time machine · you think nespresso’s business model is. buzz group. discuss with your seat...
TRANSCRIPT
let’s go back in time to understand business models...
Time Machine
1958
[sources: Henry Chesbrough, photo: life.com]
[sources: Henry Chesbrough, photo: xerox.com]
revenue growth of 41% compounded for the next 20 years
Time Machine
1997
’10 revenue of $29.32 billion ($8.5 billion net income)
?what%do%both%examples%have%in%common?
they focused on product innovation
alone they empower the
product through the business model1
they simply copied from competitors
they invented a new business model2
they could prove in advance that the
model would workthey had to take some
risk and experiment3
?So how does one come up with successful business models?
going beyond product
innovation
1going beyond
copyingcompetitors
2going beyond
waiting for proof
3designthinkingattitude
businessmodel
language
testingbefore
building
business model language 1
illustra(on
how much did the cost of home coffee consumption change for Swiss households over the last
couple of years?
600% to 800% more
Nespresso changed the
business model for espresso
RESULTS
one of the fastest-growing businesses in
the Nestlé group
average growth of 30% p.a. since 2000
over 3 billion CHF annual revenue with 1 product line
(3.2 bio USD)
buzzgroup
?Discuss and describe what you think Nespresso’s
business model is
buzzgroup
?discuss with your seat neighbor what a business model is and
write down your definition
Any problem can be made clearer with a pictureDan Roam, author
“”
Business Model Canvas
to describe, challenge, design, and invent business models more systematically
CUSTOMER SEGMENTS
images by JAM
VALUE PROPOSITIONS
images by JAM
CHANNELS
images by JAM
CUSTOMER RELATIONSHIPS
images by JAM
REVENUE STREAMS
images by JAM
KEY RESOURCES
images by JAM
KEY ACTIVITIES
images by JAM
KEY PARTNERS
images by JAM
COST STRUCTURE
images by JAM
images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
images by JAM
customer segments
key partners
cost structure
revenue streams
channels
customer relationships
key activities
key resources
value proposition
images by JAM
CANVAS OVERLAY
images by JAM
OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
images by JAM
CANVAS OVERLAYOFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMERSEGMENTS
REVENUE STREAMSCOST STRUCTURE
KEYACTIVITIES
KEYPARTNERS
KEYRESOURCES
building
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building
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building
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building
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building
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building
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buildingblock
buildingblock
building
block
illustration
Nespresso changed the
business model for espresso
91
?
? ?
?
?
??
?
?
92
Nespresso
machines
retail mailorder
Nespresso
.com
callcenter
Nespresso
stores
households
business
1 x machine
salesrepetitive pod sales
distribution
channels
coffeeproduction
facilites
production B2C
distribution brandmarketing
brandpatents
machine
manufacturer
production
B2C
distributionbrand
marketing
Nespresso
club
brandbrand
Nespresso
pods
buzz group
BusinessModelGeneration.com/canvas
UNDERSTANDER (interviewer) asks
questions and sketches out
interlocutors business model with
post-it notes
EXPLAINER (interviewee) answers
business model questions to help
interviewer understand his/her
core model
BusinessModelGeneration.com/canvas
Business Model Theater
but Nespresso almost failed in 1987 due to a nonperforming
business model
104
Nespresso
system
offices
joint venture with
manufacturer
machine
manufacturer
!the right business model can be the difference between success and failure for exactly the same
technology or product
!we are moving from portfolios of products to portfolios of business
models (cf Apple)
think b.models!
?what is Sony Playstation’s business model?
132
Sony Playstation
[source: art by Nintendo - provided by britishgaming.co.uk]
?what’s different in Nintendo Wii’s business model?
reduce
!
raise
"
eliminate
−
create
�
four actions framework
buzz5group
reduce
!
raise
"
eliminate
−
create
�
139
!a better business model almost always outcompetes a
better technology
Competing on Business Models
design thinkingattitude 2
mini5break8out
+you%get...
design%three%extremely%different%alternaNve%business%models%using%
those%two%resources