Applied Business Development
IBCDP 6 – 2011-06-15
Matti Kaulio
Royal Institute of Technology (KTH)
Dept. of Industrial Economics and Management, KTH
mkaulio@kth.se
Matti Kaulio
• Associate professor,
- Dept. Of Industrial Management and
Economics, Royal Institute of Technology
(KTH).
• Research interest:
- Technology Management and Organizational
Behaviour
• Ongoing research:
- Leadership in technology-intensive organizations
- Management of Strategic Alliances
- Swedish-Chinese collaboration in the Automotive
Industry
Applied Business Development and
the Business Case
• Applied Business Development (ABD) is a lecture
stream aiming to develop the students abilities:
- To act entrepreneurial within a firm in order to create new
businesses and/or develop existing ones
• ABD consists of Lectures and Business Case Work
is to enhance Business Development Skills among the
course participants.
• The Business Case is primary a learning tool for
integration of theories, methods and models, however,
if the findings presented can lead to a real business
this is positive, but not a requirement.
… in other words
• How will the new business opportunities look like
in your industry?
• How can we develop competencies that are
crucial in order to reach these opportunities?
Four lectures which follows the F2F
modules
• Strategic awarness
• Understanding Business Environments
• Adding Value (Service Design)
• Service Production & Launch
• “Making it Happen” & Examination
Strategic awarness
”Innovation”
”Ipad is a bad computer, I cannot imagine that it will
substitute the usual computer”
Anssi Vanjoki, SvD 20100919
If I would have asked the customer what they wanted –
the answer would have been ”faster horses”.
Henry Ford
Market and Technology Evolution:
Past – Present – Future?
Generative Network
•New Industry Entrants
•Converging Tech., Industries &
Businesses
“Open” Network
•Deregulation
•Competiton
•IP-based Tech.
Propritarian Network
•Market monopoly
•Switch-based Tech.
Telcom – an Emerging Technology?
Technology
What are the technological
trends and uncertainties
related to those?
Infrastructure
What infrastructure will be
present in the future that
supportes the emerging technology?
Emerging
Technology
Market
How should we
interpret the ambiguous
market signals?
Industry
How will the (emerging)
competitive landscape
look like?
Adapted from Day and Schoemaker 2000
Challenges for established firms
facing Emerging technologies
• Past success has developed core competencies,
however those can in a new situation become core
ridgidities
• Character of emerging technologies: Uncertianties,
ambiguity and a possible potential that is too big too
ignore
• First mover advantage vs Fist mover (dis)advantage
• Underestimation of Non-industry competitors
(horizontal competition)
The Telcom Industry - The Players
Service and
Content
Providers
Subsystem and
Component
Manuf
Telcom
Vendors
Regulators and
Standardization
Operators
Hand set and
Computer
Manuf.
End users
(B2B and B2C)
What to do?
• Business intelligence, Openness and Diverse View
points
• Challenger the Prevailing Mind-Set
• Experiment Continually
• Organizational Separation
• Cannibalize Yourself
Adapted from Day and Schoemaker 2000
….. Learn fast! And Experiment!
ABD and a theory of learning
Experiment/
experience
Reflection
Conclusions/
Implications
Theorizing
Kolb, 1984)
Executive
Summary
Offering
Technical
Feasibility /
Assessment
Marketing
Business
System
Implementation
Risks
Finance
Adapted from the Venture Cup handbook
http://www.venturecup.se/graphics/user/vc_swe/vc_swe_files/vc_swe_han
dbok/Handbook%20english.pdf
Lectures
Executive
Summary
Offering
Technical
Feasibility /
Assessment
Marketing
Business
System
Implementation
Launch strategy
Home
work
assignments
Application
selection:
PSO analysis
Market analysis:
Segmentation
Market estimations
5-forces, PEST
Business Model
Risks
Finance
Finance
Service Design
Customer Interaction Map
Value Network
Appendix
The Bussiness Model
The Business Model I
C
Customers
Value Propositions
O
R
Revenue
model
Business Concept
Offering
Costs
BS
Business
System
Costs
Source: Based on SIAR Normann, 1977, & Dr. Tommy
Bergkvist, Strategic Management Institute, modified
Costs
The Business Model II
C
Customers
O
Offering
BS
Business
System
Source: Based on SIAR Normann, 1977, & Dr. Tommy
Bergkvist, Strategic Management Institute, modified
Market = The Set of Actual
and Potential
Customers
− Products
− Services
− Bundles
Value Chain
Value Co-creation (multi-actor)
− Value Star
− Value Network
The Business Model III
External
C
Transformation Process
Customers
”World of Business”
O
Offering
”World of Management”
BS
Business
System
Internal
Source: Based on SIAR Normann, 1977, & Dr. Tommy
Bergkvist, Strategic Management Institute, modified
The Business Model IV
C
Customers
External ”Fit”
Effectiveness
Doing the right things
O
Offering
Internal ”Fit”
BS
Business
System
Source: Based on SIAR Normann, 1977, & Dr. Tommy
