Business Model Canvas and Innovation Strategies

Posted on Dec 24, 2024 in Other subjects

Business Model Canvas

1. Customer Segments

Customer segments are the different groups of people or organizations a business serves.

  • Mass Market
  • Niche Market
  • Segmented
  • Diversified

2. Value Propositions

The value proposition defines the unique value a company delivers to customers to solve problems or satisfy needs.

Elements of Value Propositions: Newness, Performance, Customization, Design, Brand/Status, Price

3. Channels

Channels describe how a business delivers its value proposition to customers.

Types of Channels: Direct, Indirect

4. Customer Relationships

Customer relationships describe how a company interacts with its customer segments to build and maintain relationships.

Types of Relationships: Personal Assistance, Self-Service, Automated Services, Communities

5. Revenue Streams

Revenue streams represent the cash flow generated from each customer segment.

6. Key Activities

Key activities are the most important tasks and operations a business must perform to deliver its value proposition, maintain relationships, and generate revenue.

Categories of Key Activities: Production, Problem-Solving, Platform/Network

7. Key Resources

Key resources are the assets needed to perform key activities and deliver value.

Types: Physical, Intellectual, Human, Financial

8. Key Partnerships

Key partnerships are external organizations, individuals, or companies that help the business succeed by providing resources, performing key activities, or reducing risks.

Strategic Alliances, Coopetition, Joint Ventures

9. Cost Structure

The cost structure represents all costs incurred to operate the business model.

Sustainable Competitive Advantage: Organization-Focused

  • Something that our organization does better than our competitors over a long period of time

Value Proposition: Customer-Focused

  • Benefits that our company provides to customers, which meet or exceed the needs of customers, and do so efficiently compared to our competitors.
  • Value propositions impact the customers’ lives

Innovation: Creating something new or improving something existing to add value or solve a problem.

  • Incremental, where small improvements are made to something existing
  • Radical, where something completely new is created

Disruption: A type of innovation that transforms an existing market or industry by introducing something radically new that changes the way things are done.

A product is Disruptive:

  • Lower cost than your traditional competition – Ryanair
  • Higher gross profit margins than competition – Apple
  • Available to a larger number of people – Xiaomi
  • Niche market: testing in markets with less demand, before experiencing high growth – Tesla
  • Create a new category -or a new segment- that dramatically upends the market – Netflix
  • Based on a new technology or new business model – Airbnb

The 10 Types of Innovation

  1. Business model: How you make money
  2. Network: To connect with others to create value
  3. Structure: How to organize and align your talent and assets
  4. Processes: How you use specific or superior methods to get the job done
  5. Product performance: How you create distinctive features and functionalities
  6. Service performance: How you sustain and amplify the value of what you offer
  7. Product/Service system: How you create complementary products and services
  8. Channel: How you get what you offer to customers
  9. Value proposition from branding: How you represent what you offer
  10. Customer experience: How you can promote interesting interactions

Design Thinking:

  • It’s a design mindset that is not focused on the problem, but on the solution.
  • Generally, it relies on user insights to find the real challenges and how they can be solved.

Lean Innovation is focused on increasing efficiency by capturing customer feedback early and often and minimizing waste in the product development cycle

  1. Promote lots of small-scale changes, cheap experiments rather than full releases
  2. Allocate small budgets at the beginning to progress to the next phases in the life cycle instead of asking for a quote for the entire project with a business case.
  3. Incorporate feedback from various parties during the design and implementation process.
  4. Create the “Minimum Viable Products” (MVPs) and prototypes to test them on real people.
  5. Iterate and change direction (pivot) if feedback tells you that you are going in the wrong direction.

The Innovator’s Dilemma (Clayton Christensen)

Sustaining Innovation: Improves existing products for current customers.

Disruptive Innovation: Starts small, targeting low-end or new markets with simpler, cheaper solutions, and improves over time.

The Dilemma: Established companies focus on profitable customers and ignore disruptive innovations, allowing smaller competitors to grow and overtake them.

Solution: Companies must identify disruptive trends early and create separate units to develop them.

Business Model Navigator

  1. Auction: eBay
  2. Open Source: Linux, Android
  3. Open Business Model: Wikipedia
  4. User Designed: LEGO Ideas
  5. Lock-In: Apple (iPhones), Adobe Creative Cloud
  6. Crowdfunding: GoFundMe
  7. Licensing: Microsoft (Licensing its software like Windows and Office to users and businesses)

Challenges in Business Model Innovation

  1. Thinking outside the logic that governs our industry is not easy. Mental blocks slow down the creation of new ideas (“this has always been done this way”).
  2. Thinking in terms of Business Model rather than Product or Technology is difficult. We prefer to think about technologies or products that we can see or understand. Thinking in abstract terms is more complicated.
  3. Lack of systematic mechanisms. There is a belief that only creative geniuses can revolutionize the market. Therefore, as any other discipline, innovation needs a process.

Pentagrowth Model

  • Focuses on growth strategies through the exploitation of five scalable levers, primarily in digital contexts. These levers are key to businesses that have seen exponential growth in the digital economy:
  • Connect: Creating a larger network of users or stakeholders.
  • Aggregate: Collecting data, content, or users to provide value (e.g., platforms like Airbnb).
  • Empower: Enabling users with tools or resources to achieve their goals (e.g., Canva).
  • Multiply: Using existing resources to grow exponentially, such as through franchising or sharing economies.
  • Expand: Broadening offerings or markets, often leveraging network effects.

Question 1: Discord

Perceived Usefulness (PU) & Perceived Ease of Use (PEOU) of Discord, Intention of Use (in this case: intention of use Discord as…)

Innovation of Discord: Servers and channels, roles & permissions, and bots (A bot on Discord is an automated program that interacts with users by sending messages, executing commands, or performing specific actions on a Discord server, such as managing roles or answering questions).

Question 2: What to Ask ChatGPT to Help a Company

Explain the slide: AI & Custom Content

Specific models with AI cohabit user, fine-tuned model, RAG-enhanced model

1. AI Cohabit User (AI Co-Pilot)

Concept: AI works alongside users to assist and improve productivity.

What to Ask ChatGPT:

  • “How can AI assist my team in real-time tasks, like drafting emails or designing content?”
  • “What tools use AI co-pilots for my industry?”

2. Fine-Tuned Model

Concept: Custom AI models trained on company-specific data.

What to Ask ChatGPT:

  • “How can I fine-tune AI to improve my customer support or product recommendations?”
  • “What are the steps to train an AI model using my company’s data?”

3. RAG-Enhanced Model (Retrieval-Augmented Generation)

Concept: Combines AI with real-time data retrieval for accurate responses.

What to Ask ChatGPT:

  • “How can AI use my company’s documents or databases to answer employee or client questions?”
  • “What tools support RAG for accessing real-time business data?”

Purpose: These questions help companies use AI to create customized solutions that improve efficiency, decision-making, and user engagement.