Alex Osterwalder, Dr. Osterwalder is a writer, speaker and consultant in the field of business model innovation. The practical business model design methods designed by him and Dr. Pigneur are widely used in companies in various industries, including 3M, Ericsson, Capgemini, Deloitte, Trino and so on.
Dr Yves Pigneur, professor of information system management at the University of Lausanne since 1984, is also a visiting professor at Georgia State University in Atlanta and the University of British Columbia in Vancouver.
Business model describes the basic principles of how enterprises create value, transmit value and obtain value.
This book provides a framework for business models, which enables us to describe and think about the business models of organizations, competitors and other enterprises. This framework provides a common language to describe business models, which is convenient for us to analyze the business models of other enterprises and discover business innovations. Business model can be well described and defined by nine basic building blocks, which can show the logic of creating income for enterprises.
CS customer segmentation, customer group, one or more customer classification groups served by enterprises or institutions. In order to better satisfy customers, enterprises may divide customers into different market segments, and customers in each market segment have common needs, common behaviors and other common attributes. Enterprises must make reasonable decisions about which customer groups should be served and which customer groups should be ignored. Then with a deep understanding of the needs of specific customer groups, design the corresponding business model.
VP value proposition, value proposition, solves customer problems and meets customer needs through value proposition. The value proposition building module is used to describe a series of products and services that create value for a specific customer group. It is the reason why users choose you, and it is the welfare set provided by the company to users.
CH channel channel, channel, provide value proposition to customers through communication, distribution and sales channels. Function: improve customers' understanding of the company's products and services; Help customers evaluate the company's value proposition; Assist customers to purchase specific products and services; Communicate value proposition to customers; Provide after-sales customer support.
Customer relationship, customer relationship, establish and maintain customer relationship in each customer group. Motivation: getting customers; Customer maintenance; Increase sales.
R$ revenue stream, revenue stream, comes from the value proposition successfully provided to customers. Used to describe the company's cash income from each user group and the costs that need to be deducted from the income generation.
KR core resources, that is, key resources, are the most important factors used to describe the effective operation of business models. Such as: physical assets; Knowledge assets; Human resources; Financial assets, etc.
KA's key business, key activities, run the business model by executing some key business activities. Used to describe the most important thing an enterprise must do to ensure its business model is feasible. Such as: manufacturing products; Solve problems; Platform/network.
Important cooperation and key partnership of KP, some businesses need to be outsourced, and some resources need to be obtained from outside the enterprise. Used to describe the network of suppliers and partners needed to make the business model work effectively.
C$ cost structure, cost structure, and cost composition caused by the above business model elements. Characteristics of cost structure: fixed cost; Variable cost; Economies of scale; Scope economy.
Business model canvas
These nine business model building blocks form the basis for building a convenient business model tool, which is called the business model canvas.
There are three different basic business types: customer relationship business, product innovation business and infrastructure business. Each type contains different driving forces of economy, competition and culture. These three types may exist in a company at the same time, but in theory, in order to avoid conflicts or unfavorable trade-offs, these three businesses are "separated" into independent entities.
The core of the long tail business model is diversity and small quantity: they focus on providing a large number of products for niche markets, and the sales of each product are relatively small. The total sales of niche products can be compared with the traditional model of generating most sales with a small number of best-selling products. The long tail model requires low inventory cost and powerful platform, and makes it easy for interested buyers to obtain niche products.
A multilateral platform brings together two or more different but interdependent customer groups. Only when relevant customer groups exist at the same time can such a platform be valuable. Multilateral platforms create value by promoting interaction among various customer groups. Multilateral platforms need to enhance their value until they can attract more users. This phenomenon is called network effect. For example, credit cards connect merchants and cardholders; Computer operating system connects hardware manufacturers, application developers and users: newspapers connect readers and advertisers; Home video game consoles connect game developers and gamers. The key here is that the multilateral platform must be able to attract and serve all customer groups at the same time and create value in this way.
