Entrepreneurship

Business Model Innovation

Datin Sri Prof Dr Suhaiza Hanim Dato Mohamad Zailani
Visiting Professor
Institute Technology Bandung (ITB)
5 February 2020
Entrepreneurship Agenda
Business 01 What is Business Model?
Model
Innovation 02 Business Model Innovation

03 Entrepreneurship Business
Model Innovation

1
Point to Ponder

“In a world where

everyone is after
your business you
must supply your
customers with a
to buy
you instead of your
competitor”

2
Many Tried to Own the Concept…

3
 Start Up vs. Business Model
The purpose of planning is to move
01
you from thinking to doing….

As quickly as possible! 02

A start up is NOT a small version of

03
a big company waiting to grow up!

A start up is very often a business

04
idea in search of a business model!

4
 Start Up vs. Business Model
Business
Model

Established Startups
Need to search for a
companies scalable & profitable
Execute plans against an
business model
established business
model 5
What is Business
Model?

6
 Business Model

The conceptual logic of how a

business creates, delivers and
captures economic value [from
customers]

7
 Business Model Components
Value Proposition Core capabilities

Market Segments Partner Network

Business Distribution Channels Commercialize Network

Model

Customer Relationship Cost Structure

Value Configurations Revenue Model

8
Judging Criteria for Business Model

C Communicate
C Commercial
C Competitive
C Correct
C Clear
C Complete
C Convince
9
 5Fs by 4Ps + 4Cs + 4Es
Needs of Customer

Product Customer Consumer

Solution Expectations

Price Customer Consumer

Cost Evaluation

Features

Finance Place Customer Consumer

Convenience Experience
Freedom

Feeling
Promotion Customer Consumer
Future Communication Emotional

10
 Basic Idea

Iterate State business

as
needed model
hypotheses

Prioritize
Test hypotheses
hypotheses
to test

11
 Business Model Canvas
• Language for internal communication –
avoid misunderstandings
• Template to remember relevant
business guesses to work through
• Emotional help to focus on ”what we
don’t know” – rather than what we
have data on

12
Evolution of the Business Model Canvas

13
Evolution of the Business Model Canvas

14
Left and Right Canvas
LEFT CANVAS RIGHT CANVAS
efficiency value

15
Business
Model 7. 4.

8. 2. 1.

6. 3.

9. 5.

16
 Starting Point Goal

Guess! Validated Validated

Guess! Guess!
Guess! hypothesis Validated hypothesis
Guess! Validated
hypothesis Validated
hypothesis
hypothesis

Validated Validated
Guess! Guess! hypothesis hypothesis

Guess! Guess! Validated Validated

hypothesis hypothesis

17
3 Layered Business Model

18
Business Model Canvas

19
Customer Segments

For example:
• Mass market
• Niche market
• Segmented
• Diversified
• Multi-sided

20
Value propositions

Can be:
• Quantitative
(e.g. price, speed of
service etc.)

• Qualitative
(e.g. design, customer
service etc.)

21
Channels

For example:
• Direct
- Own store
- Website

• Indirect
- Partner stores
- Wholesalers

22
1
Customer Relationships

• Personal
• Dedicated
• Self-service
• Communities
• Co-creation

23
Revenue Streams

• Asset sale
• Usage fee
• Subscription
• Leasing
• Licensing
• Advertising

24
Key Resources

• Physical
• Intellectual
• Human
• Financial

25
Key Activities

• Production
• Problem solving
• Platform/Network

26
Key Partners

• Strategic alliance
• Coopetition
• Joint venture
• Buyer-supplier
relationships

12
Cost Structure

• Cost driven
• Value driven
• Fixed costs
• Variable costs
• Economies of scale
• Economies of scope

28
Business
Model

29
Business
Model

30
Business
Model

31
Business
Model

32
Business Models as Value Networks
or Platforms
Partners Channels &
Focal firm’s business model customers

33
”Business Models” as Revenue Models

”They use a
razor and blade
business
model.”

”They use a
free-mium
business model.”

34
Key Benefits

Fast and easy

Easy to share
to complete

Encourages Enables
iteration / everyone to see
prototyping the big picture

Provides
Utilises visual
structure but
thinking
light touch

35
 Product-Market Fit
When you present your
idea, be most suspicious
of ”yeah, that seems real
nice”- type answers.
Converse about this
BEFORE you
introduce your idea

(A prior
need-based
conversation
helps with
perspective.)

