Business Model

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Global Innovation
Management
Business Model and
Presentation
Global Innovation Management
Workout
•
Describe
– A novel e-Marketing business opportunity,
– A potential customer set
• This can sometimes the most difficult challenge; it is determined before determining the
product
– A product or service that can be sold by the firm
– The associated business model
– (you will generally choose from one of the seven e-Marketing business model(s) described in my
white paper on the IDS313.info site)
– Track the value flows in the business model
•
Define a business model:
– That produces revenue by satisfying customer demand
• i.e., that meets the ‘Framing’ challenge
– That can be argued to have high expected ROI
» (where expected revenues significantly exceed expected costs)
• i.e., that meets the ‘Venture Capital’ challenge
Global Innovation Management
Three Challenges
Framing
Venture Capital
Communication
Global Innovation Management
The Framing Challenge
• What Is the Real Business Problem?
– Accurately define your customers and what motives
them
• Properly framing a problem in terms of
• the reality of the situation and
• the objectives of the organization
– is an important step in the decision-making process.
– Mental frames act to channel our thinking and are
important tools to help navigate complex decisions
Global Innovation Management
The Venture Capital Challenge
• What is your business worth, and why?
• Your new venture competes in two markets:
• Product
• Financial
• How will you tie this to your business model
– tying narrative to numbers
• What are the activities, operations and products?
• What are the significant environmental influences?
– major competitive forces outside management control
• How does value flow through your business model?
• What is the Net Present Value of future activities
Global Innovation Management
The Communication Challenge
• Provide a ‘lead in’ which will ‘hook’ your listener (the elevator pitch)
• Provide a brief ‘sales pitch’ presenting the major components of your
innovation and business
• Consider what parts you most want to emphasize about the business
model
• Describe your business in one paragraph (equivalent to the 25 second
pitch)
–
–
–
–
–
Numbers
Behavioral model and capabilities required
Strategy model
Investment Risk
A summary financial analysis to show risk and ROI for the project
• Answer your investors question:
– Why should I give you My money?"
Global Innovation Management
Design of Site
is Part of the Communication Challenge
• In your presentation, you should walk through your
website’s structure, and show how the activities
below are implemented in that website
• You should explain your marketing, AdWords and
keyword search strategy for getting customers to
visit your website’s ‘Landing Page’
• Explain how you manage customers after they arrive
at your ‘Landing Page’
Global Innovation Management
Steps to an e-Businss
Global Innovation Management
Activity #1:
Identify your Customer
•
•
Commercialization is about creating a customer
‘Quiz’ to identify your customer:
• Who?
– … is with customers while hey use the product & How much
influence do they have
– If we could arrange it, who would we want the customer to be
with …
• What?
– … Do our customers experience when the use the product
– … needs provoked our offering
•
•
•
•
What else? … might customers have on their minds
When? … do our customers use this ..
Where? … are our customers when they use this
How? … do customers learn to use the product ..
Global Innovation Management
Activity #2:
Select a Product or Service
• Select a Product or Service that you are interested in marketing via
Internet business models
– This is mainly about determining your Core Capabilities
• Capabilities =Assets + Competences
• Money is important
– Innovation  Utility  Commercial value
’
Global Innovation Management
Identify the 3 most important features
•
Specify the particular customer choices you are offering in your
product or service (no more than three) as
– Identify the discriminators and energizers
•
•
What differentiates your product from competitors’ in the
customer’s minds?
List the three features that are important to the target
customer, and rank them from most to least important.
Basic
Discriminator
Energizer
Positive
Nonnegotiable
Differentiator
Exciter
Negative
Tolerable
Dissatisfier
Enrager
Neutral
So What?
Parallel
Global Innovation Management
Activity #3:
Make a Profitable e-Marketing Business
•
•
•
Define how you will measure the usefulness or attractiveness of each of
these features to the target customer.
•
This performance metric should be a numerical measure
Draw a value map describing your companies proposed business model,
and
– provide some indication of the costs and revenues that will flow into
and out of the business.
Define your product’s top competitor in each of these 3 features



•
Are these companies profitable?
How big (approximately) is their business?
Why is your product better?
Think: Low-cost or Differentiated Products?
Global Innovation Management
Activity #4:
Define your (Internet) Marketing Channels
• Consumption Chain Analysis
– Works from the premise that
• opportunities for differentiating your product from others
– lurk at every step and decision that your customers take
– From the time they first become aware of their need for your
product or service
– To the time thy finally dispose of the remnants of the used up
product
• Product differentiation is the secret to high revenue
Global Innovation Management
Global Innovation Management
Consumption Chains will Help you Determine
How to Lead Customers Through your
Internet Channel
S elec tion
S earc h
O rder and
purc has e
Aw arenes s
of need
D elivery
Repairs and
Returns
P aym ent
F inal dis pos al
S ervic e
F inanc ing
Us e
Rec eipt
S torage and
tras port
In s ta lla tio n
a n d A s s e mb ly
Global Innovation Management
Customer Relationship
Management (CRM)
Determine the main steps in
consumption
•
Each step on the consumption
chain has an attribute map
•
You should only list the 3 or 4
most important steps
•
These will determine whether the
potential customer proceeds to
the next step (good)
–
Or leaves the consumption
process (not good)
L ea v
e
•
Continue
Global Innovation Management
Activity #5:
Describe the Business Model and
Entrance Strategy
• Start with a compelling story
ns
s ig
De
W ork
P r o d u ctio n
Labor
R& D
Cus tom ers
N
ee
ds
– Part of selling your strategy / investment
– Tying Narrative to Financial Numbers
F actory
M
C ustom er
R elationship
M anagem ent
ar
ke
g
t in
• Strategy becomes less philosophy
• More performance and outcome
– What activities, operations and products are within the ‘scope’ of the
valuation analysis? (Bubbles: depends on audience)
– What are the significant environmental influences? (Boxes: major
competitive forces outside management control)
– How does value flow through the relevant scope of the analysis?