The value of a multilateral platform to a specific user group essentially depends on the number of users on the "other side" of this platform. If there are enough games, a home game platform can attract enough players. On the other hand, if enough gamers are already playing games, game developers will also develop (more) games for new video game consoles. Therefore, multilateral platforms often face the dilemma of "chicken or egg first".
The solution to this problem is to aim at a group. Although the main cost of multilateral platform operators is operating expenses, they often attract one group by providing low-cost or even free services and rely on this group to attract another group. The difficulty faced by operators of multilateral platforms is which group to choose and what price to attract them.
In the free business model, at least one huge customer base can enjoy continuous free services. There are many modes of free service. Provide financial support to non-paying customers through other parts of the business model or other customer groups.
The free business model based on advertising is a manifestation of multilateral platforms. One side of the platform aims to attract users with free content, products or services, while the other side of the platform generates revenue by selling advertising space.
In the mode of free income increase, a large number of basic users benefit from free products or services without any additional conditions. Most free users will never become paying customers: only a small number of users, usually not more than 10% of all users, will subscribe to paid value-added services. The fees paid by this small number of paying users will be used to subsidize free users. This model is only possible if the marginal cost of serving additional free users is extremely low. In the mode of free income increase, the key indicators are the cost of providing free services to unit users and the conversion rate from free users to paying users.
Taking the case of RedHat as an example, I learned that similar SMS service platforms buy sms channel from operators, and then rent it to multiple enterprises to earn service fees, because no enterprise is willing to bear the high cost of purchasing sms channel directly from operators.
In the mode of free income increase, a few customers who pay for advanced services subsidize a large number of customers who don't pay. However, the insurance model is the opposite. In the insurance mode, a large number of users pay small fees regularly to protect themselves from small probability events, which will be devastating once they happen financially. In short, a large number of paying customers subsidize a small number of customers with actual needs, and paying customers can become a member of the beneficiary customer group at any time (that is, compensated customers).
Lure fishing refers to a business model that promotes the repeated purchase of related products or services in the future through cheap, attractive or even free initial products or services. This mode is also known as loss-making trading or razor and blade mode. Loss-making specials refer to products or services that are initially subsidized or even provided at a loss, with the aim of buying profits from customers later.
Razors and blades are used to describe the common idea of attracting customers with initial products or services and earning income from subsequent sales. Mobile communication lines are a good example, and it is a standard practice for mobile network operators to provide binding service subscriptions to free mobile phones. Operators initially gave away their mobile phones for free at a loss, but they can easily make up for the loss through subsequent monthly service fees. Operators provide instant pleasure with free products, and then generate recurring income.
1904, Kim Gillette introduced the first replaceable razor blade to the market, and sold the tool holder at a very low discount, even as a gift of other products, in order to create the demand for disposable blades. The key of this model is to find the close relationship between cheap or even free initial products and subsequent repeated consumption products. Controlling this locked relationship is the key to success. Through patent restrictions, it is fiercely guaranteed that competitors cannot provide cheaper blades for Gillette tool holders. Razor is the most well-protected consumer product in the world, with more than 1000 patents/* low-priced printers and high-priced ink cartridges */
The open business model can be used for enterprises that create and gain value through systematic cooperation with external partners. This model can be "from the outside to the inside", introducing external ideas into the company, or "from the inside out", providing idle ideas and assets within the company to external partners.
I can't cut out a rough list of styles. Excuse me, I want to buy a reference book.
Establish a business model based on customer insight. We should look at the business model from the customer's point of view, which will enable us to discover new opportunities. This is not to say that the business model is designed according to the customer's thinking, but to integrate the customer's thinking when evaluating the business model. The success of innovation depends on a deep understanding of customers, including the environment, daily affairs, customers' concerns and wishes. Adopting customer perspective is the guiding principle of the whole business model design process, which should guide us to choose value proposition, channel access, customer relationship and income source.
The real challenge is to establish a thorough understanding of customers and choose business model design based on this understanding. In the field of product and service design, many leading enterprises cooperate with sociologists to deepen their understanding of customers. The challenge of innovation is based on a deep understanding of customers, rather than simply asking them what they need.
