7 Steps to Generate New Business Models with free video URL

Carl Atsushi HIRANOPresident, NetStrategy, Inc.

invited guest speaker at the Harvard Business School

NetStrategy,Inc. All Rights Reserved1

『7 Steps to generate new Business Model :Basic」

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Profile Carl Atsushi HIRANO

Carl Atsushi HIRANO is well-known as bestselling author in Japan and

currently President of NetStrategy, Inc., a consulting firm, Professor at

Business Breakthrough University (President Kenichi Ohmae), invited guest

speaker at the Harvard Business School, visiting lecturer of Waseda MBA.

Born in the United States, he has a B.A. in economics from the University of

Tokyo. Joined the Industrial Bank of Japan (IBJ now merged to Mizuho

Financial Group) in 1987, where he was a manager in the International and

Investment Banking divisions. He moved to NTTDoCoMo in 1999. There, as

head of i-mode strategic alliances, he was a core member of the core project

for long-term growth and, embarked on the project to develop and popularize

the Mobile Wallet.

In 2007, he founded NetStrategy, Inc., a company providing support for

strategic planning, with Dr. Andrei Hagiu , Associate Professor of Harvard

Business School.



What is Business Model?

Future”VISION”

Social”MISSION”

Corporate Vision

Corporate Strategy

Business Model

Business Model: Structure of Corporate Activities on How to

raise Sale and make Profit

What is Differentiation ?

New Product & Service vs. Business Model


There are 2 Levels on Differentiation

Differentiation on Product & Service

：Easy to copy or imitate for competitors

Differentiation on Business Model

: Take some time for competitors to copy or imitate


3 Thinking Methods to generate new

Product & Service and Business Model

*For Product & Service

Matrix Thinking, Lateral Thinking

*For Business Model

Analogy Thinking

(or Best Practice, Copy cat)

Matrix Thinking


Extract Key Feature of Best selling Product & Service

and Apply such Key Feature to your business

Sample Features: Happy, Environmentally-Friendly,

Problem Solving, sense of superiority, Healthy

⇒ Ex. Apply to your theme park like Disney Land:

Then….

Attraction where you can have massage

Limited People can enter the park

Fortune telling Park etc.

Lateral Thinking


Edward de Bono advocate Lateral Thinking

Ex. Flower

1. Set feature of Flower (defect is prf.)

2. Flower become “dead”

3. “Reverse” such feature

4. Dead⇒ “Alive”

5. Alive flower forever

6. “Artificial Flower” ← New Product!


*Analogy Thinking

(Best Practice & Copy thinking)

“ 80% of Business is Copy of successful company in other

industries” (Isao Hosoya)

⇒ Extract essence of successful business models and

apply to your business with some additional value


Case

* Video Rental Shops VS Banking Loan

You can earn 1US$ per day by rental video business, far more profitable

than lending money!

*Mobile Payment Credit Business by NTTDoCoMo

← Analogy between Plastic Credit Card and Mobile terminal as you pay

your bill 1month after you called

*LCC (Southwest) Toyota(Supermarket) etc.

*Reverse Analogy maybe “Blue Ocean Strategy”

7 Steps to generate new Business Model


１ Understanding the Current business model

２ Convert your Client (ex. B→B⇒B→C）

３ Change your Value Proposition

４ Change your Total Cost for Clients

５ Change your Value Chain

６ Change Management Resources(ex. Human,Fund)

７ Apply patterns of 18 Successful Business Models

Value Chain Value Proposition Client or Customer

Step1 Understanding the Current business model


＊５Framework

１ Client Who is your customer

２ Value Proposition

３ Management Resources（Human, Capital,

Goods, Channel, Knowhow etc.）

４ Differentiation

５ Revenue and Cost, Cashflow

WorkShop: Think about Bakery at your town


Who is customer ?

What is Value Proposition ?

What is Price ?

Revenue and Cost, Cashflow ?

What are Resources ?

How to differentiate from competitor?

Then, think about

What are Complaints or Deficiency of the current situation?

ValueChainValue

Proposition Customer

Step２ Changing your Client


＊Change your current client or customer to others

1) Payer : who actually pay for it?

2) Decision Maker : who decide to purchase it?

3) User : who use it ?

4) Influencer : By whom advice, you decide to purchase it?

5) Shift from Individual to Corporate (B to C ⇒ B to B )

6) Shift from Corporate to Individual

(B to B⇒ B to C)

Step2 Case 1


＊Benesse Corporation (the largest preliminary

school in Japan)

Originally Benesse was making pocket note for

junior high school students. Then using network

with teachers asking them to make questions for

test. Then they entered preliminary school for

students.

Step 2 Case 2


＊Popular Hospital for Aged people

They found their real clients are Not aged people who

enter the hospital. They shift target to sons and

daughters of the aged patient. They investigated

complaints of them, then started 24 hours meeting rule

and prepare condo for family of the aged patient.

