Digital business model Unit 1 for manaegrs
MortezaYazdani7
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Sep 30, 2024
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About This Presentation
Supply-chain management is the integration of business processes from end user through original suppliers, that provide products, services, and information that add value for customers.
Supply-chain management connects a company’s supply side with its demand side.
It opens up supplier relationshi...
Slide Content
1Digital Business Models2023-2024 [email protected] [email protected]
Digital Business
Models
Alejandro de Pablo & Fernando Soria
Digital Business
Models
Alejandro de Pablo & Fernando Soria
2Digital Business Models2023-2024 [email protected] [email protected]
Digital Business Models
SubjectProgram
00. Subject Introduction. Week 1
01. What is a business Model?. Weeks1 & 2
02. Special Features of Digital Business Models . Innovation of Business Models in the Digital Domain. Weeks 3,4& 5
03. Innovation of Business Models in the Digital Domain. Weeks 5, 6 & 7
04. Main models. Analysis by sectors. Weeks 8,9& 10
05. The Collaborative Economy. Weeks 11& 12
06. The Business Models of the Future. Weeks12 & 13
Health check. Week 13
Teamworksassignment presentations. Weeks14 & 15
Digital Business Models
SubjectProgram
00. Subject Introduction. Week 1
01. What is a business Model?. Weeks1 & 2
02. Special Features of Digital Business Models . Innovation of Business Models in the Digital Domain. Weeks 3,4& 5
03. Innovation of Business Models in the Digital Domain. Weeks 5, 6 & 7
04. Main models. Analysis by sectors. Weeks 8,9& 10
05. The Collaborative Economy. Weeks 11& 12
06. The Business Models of the Future. Weeks12 & 13
Health check. Week 13
Teamworksassignment presentations. Weeks14 & 15
3Digital Business Models2023-2024 [email protected] [email protected]
Digital Business Models
SubjectProgram
00. Subject Introduction. Week 1
01. What is a business Model?. Weeks1 & 2
02. Special Features of Digital Business Models . Innovation of Business Models in the Digital Domain. Weeks 3,4& 5
03. Innovation of Business Models in the Digital Domain. Weeks 5, 6 & 7
04. Main models. Analysis by sectors. Weeks 8,9& 10
05. The Collaborative Economy. Weeks 11& 12
06. The Business Models of the Future. Weeks12 & 13
Health check. Week 13
Teamworksassignment presentations. Weeks14 & 15
Digital Business Models
SubjectProgram
00. Subject Introduction. Week 1
01. What is a business Model?. Weeks1 & 2
02. Special Features of Digital Business Models . Innovation of Business Models in the Digital Domain. Weeks 3,4& 5
03. Innovation of Business Models in the Digital Domain. Weeks 5, 6 & 7
04. Main models. Analysis by sectors. Weeks 8,9& 10
05. The Collaborative Economy. Weeks 11& 12
06. The Business Models of the Future. Weeks12 & 13
Health check. Week 13
Teamworksassignment presentations. Weeks14 & 15
4Digital Business Models2023-2024 [email protected] [email protected]
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
5Digital Business Models2023-2024 [email protected] [email protected]
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
6Digital Business Models2023-2024 [email protected] [email protected]
A business model describes the logic of how
the organization creates, delivers and
captures value.
A business model describes how a company
intends to make money.
Basic Definition
What is a business Model?
A business model describes the logic of how
the organization creates, delivers and
captures value.
A business model describes how a company
intends to make money.
Basic Definition
What is a business Model?
7Digital Business Models2023-2024 [email protected] [email protected]
What is a business Model?
Basic Definition
A business model is "Show me the
money / show me the money".
It is a simple expression of the
Company's strategy on how to make
money, without going into too many
details
What is a business Model?
Basic Definition
A business model is "Show me the
money / show me the money".
It is a simple expression of the
Company's strategy on how to make
money, without going into too many
details
8Digital Business Models2023-2024 [email protected] [email protected]
A business model IS NOTabusiness plan
• A business plan is a document
that describes how a project can
be implemented.
• A business plan usually aims to
sell the projectbecause "you can
not have financing without a
business plan"
What is a business Model?
