BUSINESS PLAN MODELLINGBased on Alexander Osterwalders BM facilitation methodology

The Marshmallow ChallengeMATERIALS:20 Spaguetti sticksOne yard tapeOne yard stringOne marshmallowTOM WUJEC, http://www.marshmallowchallenge.com/Welcome.html

The Marshmallow Challenge - RulesIn teams of four, build the tallest freestanding structure.Use only the given kit of materialsYou have only 18 minutesYou can break uo the spaguetti, string or tapeDo not open the bag until the start sign is givenStop when announced.TOM WUJEC, http://www.marshmallowchallenge.com/Welcome.html

THE JOB TO BE DONE (JTBD)Which is the job to be done?

Customer Value Proposition = JTBD + Offering

Where is the white spot?

Key entry moments: Opportunity windows

The Modelling Process and PrototypingFrank Gehry

CUSTOMER SEGMENTSAn organization serves one or several customer segments.

For whom are we creating value?Mass market, Niche market, Segmented, Diversified, Multisided platform

Who are our most important customers?

Value PropositionsSeeks to solve customer problems and satisfy its needs with value propositions.

What value do we deliver to the customer?

Which ones of our customers problems are we helping to solve?

What bundles of products and services are we offering to each customer segment?

Which customer needs are we satisfyng?

Value PropositionsCHARACTERISTICS:

NewnessPerformanceCustomizationGetting the job doneDesignBrand/statusPriceCost reductionRisk reductionAccesibilityConvenience/ usability

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

Through which channels do our customer segments want to be reached?

How are we reaching them now?

CHANNELSHow are our channels integrated?

Which ones work best?

Which ones are most cost-efficent?

How are we integrating them with customer routines?

CHANNELSChannel PhasesAwarenessInformation searchingEvaluation (value proposition)PurchaseDelivery (value proposition)After sales (support)Re-evaluationDisposal

CUSTOMER RELATIONSHIPSAre established and maintained with each customer segment.

What type of relationship does each of our customer segments expect us to establish and maintain with them?

CUSTOMER RELATIONSHIPSWhich ones have we established?

How are they integrated with the rest of our business model?

How costly are they?

CUSTOMER RELATIONSHIPSPersonal assistanceDedicated personal assistanceSelf serviceAutomated servicesCommunitiesCo-creation

REVENUE STREAMSResult from value propositions sucessfully offered to customers

For what value are our customers really willing to pay?

For what do they currently pay?

REVENUE STREAMSHow are they currently paying?

How would they prefer to pay?

How much does each revenue stream contribute to overall revenues?

REVENUE STREAMSExamples:Asset saleUsage feesSubscription feeLending/renting/leasingLicensingBrokerage feesAdvertising

REVENUE STREAMSFixed pricingList priceProduct feature dependentCustomer segment dependentVolume dependentDinamic pricingNegotiations (bargaining)Yield managementReal time market

KEY RESOURCESAre the assets required to offer and deliver the previous elements.

What key resources does our value proposition require?,Our distribution channels?,Customer relationships?,Revenue Streams?

KEY RESOURCESType of resources:PhysicalIntellectual (brand patents, copyright, data)HumanFinancial

KEY ACTIVITIESYou deliver those elements by performing key activities.

What key activities do our value propositions require?,Our distribution channels?Customer relationships?,Revenue streams?

KEY ACTIVITIESCategories:

ProductionProblem solvingPlatform/Network

KEY PARTNERSHIPSSome activities are outsources and some resources are required outside the enterprise.

Who are our key partners?Our key suppliers?Which key resources are we acquiring from partners?Which key activities do partners perform?

KEY PARTNERSHIPSMotivations for partnerships:

Optimization and economyReduction of risk and uncertaintyAcquisition of particular resources and activities.

COST STRUCTUREThe business model elements result in the cost structure.

What are the most important costs inherent in our business model?Which key resources are most expensive?Which key activities are most expensive?

COST STRUCTUREIs your business more cost driven?

Leanest cost structure Low price value propositionMaximum automationExtensive outsourcing

COST STRUCTUREIs your business more value driven?

Focused on value creationPremium value proposition

COST STRUCTUREIt can be based on:Fixed cost (salaries + rents + utilities)Variable costsEconomies of scaleEconomies of scope

Revising the Value PropositionWhat you caneliminate?What you canreduce?What shouldI raise?What new valueCan I create?

RED VS BLUE OCEANS(KIM/MAUBORGNE)RED OCEANSCompete in existing marketsBeat the competitionExplore existing demandMake the value/cost trade-offAlign with differentiation or lower cost

THE LONG TAIL CONCEPTChris AndersonMass markets million of niches.

Web 4.0 niche products and markets

"infinite shelf-space effect - new distribution mechanisms.

Digital downloading and peer-to-peer marketshttp://longtail.typepad.com/

The LONG TAIL

The tail is becomming longer, accesible and more profitable!

