government

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EXAMPLES
AdWord. AdSense. Advertising. Turnover percentage.

Premium Service.
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7.

BUSINESS MODEL MEASUREMENTS

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HOW TO MEASURE A BM?

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KPI - KEY PERFORMANCE INDICATORS
Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), helps an organization to define and to measure progress toward organizational goals. THE strategy is the direction and scope of the organization over the long term. THIS overall target depends on a number of smaller goals and the processes they are depending on.

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TO KEEP IN MIND!
NUMBER OF INDICATOR: As Much As Needed As Less As Possible! INDICATORS HAVE PURPOSE: Controlling & Steering WHAT are the actual values of the indicators? WHAT are the target values of the indicators? WHAT is the „math“ between both values Validating next step?
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MAKE KPI MEASURE THE PROCESSES BY MAKING THEM:

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MAKE KPI MEASURE THE PROCESSES BY MAKING THEM: Time phased Relevant
Specific

Measurable
Achievable

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KPI‘S will vary based on the model of your business, and what drivers influence your business. KPI‘S shouldn’t change unless your business model changes. EVERYONE across the company should be looking at the same KPIs.

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8.

BUSINESS MODEL INNOVATION

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VALUE CREATION: The value-added potential of many businesses is shifting toward knowledge, systemic innovation, and service-based activities.

EXTENDED ENTERPRISE: Virtual integration, partnerships, strategic alliances, joint ventures, and outsourcing, parts of the extended enterprise, are becoming common parts of competitive strategy.

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BUSINESS MODEL INNOVATION BENEFITS

CITED BY BUSINESS MODEL INNOVATORS - Cost Reduction - Strategic Flexibility - Focus and Specialization

(in order of importance)

- Rapidly Exploit New Market/Product Opportunities - Share or Reduce Risk and Capital Investment - Move from Fixed to Variable Cost

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9.

MISC.

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FINALLY: THE PENDULUM THEORY

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