Value proposition Customer needs

36
The basics of identifying and
improving business models

1. describe it 2. discuss it 3. improve it 4. Implement it

37
 OK
THERE

Her
HERE
e

CEOs
10°

Managers
60°

everything else than planned

Staff
360°
38
“Insanity:doing the same
thing over and over again
and expecting different
results”
Albert Einstein

39
Soft Decisions in the Business Model

think outside-of- aligned to the value propositions

the box business identity
40
Business Model
Innovation

41
 Evolutions of Innovation
DISRUPTIVE
INNOVATION BLUE OCEAN
STRATEGY STRATEGY
1995 2005

1987 2003 2013

DESIGN OPEN CLOSED
THINKING INNOVATION INNOVATION
STRATEGY STRATEGY SRTATEGY

42
 Enabling Business Model Innovation
Intellectual Property Invention Innovation

New Idea
Science-based
Intellectual property Invention
Technology-based
+ +
+
Product or Service Commercialization
Technology proof
Prototype Business management
Novelty proof

Individual Entrepreneur
Researcher, Inventor
Inventor
Business firm

43
user-centered strategic fit

interdisciplinary approach creativity & exploration

44
 The Business Model Design
Process
Identify interdisciplinary
stakeholders Bring back reality
-> Set-up team > prototype

Understand (business)
environment Chose suitable design
–> frame problem -> decide

Match with reality Execute

-> ideate -> project portfolio

45
 Innovation Process Concept
• Infographic Style

Test
Prototype Empathy

Ideate Define

46
 How to Succeed at Innovation?
Customer Operational
insight excellence

How to
Succeed at
Innovation?

Value network
Value network
operational
insight
excellence
47
 4 Reasons in Favour of Business
Model Innovation
New technologies and
products require new
business models 01

Potential for radical and Configure to deliver on

02 04
disruptive innovations customer demand
through new business
models
03

Differentiation from the

competition 48
 Culture of Innovation
01 02 03 04 05
Redefined Develop and Recognized Cultivate trust Empower
your notion of support an variations in and proficiency
innovation. action based the scope autonomy
environment and impact of
innovation

49
 Culture of Innovation
06 07 08 09 10
Permit failure Dig deeper Embrace Align Implement
for the change innovation ideas
opportunities and strategy

50
 4 Dimensions of Innovation Model

WHY WHAT HOW WHO

WHY does it WHAT is the HOW is WHO are

important to benefit to the the benefit the target
the company? customer? created? customers?

51
 is business model
WHY
innovation important?

52
Why do Companies Engage in
Business Model Innovation?

53
Business Model Innovators Outperform
Competition

54
Higher Operating Margin Growth

55
Higher Shareholder Return

56
Sustainable Product Success

Stagnating or
declining
revenues

57
Sustainable Product Success

58
Align to Changing Markets and Take
Advantage of Trends

59
“Get the business model
wrong, and there is almost
no chance of success...”
Prof. David Teece
University of California, Berkley.

60
Why is Business Model Innovation
Important?
Major element of Means to adapt to the
differentiation and rapidly changing
sustainable competitive environment and seize
advantage opportunities

Fundamental to Key to the

performance commercialization of new
technologies

61
Your business model needs to
be managed, renewed and
changed

How to do it?
1
WHAT
is innovation in
business model?

62
63
 How Do You Do Business?
Which assets and
Which activities do you capabilities are
perform? necessary to perform
these activities?

Who performs the

How do you organize
activities and provides
and manage the activity
the assets and
system?
capabilities?
65
 Business Model Innovation
…is the invention of
new ways of doing
business,…

…is the invention of new

ways of doing business,
with the aim to provide
new and/or increased
value for the customers,
the company itself and
its partners.
66
Business Model Innovation
Traditional New
Business Model Business Model

Outsourced to Nokia,
Infrastructure Siemens, Ericsson, IBM

Content 3rd party developers

Marketing, Branding,
Marketing
Customer Relationship

67
 What Value Do You Create?

Fulfilling Operational Offering your

customers’ needs
Financial partners
and making their
advantages.
life easier.

Firm Value Proposition

Customer Value Proposition Ecosystem Value Proposition

68
 Value Propositions

Firm Value Proposition

Revenues
Customer Value Proposition
Customer Lock-In Ecosystem Value Proposition

Convenience Platform for other

Copyright protected
services / products
Low cost downloads
Access to customers &
global distribution

69
Business Model Innovation as a Strategic
Choice

New
Products
Services New

Existing Business Models

Existing
Markets
Customer Segments
70
 Example

Products Markets Business

Services Customer Models
Segments

Books United States Retail Bookstores

Online Retail

71
 Example

Products Markets Customer Business

Services Segments Models

Books United States Retail Bookstores

Range of Global Online Retail

online businesses

72
 Example

Products Markets Business

Services Customer Models
Segments

Cars People living in cities Sell the car

Rental by the day

Mobility Solutions Rental by the minute

73
 Example

Products Markets Business

Services Customer Models
Segments

Furniture Young families Home delivery

city areas

Do it yourself

74
Business
Model

Will this work Yes!

in our
company?
75
HOW
to design new
business models?