A business model IS NOTabusiness plan
• A business plan is a document
that describes how a project can
be implemented.
• A business plan usually aims to
sell the projectbecause "you can
not have financing without a
business plan"
What is a business Model?
9Digital Business Models2023-2024 [email protected] [email protected]
What does a business plan usually incorporate?
What is a business Model?
What does a business plan usually incorporate?
What is a business Model?
10Digital Business Models2023-2024 [email protected] [email protected]
A business plan usually includes a description of ...
•The team
•The business model
•A financial analysis (for example, financial spreadsheets)
•An analysis of the business environment (for example, market,
competitors and competitive advantage analysis)
•A roadmap of how this plan will be implemented (eg, operation plan,
milestones)
•A risk analysis (for example, SWOT, critical success factors ..)
Whatisa businessModel?
A business model IS NOT a business plan
A business plan usually includes a description of ...
•The team
•The business model
•A financial analysis (for example, financial spreadsheets)
•An analysis of the business environment (for example, market,
competitors and competitive advantage analysis)
•A roadmap of how this plan will be implemented (eg, operation plan,
milestones)
•A risk analysis (for example, SWOT, critical success factors ..)
Whatisa businessModel?
A business model IS NOT a business plan
11Digital Business Models2023-2024 [email protected] [email protected]
The strategy is the path for an action plan and
the allocation of the resources necessary to carry
out goals.
Whatisa businessModel?
A business model IS NOT a business plan
The strategy is the path for an action plan and
the allocation of the resources necessary to carry
out goals.
Whatisa businessModel?
A business model IS NOT a business plan
12Digital Business Models2023-2024 [email protected] [email protected]
• The strategy is a plan to differentiate the company
and give it a competitive advantage
• "Competitive strategy is about being different, it
means choosing deliberately a different set of activities
to offer a unique mix of value"? So decisions can only
be defined as strategic if they consciously involve
doing something "different" from competitors and if
that difference results in a sustainable advantage (For
example, making existing methods more efficient
("operational efficiency") are not strategic since they
can be easily copied by others)
Whatisa businessModel?
A business model IS NOT a business plan
• The strategy is a plan to differentiate the company
and give it a competitive advantage
• "Competitive strategy is about being different, it
means choosing deliberately a different set of activities
to offer a unique mix of value"? So decisions can only
be defined as strategic if they consciously involve
doing something "different" from competitors and if
that difference results in a sustainable advantage (For
example, making existing methods more efficient
("operational efficiency") are not strategic since they
can be easily copied by others)
Whatisa businessModel?
A business model IS NOT a business plan
13Digital Business Models2023-2024 [email protected] [email protected]
... describes what makes a company unique
Looking from the value propositions to the cost
structure
What is a business Model?
... describes what makes a company unique
Looking from the value propositions to the cost
structure
What is a business Model?
14Digital Business Models2023-2024 [email protected] [email protected]
Cost Value
A business model is an Ecosystem
Explanation beyond the key elements
What is a business Model?
Cost Value
A business model is an Ecosystem
Explanation beyond the key elements
What is a business Model?
15Digital Business Models2023-2024 [email protected] [email protected]
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
16Digital Business Models2023-2024 [email protected] [email protected]
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
What is a business Model?
17Digital Business Models2023-2024 [email protected] [email protected]
Traditional business models: trying to explainsuccess with profit models
Time
Profit
0
Profit zone
What is a business Model?
1. Customer solutions -
Invest to know the
customer, create a
solution, develop the
relationship. E.g. GE
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Traditional business models: trying to explainsuccess with profit models
Time
Profit
0
Profit zone
What is a business Model?
1. Customer solutions -
Invest to know the
customer, create a
solution, develop the
relationship. E.g. GE
Adrian Slywotzky and David Morrison, The profit Zone, 1998
18Digital Business Models2023-2024 [email protected] [email protected]
2. Product pyramid At the base are the products and services that are low price and
high volume; Products and services of first line High price and low volume Air France
Group
Profit
Profit zone
What is a business Model?
Price
Volume
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
2. Product pyramid At the base are the products and services that are low price and
high volume; Products and services of first line High price and low volume Air France
Group
Profit
Profit zone
What is a business Model?