DESIGN THINKINGAnalytical ThinkingDesign ThinkingIntuitive Thinking

BM PROTOTYPING

BM PROTOTYPING AND SHIFTSNapkin SketchCanvasBusiness CaseField testROADMAPS VS BUSINESS PLANS

ProcessMobilize: setting the stage, moving peopleUnderstand: immersionDesign: inquiry, generate and testImplement: executionManage: adapt and modify, co-create

STORY TELLING of your business modelOne minute!

Determinants of National Competitive AdvantageChanceGovernment Influence

THE 5 FORCES OF PORTER

INDUSTRY ANALYSIS ALONEDr. Mark Buchanan: Industry leapsNassim Nicholas Taleb: The Black Swans, The fourth quadrant

PEST ANALYSISPOLITICAL-LEGALECONOMICSOCIO-CULTURAL (+HOFSTEDE)TECHNOLOGICAL

BM ENVIRONMENTKEY TRENDS (foresight)

MARKET FORCES (market analysis)

MACROECONOMIC FORCES (macroeconomic environment)

INDUSTRY FORCES (competitive analysis)

KEY TRENDS (foresight)TechnologyRegulatorySocioculturalSocioeconomic

KEY TRENDS (UP)Describes regulations and regulatory trends that influence your business model:

KEY TRENDS (UP)Which regulatory trends influence your market?

What rules may affect your business model?

Which regulations and taxes affect customer demand?REGULATORY

KEY TRENDS (UP)Identifies technology trends that could threaten your business model or enable it to evolve or improve:

KEY TRENDS (UP)What are the major technology trends both inside and outside your market?

Which technologies represent important opportunities or disruptive threats?

Which emerging technologies are peripheria customers adopting?TECHNOLOGY

KEY TRENDS (UP)Identifies major societal and cultural trends that may influence your business model:

KEY TRENDS (UP)Describe key societal trends. Which shifts in cultural or societal values affect your business model?

Which trends might influence buyer behavior?SOCIOCULTURAL

KEY TRENDS (UP)Outlines major socieconomic trends relevant to your business model:

KEY TRENDS (UP)What are the key demographic trends?

How would you characterize income and wealth distribution in your market?

How high are disposable incomes?

Describe spending patterns in your market (e.g. housing, healthcare, entertainment, etc.)?

What portion of the population lives in urban areas as opposed to rural settings?SOCIOECONOMIC

MARKET FORCES (market analysis)Market issuesMarket segmentsNeeds and DemandsSwitching CostsRevenue Attractiveness

MARKET FORCES (right)Identifies key issues driving and transforming your market from Customer and Offer perspectives Market Issues

MARKET FORCES (right)What are the crucial issues affecting the customer landscape?

Which shifts are underway?

Where is the market heading?MARKET ISSUES

MARKET FORCES (right)Identifies the major Market Segments, describes their attractiveness, and seeks to spot new segments.

MARKET FORCES (right)What are the most important Customer Segments?

Where is the biggest growth potential?

Which segments are declining?

Which peripheral segments deserve attention?MARKET SEGMENTS

MARKET FORCES (right)Outlines market needs and analyzes how well they are served. Needs and Demands

MARKET FORCES (right)What do customers need?

Where are the biggest unsatisfied cuestomer needs?

What do customers really want to get done?

Where is demand increasing? Declining?NEEDS AND DEMANDS

MARKET FORCES (right)Describes elements related to customers switching business to competitors. Switching Costs

MARKET FORCES (right)What binds customers to a company and its offer?

What switching costs prevent customers from defecting to competitors?

Is it easy for customers to find and pucharse similar offers?

How important is the brand?SWITCHING COSTS

MARKET FORCES (right)Identifies elements related to Revenue Attractiveness and pricing power.

MARKET FORCES (right)What are customers really willing to pay for?

Where can the largest margins be achieved?

Can customers easily find and purchase cheaper products and services?REVENUE ATTRACTIVENESS

MACROECONOMIC FORCESGlobal Market ConditionsCapital MarketsCommodities and other sourcesEconomic Infrastructure

MACROECONOMIC FORCESGlobal Market Conditions: outlines current overall conditions from a macroeconomic perspective

MACROECONOMIC FORCESIs the economy in a boom or bust phase?

Describe general market sentiment

What is the GDP growth rate

How high is the unemployment rate?GLOBAL MARKET

MACROECONOMIC FORCESDescribes current capital market conditions as they relate to your capital needs.

MACROECONOMIC FORCESWhat is the state of the capital markets?

How easy is to obtain funding in your particular market?

Is seed capital, venture capital, public funding, market capital or credit readily available?

How costly is to procure funds?CAPITAL MARKETS

MACROECONOMIC FORCESCommodities and other sources: highlights current prices and price trends for resources required for your business model.

MACROECONOMIC FORCESDescribe the current status of markets for commodities and other resources essential to your business (e.g. oil prices and labor costs).

How easy is to obtain the resources needed to execute your business model (e.g. attract prime talent)?

How costly are they?

