Business Model Innovation in Practice

Case Studies

5 Types of Innovation

Product/Service Innovation

Process Innovation

Marketing Innovation

Organisational Innovation

Business Model Innovation

Business Model Innovation

Wells Fargo

American Express

Nokia

Practical Application

The business model canvas can be used when:

Reviewing existing business models e.g. Established business

Creating a new business model e.g. New start-up

Changing a business model within a division

Dell Computers

The personal computer market had become very competitive by the late

1990s

IBM, HP, Toshiba were dominating the market for PCs

For Dell to be competitive they needed to make massive changes

Dell focused on the concept of the value of time

How could the company minimise inventory and bring new products to

market quickly

Dell Computers

Dell’s business model was modified by focusing on the following

components:

Direct customer relationships

Direct sales

Customer segmentation for sales and service

Build-to-order production

Traditional indirect distribution of PCs

Business Model Case Study

Dell’s direct distribution channel

Suppliers PC MakerRetailer Reseller

IntegratorDistributor

Final Customer

Suppliers DellFinal

Customer

Dell Computers

The business model innovation implemented by Dell provided the following

advantages:

Increased market share for personal computers

Ability to deliver a “made-to-order” customised PC quickly to the

customer – 3 to 4 days

Increased client satisfaction

Reduced cost through minimising inventory

Increased profit by utilising a direct sales strategy

Innovative Business Concepts

After 10 years working at the Australian Institute for Commercialisation it

was time to start a business

Focus was a consulting business in innovation and commercialisation

services

Where do I start?

KEY PARTNERS

Other consultants

Investors & Venture Capitalists

Technical specialists (e.g. market research etc)

Channel partners (e.g. government, industry bodies, mastermind groups)

KEY ACTIVITIES

Sales process & pipeline

Direct marketing

Telephone/Meetings

Presentations

Networking

Partnering

VALUE PROPOSITION

Solving complex problems for clients through innovative solutions

Growth through business innovation

Commercialisation services

IP management and path to market advice

Facilitation & education

Coaching & mentoring

CUSTOMER RELATIONSHIPS

Personal relationship (one to one) management

Client maintenance process

Adding value

CUSTOMER SEGMENTS

Start-ups & SMEs

Medium-Large enterprises

Government agencies

CRC’s & ROs

Firms in the following sectors:

o Health/ Biotech o Agriculture o IT o Clean technology o Science &

technology o Mining/ Engineering o Manufacturing

KEY RESOURCES

Intellectual capital, knowledge, skills & experience

Branding & profile

Tools, processes & methodologies

Outsourcing

CHANNELS

Existing networks

Direct marketing

Partnering with other consultants

Tenderlink – gov tender sites

Referrals and word of mouth

COST STRUCTURE

Minimal and lean – “The Lean Start Up” concept

Mainly for marketing & promotion, telephone, travel (MV & parking), tools, printing, network meeting fees, internet, outsourcing

Eventually rent for premises (start with virtual office)

Virtual assistant – admin, telephone sales, diary management

REVENUE STREAMS

Initial Target $250,000

Revenue sources: o Specific consulting projects o Monthly retainers o Delivering presentations and workshops o Medium to long term contract placement o Coaching & mentoring o Board positions o Success fees and equity in business

Identify Key Business OpportunitiesBusiness Opportunities RegisterTimeframe Opportunity Description Source Action Status ValueImmediate UQ Business School BD for the professional certificate in research

commercialisation

Damian Hine 15/05/13 Commercialisation Bootcamps development

& facilitation

09/05/13 Meeting with Damian Hine. Teaching

opportunity available immediately.

Active $21,000

Immediate pd Training Become a trainer for pdTraining Don Fairweather 11/06/12 Received a reply that there were no positions

available and that I needed to have a Cert IV TAE

27/05/13 Sent CV and impactful application letter

Send CV and an impactful cover letter to Don

Closed $6000 per month

Immediate Innovation Australia Board Position Board member position in Canberra Innovation Australia 10/05/13 Submitted online application Completed $2000 per month

Immediate Food Innovation Precinct Board member position in Canberra Innovation Australia 23/05/13 Submitted online application Completed $2000 per month

Immediate Woods Grain consulting Advice on the anti-microbial project Angus Woods Completed numerous projects

19/06/13 Received counter offer

11/06/13 Sent through marked-up changes of Contract

21/05/13 Received Consultancy Contract from Angus

13/05/13 Waiting for contracts

8/5/13 Email terms of engagement

Have a discussion week of 5/5/13

Active $10,400

Immediate Anti-microbial Tea Tree Oil based gel - Stage 1 Commercialise Tea Tree Gel for Bacterial

Vaginosis

Steen from Novasel 16/06/13 Commercialisation Plan delivered

27/05/13 Proposal Accepted and work started

21/05/13 Met and scoped project. Proposal prepared

and sent

Provide consulting rates and plan of engagement

Completed $6,200

Immediate Anti-microbial Tea Tree Oil based gel - Stage 2 Commercialise Tea Tree Gel for Bacterial

Vaginosis

Steen from Novasel Oct 13 Trip to India to visit Cadilla

Stages 2 and 3 completed

19/06/2013 Steen requested quotation for Stages 2, 3

and 4

Completed $9,000

Immediate Tenderlink Tenderlink Tenders Tenderlink Website Register on Tenderlink Completed

Immediate Athletic Greens Investigate securing rights to Athletic Greens for

Asia Pacific region

Craig Ballantyne, ETR Develop my own Super Green product

Contacted affiliate but not interested in promoting

product in Australia

15/06/13 Nicole gave me the affiliate contact for

Athletic Greens

28/05/13 Second email sent to Craig Ballantyne

15/05/13 Contact Craig Ballantyne via email and ask

the question

Active Licensing opportunity

Immediate AIM Opportunities Consultant/Trainer for AIM AIM CEO Contact Vivienne for a meeting/discussion Pending $2,000 per workshop

Immediate Department of SB Facilitator work Robyn Reeve I have been written into their proposal.

Return telephone call

Completed $3,700 per workshop

Next Steps

90 Day Action Plan Date Due to be

Completed

1. Build client database through networking and affiliate marketing programs Ongoing

2. Develop an Ascending Transaction Model to build clients and drive conversion 31/01/14

3. Productise my business offerings into packaged products 31/01/14

4. Develop and implement a marketing campaign every quarter 30/10/13

5. Measure and evaluate the effectiveness of the first campaign 30/11/13

6. Convert prospects into delighted customers through attribution of value 30/11/13

7. Identify and implement an integrated administration system, including finance 30/12/14

8. Investigate different online business systems 28/02/14

9. Identify outsourcing services for the different admin and financial functions 31/01/14

10. Design and implement a website with blog and social media 31/01/14

11. Choose and register URL and web hosting service 31/01/14

12. Write website and blog content and upload 31/01/14

15. Review the value proposition and the Why? for the business 31/01/14

16. Develop a clear and differentiated elevator pitch 31/01/14

14. Improve the Innovative Business Concepts story 30/01/14

13. Review Innovative Business Concepts branding 31/03/14

Conclusion

Every business has a business model

We often don’t give business models much thought

Business models are the key method for articulating value creation (and

profit!)

Business model innovation is an option for everyone

Business Model References

Drucker, P. F. (1994). The theory of the business. Harvard business review,

72(5), 95-104.

Magretta, J. (2002) Why Business Models Matter HBR http://bit.ly/1C3Yfob

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a

handbook for visionaries, game changers, and challengers. John Wiley &

Sons.

References

Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a

handbook for visionaries, game changers, and challengers. John Wiley &

Sons.