Price
Volume
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
19Digital Business Models2023-2024 [email protected] [email protected]
3. Multi-Component -Several of the components represent a disproportionate
share of the benefit -eg.Business seminars in Hotels, advertising (Google,?
Yahoo,? Facebook)
Basic
activity
Othercomponents
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
3. Multi-Component -Several of the components represent a disproportionate
share of the benefit -eg.Business seminars in Hotels, advertising (Google,?
Yahoo,? Facebook)
Basic
activity
Othercomponents
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
20Digital Business Models2023-2024 [email protected] [email protected]
4. Control panel Multiple vendors that communicate with multiple buyers. The more
buyers and sellers join the great The organization is based on itself EBay, Alibaba,
Amazon, Monster, SelogerOr the opposite: disintermediation (Dell) Seller's
buyers
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
4. Control panel Multiple vendors that communicate with multiple buyers. The more
buyers and sellers join the great The organization is based on itself EBay, Alibaba,
Amazon, Monster, SelogerOr the opposite: disintermediation (Dell) Seller's
buyers
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
21Digital Business Models2023-2024 [email protected] [email protected]
5. Time Gain -Take advantage of the uniqueness, the profit margins erode as the
competition seeks to imitate. Companies with time gains must take the lead and
maintain a "two year" advantage Their competitors E.g. Intel, Microsoft Unit
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
$/Unit
Price
Time
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
5. Time Gain -Take advantage of the uniqueness, the profit margins erode as the
competition seeks to imitate. Companies with time gains must take the lead and
maintain a "two year" advantage Their competitors E.g. Intel, Microsoft Unit
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
$/Unit
Price
Time
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
22Digital Business Models2023-2024 [email protected] [email protected]
6. Block Buster benefits The income made is so powerful and fast that in a quick
blow the model pays for development and commercialization E.g. movies, books,
pharma,teaching
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Project type
$/Project
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
6. Block Buster benefits The income made is so powerful and fast that in a quick
blow the model pays for development and commercialization E.g. movies, books,
pharma,teaching
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Project type
$/Project
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
23Digital Business Models2023-2024 [email protected] [email protected]
7. Multiplier Strong customer brand Disney, Google
Different offers
Keyasset
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
7. Multiplier Strong customer brand Disney, Google
Different offers
Keyasset
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
24Digital Business Models2023-2024 [email protected] [email protected]
Basic
activity
8. Business Profit Hierarchical design with multiple subsidiaries to maintain
closeness to the customer, Biotechnologies, Google Small equipment
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Basic
activity
8. Business Profit Hierarchical design with multiple subsidiaries to maintain
closeness to the customer, Biotechnologies, Google Small equipment
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
25Digital Business Models2023-2024 [email protected] [email protected]
9. The specialization. Specialist is several times more profitable than the generalist.
Characterized by lower cost, higher quality, better reputation, shorter and better