Where are prices headed?COMMODITIES/RESOURCES

MACROECONOMIC FORCESDescribes the Economic Infrastructure of the market in which your business operates

MACROECONOMIC FORCESHow good is the (public) infrastructure in your market?How would you characterize transportation, trade, school quality, and access to suppliers and customers?How high are individual and corporate taxes?How good are public servives for organizations?How would you rate the quality of life?ECONOMIC INFRASTRUCTURE

INDUSTRY FORCES (Competitive Analysis)Competitors (incumbents)New Entrants (insurgents)Substitute products and servicesStakeholdersSuppliers and Value Chain actors

INDUSTRY FORCES (Competitive Analysis)Identifies Incumbent Competitors and their relative strenghts.

INDUSTRY FORCES (Competitive Analysis)Who are our competitors?Who are the dominant players in our particular sector?What are the competitive advantages or disadvantages?Describe their main offers.Which Customer Segments are they focusing on?What is their Cost Structure?How much influence do they exert on our Customer Segments, Revenue Streams, and margins?COMPETITORS/INCUMBENTS

INDUSTRY FORCES (Competitive Analysis)Identifies New (Entrant) Insurgent players and determines wether they compete with a business model different from yours.

INDUSTRY FORCES (Competitive Analysis)Who are the new entrants in your market?How are they different?What competotive advantages or disadvantages do they have?Which barriers must they overcome?What are their Value Propositions?Which Customer Segments are they focused on?What is their Cost Structure?To what extent do they influence your Customer Segments, Revenue Streams, and margins?ENTRANTS/INSURGENTS

INDUSTRY FORCES (Competitive Analysis)Substitute products and services: describes potential substitutes for your offers including those from other market and industries

INDUSTRY FORCES (Competitive Analysis)Which products or services could replace ours?How much do they cost compared to ours?How easy it is for customers to switch to these substitutes?What business model traditions do these substitute products stem from (e.g. high-speed trains vs airplanes, mobile phones vs cameras, Skype vs long-distance calls)?SUBSTITUTES

INDUSTRY FORCES (Competitive Analysis)Stakeholders: specifies which actors may influence your organization and business model.

INDUSTRY FORCES (Competitive Analysis)Which stakeholders might influence your business model?

How influential are Shareholders? Workers? the Government? Lobbyists?STAKEHOLDERS

INDUSTRY FORCES (Competitive Analysis)Suppliers and Value Chain actors: describes potential substitutes for your offers including those from other markets and industries.

INDUSTRY FORCES (Competitive Analysis)Who are the key players in your industry value chain?

To what extent does your business model depend on other players?

Are peripheral players emerging?

Which are most profitable?SUPPLIERS/VALUE CHAIN

Trends

WAVESPrimevilAgrarianIndustrialInformationKnowledge

MEGATENDENCIAS SOCIALESEducacin personalizada, vitalicia y universalEl mundo con un gran centro comercialVirtualidad en la vida cotidianaLa mercadotecnia personalizadaEl binomio de la vida: salud y tecnologaLa nueva percepcin de la riqueza de los recursos naturales

MEGATENDENCIAS SOCIALESEl consumidor ecolgicoLa nueva estructura demogrfica y familiarMetro Dads + Metro MomsLa sociedad multiculturalLa fragmentacin de la megalpolisLos 8 + 5 + N11 Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam, South Korea, PhilippinesEl 86% de la poblacin mundial

MEGATENDENCIAS TECNOLGICAS1. Sistemas pticos.2. Biotecnologa agrcola.3. Biotecnologa mdica.4. Clulas, tejidos y rganos artificiales.5. Computadoras de alto rendimiento.6. Inteligencia artificial.

MEGATENDENCIAS TECNOLGICAS7. Materiales inteligentes & Ingeniera de superficies.8. mems (sistemas micro-electro-mecnicos).9. Micro y nanotecnologa.10. Nuevas tecnologas energticas.11. Realidad mixta.12. Tecnologas inalmbricas.

WIKINOMICSIDEAGORASPROSUMERISMTHE GLOBAL PLANT FLOORCOLLABORATIVE MINDSPLATFORMS FOR COLLABORATION (MODULAR PRODUCTION)THE WIKI WORKPLACE

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Major Trends Driving e-business

TREND CATEGORYTRENDCustomer1. Faster Service2. Self-service3. More product choices4. Integrated SolutionsE-service5. Integrated sales and service6. Seamless support7. Flexible fulfillment and convenient service delivery8. Increased process visibilityOrganizational9. Outsourcing10. Contract Manufacturing11. Virtual Distribution

Major Trends Driving e-business

TREND CATEGORYTRENDEmployee12. Hiring the best and brightest13. Keeping talented employeesEnterprise Technology14. Integrated Entreprise Applications15. Multichannel Integration16. MiddlewareGeneral Technology17. Wireless Web Applications18. Handheld Computing and Information Appliances19. Infrastructure Convergence20. Application Service Providers

S Curves vs Dominant Designs

Tipos de InnovacinESTABLECIDOESTABLECIDONUEVONUEVOVNCULO ENTRE COMPONENTESCONFIGURACIN DE PRODUCTO Y TECNOLOGAS MODULARES

EMPATHY MAP: CUSTOMER PROFILE

What is on her/his mind?Preoccupations, worries, ideasWhat does he/she sees?Environment, friendsWhat the market offers?What does she/he says?Attitude, public appearanceWhat is telling to others?What does she/he hears?Boss, friends, media