Another challenge is to know which customers should listen and which should ignore. We should avoid paying too much attention to the existing customer base, but should pay attention to the new and satisfactory customer base. Many business model innovations are successful precisely because they meet the unmet needs of new customers.
First, find out the customer segmentation groups and choose one to start the customer description analysis. First, give the customer a name and some demographic characteristics, such as income and marital status. Then ask and answer the following six questions and describe your newly nominated customer on the flip chart or whiteboard. Our goal is to constantly question the assumptions in your business model from the customer's point of view.
Generate new business model ideas. To design a new business model, it is necessary to generate a large number of business model ideas and screen out the best ones. This process of collecting and screening is called creative conception. When designing a new business model, the challenge is to ignore the status quo and stop paying attention to operation, so that we can get really new ideas.
Two stages of creative conception: creative generation and quantity. Creative synthesis, discuss all the ideas, combine them and summarize them into several feasible options. These schemes do not necessarily represent subversive business models, but may only slightly expand your existing business model.
We can divide innovation into four business model innovations with different concentration points, and each of these four concentration points can be the starting point of major business model changes. Sometimes, business models can come from multiple concentration points.
Resource-driven innovation comes from the organization's existing infrastructure, or the expansion of cooperative relations, or the transformation of existing business models.
Product/service-driven innovation is to influence other business model components by establishing new value propositions.
Customer-driven innovation is based on customer needs, reducing acquisition costs or improving convenience. Like all innovations from a single focus, customer-driven innovation will also affect the construction of business models.
Financial-driven innovation is driven by revenue source, pricing mechanism or cost structure, which will also affect other components of business model.
Polycentric-driven innovation is driven by multiple concentration points and will significantly affect other components of the business model.
The value of visual thinking. Visual thinking is very important for the related work of business model. By visual thinking, we mean using visual tools such as pictures, sketches, charts and sticky notes to construct and discuss things. Because the business model is a complex concept composed of various building blocks and their relationships, it will be difficult to really understand a model without describing it.
Visual grammar. It provides visual and textual guidance for sketching the information needed by the business model, because it will tell you which information should be placed in which part of the business model.
Grasp the overall situation. By depicting all the elements on the canvas of the business model, the overall situation of the business model can be displayed intuitively.
View relationships. Commercial canvas can clearly express the relationship between various commercial elements.
Collect reference points. You can post your psychological assumptions and turn them into clear information for reference.
Common language. Provide vocabulary and grammar to help people better understand each other and improve cohesion.
Common burying solutions. Employees in different departments lack a comprehensive understanding of the business model, and the business canvas can let everyone know the business model quickly.
Inspiration triggers. Creativity on commercial canvas will bring more creativity.
Demonstration. Helps you thoroughly think about the systemic impact of modifying business model elements.
Internal/external promotion. Let internal/external personnel clearly understand ideas and plans.
The purpose of storytelling is to present the business model in a concrete image and create different characters from different perspectives, such as the following two perspectives:
From the company's point of view, let employees become the protagonist of the story, because employees frequently pay attention to customers' troubles, and the new model can solve these troubles. In this story, employees reflect the internal operating mechanism of the business model, which provides a foundation for the promotion of the new model.
From the customer's point of view, customers tell their troubles and problems that must be solved. Then talk about how your company helped him create value. In the story, she described what products and services she got, how these products and services solved his problems, and what products and services he was willing to pay as a consumer.
Scenario-based business model design. Scenario speculation: turning abstract concepts into concrete models. The following are two situations:
Customer scenarios infer how customers use products and services, what types of customers are using them, and what their concerns, wishes and purposes are. This scenario speculation based on customer insight goes further and integrates the understanding of customers into a set of unique and specific images. By describing specific scenarios, scenario speculation about customers can show customers' insights concretely and vividly.