sales cycles E.g. Deposit from home, Return
Specialists
Generalists
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
9. The specialization. Specialist is several times more profitable than the generalist.
Characterized by lower cost, higher quality, better reputation, shorter and better
sales cycles E.g. Deposit from home, Return
Specialists
Generalists
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
26Digital Business Models2023-2024 [email protected] [email protected]
10. Install the base The sales or initial benefits of the product are scarce and
benefits are obtained in the follow-up products and services Printers HP and
Gillette Razors, Ryanair Margin
Complementary
products
Basic
product
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
10. Install the base The sales or initial benefits of the product are scarce and
benefits are obtained in the follow-up products and services Printers HP and
Gillette Razors, Ryanair Margin
Complementary
products
Basic
product
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
27Digital Business Models2023-2024 [email protected] [email protected]
11. DefactoStandard -The more players buy into the system, the more valuable the
network Microsoft, Oracle, Skype, Linkedin, Spotify,
Facebook
Margin
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
11. DefactoStandard -The more players buy into the system, the more valuable the
network Microsoft, Oracle, Skype, Linkedin, Spotify,
Margin
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
28Digital Business Models2023-2024 [email protected] [email protected]
12. Brand The Company spends an important marketing investment to raise
awareness and is reinforced by the customer experience. You know Brand is working
when a consumer says, "I'm not going to change because I trust AT & T. Google
Brand price
Average market price
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
12. Brand The Company spends an important marketing investment to raise
awareness and is reinforced by the customer experience. You know Brand is working
when a consumer says, "I'm not going to change because I trust AT & T. Google
Brand price
Average market price
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
29Digital Business Models2023-2024 [email protected] [email protected]
13. Specialty Specialized companies enjoy a higher premium for their products and
services until they "imitate” E.g. Merck, 3M, Photoshop
Marge
Nowadays
5years ago
Common
Leading
Leading
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
13. Specialty Specialized companies enjoy a higher premium for their products and
services until they "imitate” E.g. Merck, 3M, Photoshop
Marge
Nowadays
5years ago
Common
Leading
Leading
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
30Digital Business Models2023-2024 [email protected] [email protected]
Localmarket share
14. Local Leadership Many businesses and their economies are totally local. The
risk occurs when these companies do not recognize that they are a local business
model Wal-Mart
Localreturn
0
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
Localmarket share
14. Local Leadership Many businesses and their economies are totally local. The
risk occurs when these companies do not recognize that they are a local business
model Wal-Mart
Localreturn
0
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
31Digital Business Models2023-2024 [email protected] [email protected]
Transactionsize
15. Step-scale transactions go up, but the cost to provide the transaction does not
increase so quickly Investment banking, real estate, transportation Return of
transactions
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Transactionsize
15. Step-scale transactions go up, but the cost to provide the transaction does not
increase so quickly Investment banking, real estate, transportation Return of
transactions
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
32Digital Business Models2023-2024 [email protected] [email protected]
16. Value chain
The specific activities go through a chain of Offer value Eg.Software, Intel
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
16. Value chain
The specific activities go through a chain of Offer value Eg.Software, Intel
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
33Digital Business Models2023-2024 [email protected] [email protected]
Capacity /Occupancy
17. Benefit of the cycle. Industries characterized by a different and powerful cycle.
The company can not control the cycle, but works to maximize its position within the
gripping cycles. As the capacity tightens the companies, the increase in the prices of
lead, as the capacity loosens, its price of delay decreases. Dow Chemical, Toyota
Return per unit produced
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Capacity /Occupancy
17. Benefit of the cycle. Industries characterized by a different and powerful cycle.
The company can not control the cycle, but works to maximize its position within the
gripping cycles. As the capacity tightens the companies, the increase in the prices of
lead, as the capacity loosens, its price of delay decreases. Dow Chemical, Toyota
Return per unit produced
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
34Digital Business Models2023-2024 [email protected] [email protected]
18. Profit after sale The profit of the company does not come directly from the sale
of your product, but the financing after the sale or the services of The product
General Electric, banking
After-sales offers
Basic offer
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
18. Profit after sale The profit of the company does not come directly from the sale
of your product, but the financing after the sale or the services of The product
General Electric, banking
After-sales offers
Basic offer
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
35Digital Business Models2023-2024 [email protected] [email protected]
19. Benefit of new products As new products are introduced, profit margins are
high and growth is rapid. As the product matures the profiitFall of the margins
Time
Diffusion
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
19. Benefit of new products As new products are introduced, profit margins are
high and growth is rapid. As the product matures the profiitFall of the margins
Time
Diffusion
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
36Digital Business Models2023-2024 [email protected] [email protected]
Relativemarket share
20. Relative Benefit of Participation in the Market Companies with high market
share tend to be more profitable. Large companies have price advantages due to
manufacturing experiences and volume economies, such as purchasing power and
economies of scale
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Relativemarket share
20. Relative Benefit of Participation in the Market Companies with high market
share tend to be more profitable. Large companies have price advantages due to
manufacturing experiences and volume economies, such as purchasing power and
economies of scale
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
37Digital Business Models2023-2024 [email protected] [email protected]
21. Benefit of the experience curve The experience reduces the transaction
cost
Cumulated experience
Unit cost
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
21. Benefit of the experience curve The experience reduces the transaction
cost
Cumulated experience
Unit cost
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Profit zone
Adrian Slywotzky and David Morrison, The profit Zone, 1998
38Digital Business Models2023-2024 [email protected] [email protected]
22. Low Cost Business Design • The company strives to reduce the cost per
unit through "Accumulated Experience" Eg.Southwest Air, Dell, Internet as
a channel Distribution (fnac.com, ...)