＊Gulivar ( the biggest used-cars dealer network)

Usually used-car dealer buy from seller and sell to buyer

directly. Gulivar only buy from seller and sell to market.

Then they can curriculate possible Price which is lower

than their competitors as, which makeGulivar the leader

of the used-car market.

Step3 Change Value proposition


Change your Value Proposition to client

1) Product to Service plus Product

2) Product to Service

3) Service to Product plus Service

4) Service to Product

5) Fully customized product to Semi-customized

product or customized product

6) Complicated to Simplified, Reduced, Deducted

service or easy-to-use product

7) Function oriented to Fashion oriented

8) Provide with other providers (platform)

Step3 Cases


From Hard to Soft

IBM PC Products→ Solution Consulting

From Hard to Hard plus Service or Service

Komatsu, Hilti, Asics Store

Deduct service and Simplified (BlueOcean)

South West Airline, QB house(10US$haircut)

Seven Banks (ATM only bank at Seven Eleven)

Exercise : Apply to Bakery shop


②Change your customer

＊BtoC ←→ BtoB

＊other related parties ?

③Change Value Proposition

＊Product only to Product and Service or Service?

* Only Selling to Sell others on behalf of them?

Sample: bread for Cats ? Aged People? Free bread and inducing to Coking School?

ValueChainValue

PropositionCustomer

Step4 Change Client's total Cost or

Price of Product and Service


１） Deduction of Total CostEx Fluorescent light for tower building

( Not only long endurance but Expire at the same time is cost saving ) , Car Share

２） Change Fixed Cost to Variable Cost vice versaEx Leasing Aircraft by GE, Sony Car Insurance(payment depends upon how many

miles you drive) , Deagostini (low price for first issue and sell high price product by series ) Costco (membership and low price )

３） Freemium (Free plus Premium)

Ex Smartphone game (Free game and some of players buy digital item)

４）Change price depend upon Placement, Target

Ex Coca-cola price (Vending machine to hotel ), Swatch (Low price to high jewelry watch)

Step 5 Differentiate Value Chain


As Dr. Porter point out, Lasting Differentiation lies in Value Chain differentiation Think about Bakery shop!

ValueChainValue

Proposition

Customer

Client

Development of Product or

Service

Material, Supply,

Purchase, LogisticsProduce Distribution

SalesMarketing

ProductService

Step5 Case


Dentsu: The largest advertisement company in Japan “Bundled” value

chain of advertisement (media sales, copy writing, design etc.)

Seven Bank: “Unbundled” banking value chain specialized in ATM service

at Seven Eleven convenience stores nationwide

Hoshino Resort: “Unbundled” hotel value chain specialized in hotel

management alliance with property owners

WOWOW: Japanese TV broadcast making original programs

Step5 Case


* Zara : Speed is core of Value Chain

No Advertisement ,Young Designers chase new trend of fashion,

only a few months to release new clothes with limited number,

Delivery by owned transportation or tracks, Shops at the best

locations worldwide, fair price and affordable price for youngster

• Misumi : Japanese manufacture company for press production :

dramatically reduced dead stock by introducing “half made

product way” then, final processing is made after order from

client but shorten delivery period to only a few days

* Mabuchi Motor: Japanese leading manufacturer for small mortar :

Supply categorized size mortar to clients by reverse proposal of

the size with low price

Exercise on Bakery shop


Step4 Change Client's total Cost or Price of Product and Service

Step 5 Differentiate Value Chain

Step６ Differentiate Management Resources


What is unique in Human resources, Product, Fund , Patent, Brand etc.

Case

BookOff : Japanese leading used book buyer and seller

decide price for purchasing used books based on their cleanness instead of preciousness then hire part-time low salary staff

Kumon : Unique and universal material for student education

⇒ Exercise on Bakery Shop !

Step7 Application of Successful Business

Models of 18 Patterns


Feemium Strategy, Platform Strategy, Open

strategy, Blue Ocean Strategy etc.

Nespresso, Apple, Deagosini,Amazon, Swatch,

Costoco, Disney, IBM GE,Asukuru, Mabuchi,

Misumi, Levis, Unirieva, QB house, LCC, Intel,

Starbucks, Seven Eleven, Coca-cola, Fancl, Dell

etc.

remark:Sorry the book written on 18patterns is

Published in only Japanese and Thai.

7 Steps to generate new Business Model


１ Understanding the Current business model

２ Convert your Client (ex. B→B⇒B→C）

３ Change your Value Proposition

４ Change your Total Cost for Clients

５ Change your Value Chain

６ Change Management Resources(ex. Human,Fund)

７ Apply patterns of 18 Successful Business Models

Value Chain Value Proposition Client or Customer

Thank you very much!!

Contact: Facebook

Carlatsushihirano

Linkedin Carlatsushihirano

You can watch Free Lecture of this

slide at Udemy

https://www.udemy.com/bc15_str

ategy_hirano_001/NetStrategy,Inc. All Rights Reserved27

Small Business & Entrepreneurship

7 Steps to Generate New Business Models with free video URL