Bergkvist, Strategic Management Institute, modified
Doing things right
Efficiency
Developing Offerings
Example: Reflection on Customer Value
• Coffe beans (from producers)
<0,01 /cup
• Roasted, branded & packaged
3 EUR/pkg
• One cup of coffe (Machine)
1 EUR/cup
• ”Latte” in Stockholm city
3,5 EUR
• Espresso Piazza San Marco, Venezia
14 EUR
24
Problem-Segment-Offering (PSO) model
The Problem/need a
customer face
An identified
market - Segment
”Offering” and
Revenue Model
Problem: Gap between a
current state and an
(unspoken) future state
The Problem/need a
customer face
An identified
market - Segment
Segment: Identifiable, similar needs,
reachable and react in the same way on
marketing activities
”Offering” and
Revenue Model
Offering: The Product
Service and Price model
Pricing
Total for 3 Passengers
Fare Price
Infant Fee
Airport Check-in Fee
SEK Web Baggage Fe
Credit card fee
SEK Priority Board
SEK Web Baggage Fe
Taxes, Fees & Charges
Insurance
Total Price
6.00 SEK
182.00 SEK
174.00 SEK
112.00 SEK
174.00 SEK
168.00 SEK
560.00 SEK
528.00 SEK
1,904.00 SEK
Revenue Models
• Producer model
• Broker model
• Consultancy model
• Performance-based model
• The TelCom model/combination model (fixed cost +
opening cost + variable cost; opening fee + downloaded
data)
• The TechTrade model: Licenciering + royalty
• The ”Gilette” model
• The ”Drug Dealer” model
• The ”Gore-Tex model”
• The ”Adobe” model
• The ”Singer” model
• The Construction Industry model
• ”Free” models
”Free” models
Type of free
What’s free
Free for whom
Example (s)
Direct crosssubsidies
A product that makes you
buy something else
Everyone willing
to pay
Buy one – get one for free,
Charge for something else (like
Ryanair)
Three-party market
Content, SW, services, etc
Everyone
Advertisers (3rd party) pay for
access to audience (consumer)
through paying for products
(producer)
Ex: Google and Metro
Freemium
Anything matched with a
premium version
Basic users
Spotify / Spotify Premium,
Flickr / Flickr Pro, Multiple
iStore apps
Non-monetary
markets
Anything anybody wants to
give away without expected
payment
Everyone
Wikipedia, Musicians
promoting themselves
Homework assigmnent ABD I
To be handed in on the 24th of June
Purpose
• The purpose of this group assignment is to train
”divergent thinking” as well as be able to formulate
potential offerings.
Assigmnent and deliverable
Assignment:
Make an divergent analysis of your case topic. That mean
that you should develop a few (3-5) different possible
applications, analyze and characterized them,
and when you meet in the next module be prepared to
chose one of these applications to continue with.
Deliverables
Hand in: A report including a comparison of generated
possible applications. The report is written in Power
Point and covers the ssigmnemnt, description of your
research findings, description of 3-5 PSO offerings and
a summarizing table
The report should be written in and handed in no later than
on the 24st of June.
Application selection: WWGD
Case
Group A and D
”Payment and paying”
Group 1 and 4
”Google Medica” alternative
Group 2 and 5
”Google Wallet”
Group 3 and 6
”Google Wave”
How can an search application for a medical
purpouse look like? It could focus on private life
(family or individual), or foucus on professinal
useds (doctors, for example c.p.
google.scholar).
How can an transaction application look like?
Private life/business life; specific applications
How can an application look like that should
rationalize individual and group working
processes and practices? C.p. ”Wave”
Process
1.
Do research: What similar applications exists? What are their
offerings? Etc. Use internet and other sources
2.
Redflect upon the findings
3.
Generate alternatives: Develop 3-5 new PSO descriptions of
new applications
4.
Summarize your findings in a power Point Presentation where
your potential applications are presented in text and in a table
- do not select which application to continue work with! This is a
task för the next F2F module
5.
Before leaving today you should have showed your preliminary
applications for the coaches
6.
Coaches will be walking around bewteen the groups. They
should be seen as resources for your work.
Criteria for a ”good” application
• Technology-Product gap
product or service composed of existing and/or new
technology
• Unique customer value? (reduce/add)
• Market potential – revenue
• Market protential – growth
• Related to TeliaSonera’s business
• NOTE: In your case it is not impiortant that your business case fits
in TeliaSoneras product portfolio. However, it need to be related.
• The password for WiFi
bAGpYgnC
To be continued. . .
• Six conference rooms in Sing-Sing are avaliable
• Work on all your three assignments
- Finish competence inventory and work agreement (prel)
- Continue with ABD – application generation and Dinner
18.00
• Continue after Dinner
• Coaches will meet your team during the evening
• You need to show 3-5 alternative PSO:s to the
coaches before you leave today!