Low cost
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
22. Low Cost Business Design • The company strives to reduce the cost per
unit through "Accumulated Experience" Eg.Southwest Air, Dell, Internet as
a channel Distribution (fnac.com, ...)
Low cost
What is a business Model?
Traditional business models: trying to explainsuccess with profit models
Adrian Slywotzky and David Morrison, The profit Zone, 1998
Profit zone
39Digital Business Models2023-2024 [email protected] [email protected]
http://www.expansion.com/directivos/2018/11/25/5bfae44922601dc9478b45a7.html
What is a business Model?
http://www.expansion.com/directivos/2018/11/25/5bfae44922601dc9478b45a7.html
What is a business Model?
40Digital Business Models2023-2024 [email protected] [email protected]
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
41Digital Business Models2023-2024 [email protected] [email protected]
BUSINESS MODELS BASED ON “DIGITAL”
BUSINESS MODELS BASED ON “DIGITAL”
42Digital Business Models2023-2024 [email protected] [email protected]
Why study Internet-based models?
Business
Models
Internet
A business model is an ecosystem
What is a business Model?
Why study Internet-based models?
Business
Models
Internet
A business model is an ecosystem
What is a business Model?
43Digital Business Models2023-2024 [email protected] [email protected]
Two reasons
The technological revolution exponentially increased the number of
profiles of business models
The marginal cost of digital information closer to nothing (= 0), Long tail
allows greater customer segmentation
A better asset rotation can allow new business to emerge generating more
margin.
After 30 years, we are better at understanding complex business models
What is a business Model?
A business model is an ecosystem
Two reasons
The technological revolution exponentially increased the number of
profiles of business models
The marginal cost of digital information closer to nothing (= 0), Long tail
allows greater customer segmentation
A better asset rotation can allow new business to emerge generating more
margin.
After 30 years, we are better at understanding complex business models
What is a business Model?
A business model is an ecosystem
44Digital Business Models2023-2024 [email protected] [email protected]
https://www.ted.com/talks/ray_kurzweil_on_how_technology_will_transform_us?language=es#t-48427
Ray Kurzweil vídeo
sobre TED, 2005 La
aceleración de la
tecnología
14'00-19'10
(I) The technological revolution (IT, Internet…)
What is a business Model?
https://www.ted.com/talks/ray_kurzweil_on_how_technology_will_transform_us?language=es#t-48427
Ray Kurzweil vídeo
sobre TED, 2005 La
aceleración de la
tecnología
14'00-19'10
(I) The technological revolution (IT, Internet…)
What is a business Model?
45Digital Business Models2023-2024 [email protected] [email protected]
•The great power of Silicon Valley's business models
is the fact that a small number of employees and
contracted partners can handle a huge and growing
volume of business:
• Duplication of transaction volume can be achieved
with relatively modest investments
* Software and servers do the heavy lifting
eBayHeadquarters,SanJoseCalifornia
What is a business Model?
•The great power of Silicon Valley's business models
is the fact that a small number of employees and
contracted partners can handle a huge and growing
volume of business:
• Duplication of transaction volume can be achieved
with relatively modest investments
* Software and servers do the heavy lifting
eBayHeadquarters,SanJoseCalifornia
What is a business Model?
46Digital Business Models2023-2024 [email protected] [email protected]
Sells successful products, but also hard-
to-find product niches (online bookstores offer
access to a wider variety of products)
The personalization of the client has allowed to sell a
large volume of products in small numbers
Amazon warehouse, somewhere
Sells successful products, but also hard-
to-find product niches (online bookstores offer
access to a wider variety of products)
The personalization of the client has allowed to sell a
large volume of products in small numbers
Amazon warehouse, somewhere
47Digital Business Models2023-2024 [email protected] [email protected]
Better asset rotation facilitates new business with low margin
4
7
Formula : Return on Capital Employed (ROCE)
ROCE = Net Income (R) / Equity (K)
•The technological revolution increases the productivity of
capital, in parallel to the fall of immobilized capital
What is a business Model?
