Applied Business Development
Welcome to IBCDP 6:2 – 2011-08-30
Matti Kaulio
Royal Institute of Technology (KTH)
Dept. of Industrial Economics and Management, KTH
mkaulio@kth.se
Roadmap
• Recapitulation
• Best Assignment
• Understanding Business Environment
• Business Case Work
F2F 2
• Strategic awarness
• Understanding Business Environments
• Adding Value (Service Design)
• Service Production & Launch
• “Making it Happen” & Examination
Learning Goal
• How could new business opportunities look like in
your industry?
• What competencies are needed for spotting and
developing them?
Last Meeting:
Bussiness Models and Offerings
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.
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
Problem-Segment-Offering (PSO) model
The Problem/need a
customer face
An identified
market - Segment
”Offering” and
Revenue Model
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
Last Homework Assigmnent
June 2011
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.
Process
1.
2.
3.
4.
5.
6.
Do research: What similar applications exists? What are their
offerings? Etc. Use internet and other sources
Redflect upon the findings
Generate alternatives: Develop 3-5 new PSO descriptions of
new applications
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
Before leaving today you should have showed your preliminary
applications for the coaches
Coaches will be walking around bewteen the groups. They
should be seen as resources for your work.
Best Assignment. . .
Best Assignment
• Group 4
Understanding Business Environments
” Industry Attractivness”
The Landscape: Which Road to Go?
Content
• PEST(EL)
• Porter’s 5-Forces
• Generic strategies
• Market estimates
PEST, PEST(EL)
• Political
- Regulations, tax policy, trade restrictions, and political stability
- Promotion of: health, education, and infrastructure of a nation.
• Economic
- Economic growth, interest rates, exchange rates and the inflation rate,
• Social factors
- cultural aspects, population growth rate, age distribution, career attitudes and
emphasis on safety and demographic changes such as aging population.
• Technological factors include technological aspects such as
- R&D activity, automation, technology incentives and the rate of technological
change.
• Environmental factors
- environmental law, ecological and environmental aspects such as weather,
climate, and climate change. This aspect is linked to Political and leagal factors
• Legal factors
- labour law, discrimination law, consumer law, antitrust law, employment law, and
health and safety law
Industry Analysis: 5-forces
Source:
DeWitt & Meyer, 2004.
Generic Competitive Strategies
(Porter)
• Cost leadership
• Differentiation
• Focus
Nonconsumers or
nonconsuming
contexts
Performance
Different performance measure
1. The Disruptive Innovation Theory
• Discount retailing
• Stell minimills
Time
• Telephone
• Personal computers
• Photocopiers
Company improvement trajectory
Customer demand trajectory
Time
5-Forces & Macro Environment
Source:
DeWitt & Meyer, 2004. Modified
Some Generic Strategies
Generic Competitive Strategies (Porter)
• Cost leadership
• Differentiation
• Focus
Aggressiveness (Miles & Snow)
• Prospector
• Analyzer
• Defender
• (Reactor)
Alternative Generic Strategies
• Niche players
• Pioneers
• Local producers
• Dominant firms
• Mee-too firms
• Worldwide replicators
• Professionals
• Rationalizers
• Conglomerates
Market estimates
• How many petrol stations are there in the USA?
Approaches
• Top-down
• Bottom up
• Iterative process
• 126 889!
Understanding Business Environments
”Uniqueness”
Content
• Value Chain vs Value Star
• 4-action framework
Porter’s Value Chain
C
Customers
Value Propositions
O
R
Revenue
model
Business Concept
Offering
Costs
BS
Business
System
Costs
Costs
Question?
• What is the strategy of Skistar?
Value star
Uniqueness?
Value Chain vs Value Star
The Four-Action Framework (Blue Ocean)
Reduce
Which factors should be reduced
well below the industry’s
standards
Eliminate
Which of the factors
that the industry takes for
granted should be eliminated?
A new
value
curve
Create
Which factors should be created
that the industry has
never offered?
Raise
Which factors should be rasied
well above the industry’s
standards?
Summary
Your challenge this time . . .
• ”Paint the landscape”
• ”Develop unique offerings”
Assessment matrix, example
Application #1
Relative
(Four-action framework)
Customer Value
Uniqeness
(Four-action framework)
Industry attractivness/
Intensity of Competition
(Pest, 5-Forces)
Protection
Revenue Potential
Growth Potential
Diversification potential
...
Application #2
Application #3
Homework assignment 2
To be handed in on the 9th of September
Homework, to bee reported on the 9th of
September
1. Chose one of your applications (or a
combination of)
2. Conduct a deeper analysis of your
application based on the 5-Forces &
PEST. Try the 4 action framework
3. If you are not satisfied – chose another
application and iterate 1-2
4. The outcome should be one (1) selected
application with a ”thick” background
description!
Process
1.
2.
Chose one of your applications (or a combinations of), use the
assessment matrix
Create a PEST(EL) analysis of this application
1.
3.
Create the 5-forces map.
1.
2.
4.
5.
Are some aspects more important than the others?
TIPS: The delimitation of the industry can be tricky, and this issue is
strongly linked to the final result
When conduction your 5-force analysis, use easy market estimates
Try the 4-action framework to further develop your product
Summarize your findings in a Power Point Presentation
1.
2.
Before leaving today you should have showed your preliminary
applications for the coaches
Coaches will be walking around bewteen the groups. They should be
seen as resources for your work.
PEST, PEST(EL)
• Political
- tax policy, labour law, environmental law, trade restrictions, and political stability
- Promotion of: health, education, and infrastructure of a nation.
• Economic
- economic growth, interest rates, exchange rates and the inflation rate.
• Social factors
- cultural aspects, population growth rate, age distribution, career attitudes and
emphasis on safety and demographic changes such as aging population.
• Technological factors include technological aspects such as
- R&D activity, automation, technology incentives and the rate of technological
change.
• Environmental factors
- ecological and environmental aspects such as weather, climate, and climate
change. This aspect is linked to Political and leagal factors
• Legal factors
- discrimination law, consumer law, antitrust law, employment law, and health and
safety law
Industry Analysis: 5-forces
Source:
DeWitt & Meyer, 2004.
The Four-Action Framework (Blue Ocean)
Reduce
Which factors should be reduced
well below the industry’s
standards
Eliminate
Which of the factors
that the industry takes for
granted should be eliminated?
A new
value
curve
Create
Which factors should be created
that the industry has
never offered?
Raise
Which factors should be rasied
well above the industry’s
standards?
Assessment matrix, example
Application #1
Relative
(Four-action framework)
Customer Value
Uniqeness
(Four-action framework)
Industry attractivness/
Intensity of Competition
(Pest, 5-Forces)
Protection
Revenue Potential
Growth Potential
Diversification potential
...
Application #2
Application #3