76
Major Challenges and Barriers

Individual
Challenges
• Change in
Organization
behaviour
al Challenges
• Mental
Business • Lack of models/cognitive
Model capabilities maps
Innovation • New organization
Challenges required: Yes/No?
• Different type of
innovation
• High risk and
uncertainty
77
The Business Model Innovation Loop

2 Design

3 Do
1 Discover

78
 Macro-economic
Yourself
Legal / Regulatory
Experts Extreme Users
Society
Non-customers Peers Culture
Technological
Customers Groups Socio-economic
Trends
Individuals
People

Sources of inspiration
Where to look for
opportunities?
Your company
The Market
Competitors
Business Model Strategy Existing offerings
Strengths Weaknesses Scope of offerings Existing business models
Assets Strategic groups
Capabilities Appeal
Substitutes Suppliers
Core competences
Buyer Experience Customer segments
79
80
Look at Non- Who is not buying Why are they not
Customers our product / buying?
services?

What are the How can we How can we turn non-

barriers to increase our customers into
consumption? revenues? customers and
become more
independent of our
existing customers?

81
 Summary
The business model describes how a firm takes resources, often
in the form of technology, as inputs and converts them through
customers and markets into economic outputs, thereby
connecting resource potential with the realization of economic
value. The business model, thus, refers to the customer
segments being served, and the customer offering, how the firm
configures its resources, and how it sells and distributes its
offering, creating value for its customers, and profiting from these
activities through its value-capture mechanism. Firms may offer
products, or services, but their offering is embedded in a system
of activities and relationships that comprise their firms’ business
models.
What then is a Business Model Innovation?
A business model innovation is the introduction of a new way of
creating value for customers, the way the value is delivered
and/or the way the firm appropriates value from the customer
offering. A business model innovation does not discover a new
product or service; however, it may redefine an existing product
or service, how it is delivered to the customer and/or how the
firm profits from the customer offering. A business model
innovation, by itself, can create strong competitive advantage.
Although product or service offerings may be technologically
similar they can render radically different performance. Hence,
technology alone is not the fundamental engine of profit growth.
Entrepreneurial
Business Model
Innovation

82
Business Model Innovation Project

83
10 Types of Innovation

84
Entrepreneurial Business Model
Innovation

85
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 UNIVERSITY OF MALAYA
ENTREPRENEURSHIP CENTRE (UMEC):
A WAY FORWARD

PROF DR SUHAIZA HANIM DATO MOHAMAD ZAILANI

UMEC
UNIVERSITI MALAYA
 TARGET MARKET No of Student
Students UM
Students UA/US trained/ have
Staffs
Industries
own business
UMEC is
More MOAs/ visible
MOUs with
More projects agencies
- Invitations from agencies
- Fund from KPT
- Challenges
Patents of
- Researches
Training
- Sponsorships from corporate
alumni UM Programs,
products &
- Collaborations with agencies
Services
More
income
generated
Create
Resources businesses/
jobs
 PUSAT PUSAT
KHIDMAT PENDAPATAN

UMEC BIZ
INKUBATOR

KPI KPT KPI HEPA UM

UMEC MAMPAN KPI

ONLINE BUSINESS ACADEMY (OBAC)
 UNIT JUMLAH JUMLAH
BIL NAMA FACULTY CGPA JUALAN JUALAN KEUNTUNGAN
(RM) (RM)
1 MUHAMAD SOFI B. HASHIM API 3.34 312 RM26,520.00 RM9,360.00
2 ABDULLAH ABBAS B. MOHD JELANI API 3.51 189 RM16,065.00 RM5,670.00
3 MOHAMAD EHWAN B. ZULKEPLE API 3.27 116 RM9,860.00 RM3,480.00