Better asset rotation facilitates new business with low margin
4
7
Formula : Return on Capital Employed (ROCE)
ROCE = Net Income (R) / Equity (K)
•The technological revolution increases the productivity of
capital, in parallel to the fall of immobilized capital
What is a business Model?
48Digital Business Models2023-2024 [email protected] [email protected]
Can you design new business models with the same performance as the most
profitable activities? Logan, the new low-cost vehicle, was designed to be sold
at € 5,000 (ultimately € 8,000 in France)
What is a business Model?
Better asset rotation facilitates new business with low margin
Can you design new business models with the same performance as the most
profitable activities? Logan, the new low-cost vehicle, was designed to be sold
at € 5,000 (ultimately € 8,000 in France)
What is a business Model?
Better asset rotation facilitates new business with low margin
49Digital Business Models2023-2024 [email protected] [email protected]
• Developing countries are inventing
new business models in regions with
very low purchasing power where
populations are traditionally excluded
from any economic business model.
E.g. Tata vehicle costs € 2,500 even
cheaper than Logan
• 4 billion people live with less
than 1,500 US $ per year
C. K. Prahalad, The Fortune at the Botton of
the Pyramid, 2006
What is a business Model?
Better asset rotation facilitates new business with low margin
• Developing countries are inventing
new business models in regions with
very low purchasing power where
populations are traditionally excluded
from any economic business model.
E.g. Tata vehicle costs € 2,500 even
cheaper than Logan
• 4 billion people live with less
than 1,500 US $ per year
C. K. Prahalad, The Fortune at the Botton of
the Pyramid, 2006
What is a business Model?
Better asset rotation facilitates new business with low margin
50Digital Business Models2023-2024 [email protected] [email protected]
Mobile banking case
Half of the population is not banked:
People without official financial service to save or borrow
Unofficial loan rates vary between 50% and 400% pa, microfinance rates are 20-40%
Morocco loses one day a month topay bills
Allows massive tax evasion from States with low budgets
Increased cost and complexity for companies to pay their employees. Mobile banking offer is emerging in developing countries .
E.g. Half public civil service in Kenya is paid by mobilebanking
Pologne
Royaume-Uni
France
Etats-Unis
Canada
B e l g i q u
e
otswan
a
Portuga
lIrlande Moy.UE
Afrique du Sud
Jamaïque
Autriche Espagne Finlande
Danemark
Allemagne Pays-Bas
Suède
R u ss ie
R o u m a n i e
C h i l i
A l g é r i e
Tunisie
Colombie
M o y . A f r i q u e
B
M e x i q u e B r é s i
M a ro c
Guatemala
l
Guyane
N i c a r a g u a
A r m é n i e C h i n e
P a k i s t a n
Namibie
Sénégal
Egypte
Côte d'Ivoire Vietnam
Kirghizstan Kenya Lesotho
Tanzanie Ouganda
I nd e
D jib o u t
i
50%
40%
30%
20%
10%
0%
60%
70%
80%
90%
100%
110%
120%
0% 10% 20% 30% 80% 90% 100%40% 50% 60% 70%
M
o
b
ile
p
e
n
e
t
r
ation
2008
LinkedinWebsite
Banked population2008
What is a business Model?
Better asset rotation facilitates new business with low margin
Mobile banking case
Half of the population is not banked:
People without official financial service to save or borrow
Unofficial loan rates vary between 50% and 400% pa, microfinance rates are 20-40%
Morocco loses one day a month topay bills
Allows massive tax evasion from States with low budgets
Increased cost and complexity for companies to pay their employees. Mobile banking offer is emerging in developing countries .