Future scenario speculation, to put it bluntly, is to speculate on the future, assume what changes will happen in the future, and then design and test the business model for each change. This method aims at business innovation and helps the company to better cope with future development.
The business model is designed and implemented in a specific environment. It is suggested that the business environment be roughly divided into four main domain categories:
Market problems. From the perspective of customers and products or services provided to customers, find the key factors to promote and change the market.
Market segmentation. Discover major market segments, describe their attractiveness and discover new market segments.
Needs and requirements. List market demand and analyze the current service level of market demand.
Switching cost. Describe the factors related to customers' dependence on competitors.
Income attraction. Find out the factors related to income attractiveness and pricing power.
Competitors. Discover current competitors and their comparative advantages.
A newcomer to the industry. Find new competitors in emerging industries and judge whether they compete with you in a business model different from yours.
Alternative products and services. Describe the potential substitutes for your products and services, including those from other markets and industries.
Suppliers and other value chain participants. In your company's market, describe the current key value chain participants and find new participants.
Stakeholder. Determine which participants may influence your company and business model.
Technology trends. Identify technology trends that may threaten, change or improve the company's business model.
Trend of regulatory laws and regulations. Describe the laws and regulations that affect your business model and their changing trends.
Social and cultural trends. Discover major social trends that may affect your business style.
Socio-economic trends. Summarize the main socio-economic trends related to your business model.
Global market situation. Summarize the overall situation of the current global market from a macroeconomic perspective.
Capital market. Describe the capital market closely related to your capital demand.
Commodities and other resources. Pay attention to the current price and future trend of the resources needed in your business model.
Economic base. Describe the economic basis in your business environment.
Just like the annual physical examination, regular evaluation of business model is an important management tool, which can evaluate the "health" degree of an institution in the industry and make some corresponding adjustments in time. This kind of health check can be the basis of continuous improvement and optimization of business model.
The book Blue Ocean Strategy can be read.
Meet the market and meet the neglected market demand.
Put it on the market and bring new technologies, products and services to the market.
Improve the market and improve, subvert or change the existing market through a better business model.
Create a market and build a brand-new market.
Prepare for a successful business model design project.
Activities: Determine project objectives, test preliminary business ideas, planning, and component design teams.
Key: suitable teammates, experience and knowledge.
Risk: Overestimate the value of the original idea.
Study and analyze the elements needed for business model.
Activities: environmental analysis, potential customer research, interviews with industry experts, past practice (failure cases) research, and idea collection.
Key: A deep understanding of the potential target market goes beyond the traditional definition of the target market.
Risk: excessive research (research is out of touch with the goal), influenced by pre-concepts, and the research results are not objective.
Establish and test feasible business model options and choose the best one.
Activities: brainstorming, prototyping, testing and selection.
Key points: the ability to design with employees of different departments, see the essence through the current situation, invest time and explore various business models.
Risk: underestimate or suppress bold ideas and fall in love with an idea too quickly.
Implement business model prototype in real environment.
Activities: communication and participation, implementation.
Key points: the best project management, the ability and willingness to quickly adjust the business model, and the balance between the old and new models.
Risk: enthusiasm is reduced and weakened.
Combine market feedback to adjust and modify the business model.
Activities: Analyze the environment, constantly evaluate your business model, think about your business model from another angle, adjust your business model, and deal with the synergy and conflict between models in line with the company's overall strategy.
Key: long-term, proactive and business model management.
Risk: Being a victim of success, being content with the status quo and failing to adjust in time.
Management team
Brief introduction of management team
Why are we a successful team?
business model
Vision, mission and value
How the business model works.
value proposition
Target customer base
sales planning
Core resources and key business
financial analysis
Gain-loss equivalent analysis
Analysis and forecast of sales situation
capital expenditure
production cost
Financing requirements
external environment
Macro-economic situation
Market analysis and main trends
Opponent analysis
Competitive advantage of business model
Implementation strategy map
project
milestone
circuit diagram
Risk analysis
Restrictive factors and obstacles
Key success factors
Specific risks and measures
abstract