OBAC WAN HABIBAH MARDHIAH BT WAN

4 MUSTAFA
5 MOHD FARID WAJDI MUSTAFFA
FPUM
API
2.72
3.32
94
34
RM6,580.00

RM2,890.00
RM2,820.00

RM1,020.00
6 ABDUL AZIZ B. MAMAT API 3.65 33 RM2,805.00 RM990.00
7 MUHAMAD ZAID BIN SOHAIMI API 3.3 27 RM2,295.00 RM810.00
8 SITI HAJAR BT ABD WAHAB API 3.69 27 RM2,025.00 RM810.00
9 ABBAS BIN ROSEDI API 3.03 19 RM1,330.00 RM570.00
10 NOR IZYANI BT MOHD ROZI API 3.37 18 RM1,260.00 RM540.00
11 WAN AHMAD FAUZI B. WAN MUDA API 3.69 17 RM1,445.00 RM510.00
12 NURUL AFIQAH BT RAZALI API 2.86 15 RM1,125.00 RM450.00
MUHAMMAD NAIMMUDDIN BIN MOHD RM1,275.00 RM450.00
13 NASIB API 2.89 15
14 BASYIRAH BT ABDUL RAHMAN SAINS 2.57 14 RM980.00 RM420.00
15 MOHAMAD HAFIS B. SALEHUDDIN SAINS 3.04 13 RM1,105.00 RM390.00
16 MUHAMMAD HAFIZI B. ARIFFIN FSSS 2.76 13 RM1,105.00 RM390.00
17 NOVY BAHRIANI BTE BAHRUDDIN UMCCED 2.57 11 RM770.00 RM330.00
SITI AMIRAH BT MOHD AHMAD RM825.00 RM330.00
18 KAMAL API 3.47 11
19 MUHAMMAD ZAKARIYA BIN SHAFII API 3.13 10 RM1,200.00 RM300.00
20 WAN ABDUL RAHIM BIN WAN ISMAIL API 3.27 10 RM850.00 RM300.00
21 HERLINA BINTI NORMAN API 3.65 10 RM1,500.00 RM300.00
REFLEKSI UMECBox Biz
 INKUBATOR
• Latihan UMECBox BIZ • Dana
• Seminar • Praktikal • Pengalaman
• Daftar SSM • Testimonial
• Buka akaun
bank
SYARIKAT
PEMBUDAYAAN
SPIN OFF
INKUBATOR UMECBox Biz
Menjalankan biz kontena UMEC FoodBox yang
berasaskan perniagaan makanan Grab n Go
daripada makanan sejuk beku.
PRESTASI UMEC FOODBOX FEB - MAC
RM25,000.00

RM 21,915
RM20,000.00

RM15,000.00

RM10,000.00

RM5,000.00 RM 7,803 RM 3, 058

RM-
18 JAN - 31 JAN 1 FEB - 29 FEB
(RM 1,124)

RM(5,000.00)

SALES NET PROFIT/ (LOSS)

UMEC juga telah menyediakan food truck
untuk dijadikan sebagai pelengkap kepada
Kontena UMEC FoodBox dengan keluaran
makanan sendiri iaitu UMEC Burger dan
Sandwich Bunway.
Menyediakan kemudahan mesin layan diri
untuk UMECBox yang berasaskan
perniagaan makanan Grab n Go daripada
makanan sejuk beku sebagai alternatif
kepada perniagaan kontena UMEC FoodBox.
 IMPAK UMECBox Biz
Menyediakan Menarik minat
pelabur di Syarikat
platform untuk
pelajar kalangan Spin-off
menjadi alumni untuk
usahawan melabur

Menjana
pendapatan Menjadi pusat
dan keusahawanan
pencapaian KPI inovasi
UMEC
BLUEPRINT KEMENTERIAN PENDIDIKAN MALAYSIA
(PENGAJIAN TINGGI)
10 LONJAKAN

Mewujudkan peluang
kepadapelajar dan
staf akademik untuk
menguasai kemahiran
keusahawanan
menerusi cuti sabatikal,
sangkutan industri,
inkubator perniagaan dan
dasar laluan istimewa
kepada perniagaan yang
dipelopori pelajar.
 Statistik Jan 2016 – Ogos 2017
Pelajar

4,120 yang telah menglibatkan diri

dalam program keusahawanan

Usahawan pelajar

273 yang telah dilahirkan

MOU bersama agensi luar

6
Malaysia Productivity Corporation (MPC), 2015
Kementerian Wilayah Persekutuan (KWP), 2016
Kementerian Kemajuan Luar Bandar & Wilayah (KKLW), 2016

Jalinan hubungan dengan industri

MyDec Innovation Sdn. Bhd, 2016

12
Juara Saji Sdn. Bhd. 2016
Siti Kitchen Foodpedia, 2016
Dachser Integerated Logistics M Sdn. Bhd. 2016
Paten Trademark, 2016

7
UMECBox Biz
UMEC FoodBox
UMEC FoodTruck
Xpress UMECBox
Thank You

102