E.g. Half public civil service in Kenya is paid by mobilebanking
Pologne
Royaume-Uni
France
Etats-Unis
Canada
B e l g i q u
e
otswan
a
Portuga
lIrlande Moy.UE
Afrique du Sud
Jamaïque
Autriche Espagne Finlande
Danemark
Allemagne Pays-Bas
Suède
R u ss ie
R o u m a n i e
C h i l i
A l g é r i e
Tunisie
Colombie
M o y . A f r i q u e
B
M e x i q u e B r é s i
M a ro c
Guatemala
l
Guyane
N i c a r a g u a
A r m é n i e C h i n e
P a k i s t a n
Namibie
Sénégal
Egypte
Côte d'Ivoire Vietnam
Kirghizstan Kenya Lesotho
Tanzanie Ouganda
I nd e
D jib o u t
i
50%
40%
30%
20%
10%
0%
60%
70%
80%
90%
100%
110%
120%
0% 10% 20% 30% 80% 90% 100%40% 50% 60% 70%
M
o
b
ile
p
e
n
e
t
r
ation
2008
LinkedinWebsite
Banked population2008
What is a business Model?
Better asset rotation facilitates new business with low margin
51Digital Business Models2023-2024 [email protected] [email protected]
Current 3 trends
1) Strategy based on the pyramid: create a business
model based on people with very low purchasing
power
2) Blue ocean strategy: look for a new ocean that
rethinks differentiation and low cost and goes beyond
the limits of the industry
3) Cloning strategy: clone successful websites, and
replicate them in other countries
What is a business Model?
Current 3 trends
1) Strategy based on the pyramid: create a business
model based on people with very low purchasing
power
2) Blue ocean strategy: look for a new ocean that
rethinks differentiation and low cost and goes beyond
the limits of the industry
3) Cloning strategy: clone successful websites, and
replicate them in other countries
What is a business Model?
52Digital Business Models2023-2024 [email protected] [email protected]
B) NEW Digital business Model: ideas
What is a business Model?
B) NEW Digital business Model: ideas
What is a business Model?
53Digital Business Models2023-2024 [email protected] [email protected]
What is a business Model?
B) NEW Digital business Model: Looking to Asia
What is a business Model?
B) NEW Digital business Model: Looking to Asia
54Digital Business Models2023-2024 [email protected] [email protected]
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
02. The Value Proposal
03. Technology as a disruptive lever of business models
04. Business Model Canvas applied to digital business models
UNIT 1
Whatisa Business model?
01. Main elements of a digital business model
55Digital Business Models2023-2024 [email protected] [email protected]
56Digital Business Models2023-2024 [email protected] [email protected]
Different tools to design and validate your Digital BM
What is a business Model?
Different tools to design and validate your Digital BM
What is a business Model?
57Digital Business Models2023-2024 [email protected] [email protected]
Cost Revenue
A business model is an Ecosystem
Explanation beyond the key elements
What is a business Model?
Cost Revenue
A business model is an Ecosystem
Explanation beyond the key elements
What is a business Model?
58Digital Business Models2023-2024 [email protected] [email protected]
ABC method:
Adquisition
Behaviour
Conversion
What is a business Model?
Different tools to design and validate your Digital BM
ABC method:
Adquisition
Behaviour
Conversion
What is a business Model?
Different tools to design and validate your Digital BM
59Digital Business Models2023-2024 [email protected] [email protected]
Customer development by Steve Blank
What is a business Model?
Different tools to design and validate your Digital BM
Customer development by Steve Blank
What is a business Model?
Different tools to design and validate your Digital BM
60Digital Business Models2023-2024 [email protected] [email protected]
Lean Start up by Eric Ries
What is a business Model?
Different tools to design and validate your Digital BM
Lean Start up by Eric Ries
What is a business Model?
Different tools to design and validate your Digital BM
61Digital Business Models2023-2024 [email protected] [email protected]
Lean Canvas by Ash Maury
What is a business Model?
Different tools to design and validate your Digital BM
Lean Canvas by Ash Maury
What is a business Model?
Different tools to design and validate your Digital BM
62Digital Business Models2023-2024 [email protected] [email protected]
Lean Canvas by Ash Maury: differences vs Canvas
What is a business Model?
Different tools to design and validate your Digital BM
Lean Canvas by Ash Maury: differences vs Canvas
What is a business Model?
Different tools to design and validate your Digital BM
63Digital Business Models2023-2024 [email protected] [email protected]
24 steps by Bill Aulet
What is a business Model?
Different tools to design and validate your Digital BM
24 steps by Bill Aulet
What is a business Model?
Different tools to design and validate your Digital BM
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