(Arrows: value metric)
Global Innovation Management
Market Entrance Strategy
• What are the major competitive forces molding
managerial strategy which add to, or take away from
‘Value’?
• What ‘levers’ (strategy drivers) can management pull
to influence value added?
• What is the functional relationship between value and
the strategy drivers? (Define the ‘Strategy Model’)
• What are the major technologies relevant to
managerial strategy which add to, or take away
from ‘Value’?
Global Innovation Management
Activity #6:
Getting Customers to your Landing Page
• Keywords, keywords, keywords
–
–
–
–
–
Which will you buy?
What are the trends?
How much will it cost?
How much traffic?
How much revenue
• Will that traffic generate?
Global Innovation Management
Keyword Tool
https://adwords.google.com/select/KeywordToolExternal
• Use the Keyword Tool to
find 3 keywords-phrases
that are better than those
you selected
• How much did monthly
search volume increase
• Will you have to pay
more for these new
keywords?
Global Innovation Management
Keyword Trends
http://www.google.com/trends
• Will your 3 old
keywords-phrases be
more or less popular
one year from now
• Will your 3 new
keywords-phrases be
more or less popular
one year from now
Global Innovation Management
Traffic Estimator
Global Innovation Management
Identify your Keyword Goals
• Get more clicks
• Focus on keywords and placements. Increase your ad exposure by adding
keywords and site placements to your ad groups.
• Increase clickthrough rate (CTR).“
• Focus on ad quality
• Attract more clicks by refining your ads,
• Eliminate extra impressions by choosing highly targeted keywords and
placements and using negative keywords
• Improve return on investment (ROI)."
• First, focus on your ads and your keywords and placements to attract the
right audience
• Then focus on your website.
• Be sure your landing page and site are set up to let users find what your ad
offers
Global Innovation Management
Attaining Goals
• Organize your campaigns by topic
• Create separate campaigns for each of your product lines, resources, or
brands.
• This helps you monitor your advertising more easily
• Target the right languages and locations
• For each campaign, target ads by languages and locations
• Create highly specific ad groups.
• As with your campaigns, each ad group should center on a single product or
service
• Build a list of keywords or placements, then separate them into related ad
groups
• Create ads that pertain directly to that list.
• For example, if you sell mp3 players, and you've organized your campaigns
by brand, create multiple ad groups based on the models of each brand.
Global Innovation Management
Conversions
• Conversion = Money Generating Web Action
• Point users to the right landing page.
• When users click on your ad, they should arrive at a landing page clearly
displaying the information or product offered
• Keep the user experience in mind.
• Place important information and images on the top left, where the eye
naturally goes first.
• Help people get what they want in three clicks or fewer.
• Create a simple process for users to complete transactions
Global Innovation Management
Activity #7:
Website Usability
• What will you do once you get a potential customer
to your ‘Landing Page’?
• Walk through your website:
– Show how it implements the Consumption Chain
– Show how you lead customers from one page to
another
– How many steps are there from
– Landing Page to
– Conversion (collecting payment)?
Global Innovation Management
Website Usability
Attention Management
• Identify where customers
attention is focused
• What is your goal?
• Think in terms of Conversions!
Global Innovation Management
Required
• The project will comprise the following:
– Work in groups of three to four
– 25 second ‘elevator pitch’
– 10 minutes to walk through
• the activities that will define your e-business model
• Use the whiteboard to emphasize points, draw graphs, etc.
• Feel free to present on PPT from your laptops.
Global Innovation Management
Required: Meet the Challenges
•
•
•
Framing
– What Is the Real Business Problem?
– the reality of the situation and
– the objectives of the organization
Venture Capital
– Your new venture competes in two markets: (1) Product; (2) Financial
– What are its activities, environmental influences, operations and products?
– How does value flow through your business model? What is the NPV of
future activities
Communication
– Provide a ‘lead in’ which will ‘hook’ your listener (the elevator pitch)
– Provide a brief ‘sales pitch’ presenting the major components of your
innovation and business
– Consider what parts you most want to emphasize about the business model
– Answer your investors question:
• Why should I give you My money?"
Global Innovation Management
Required: How does your e-Business
Site Meet these Challenges?
• In your presentation, you should walk through your
website’s structure, and show how the activities below
are implemented in that website
• You should explain your AdWords and keyword search
strategy for getting customers to visit your website’s
‘Landing Page’
• You should explain the operation of your “conversion
cone – consumption chain” in generating “Conversions”
Global Innovation Management
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