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Knowledge Innovation & Management: Executing Innovative Business Model
Knowledge Innovation & Management: Executing Innovative Business Model
Management
Sesi 11
Executing Innovative
Business Model
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Syllabus
04 06
02
CREATING GREAT EXECUTING
INNOVATIVE TEAM &
VALUE INNOVATION
PROPOSISITION BUSINESS MODEL
03
ASSESSING 05 07
INDUSTRY TREND MANAGING PLANNING &
& CREATING INNOVATION EVALUATION
WINNING
PRODUCT
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The Learning Objectives
Define the business model of a
company and its components.
Design an innovative business model
using the business model canvas
framework.
Develop an understanding of
contemporary business models
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Executing Innovative Business Models
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Plans with innovative products
are not enough; they need to
be complemented with an
appropriate business model.
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Business Model : Why and How ?
A business model, for a company,
represents a better way of doing
business than existing alternatives at
accomplishing their strategy.
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Business Model Defined
A cohesive business system that
reflects the economic logic of the
firm -- how the company can use
its capabilities in order to create
value for its customers and
capture value back from
customers.
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A business model can help
new businesses; it can identify
innovative opportunities of
doing business
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Traveler’s Check From American Express
Consumers
American
Merchants
Express
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Dinner Club Credit Card
Consumers
American
Merchants
Express
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Apple iPod
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Songs Downloaded On iTunes
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Making Things Selling Things Making Things
Source and Distribute, Sell and Source and
manufacture Service manufacture
Company-Side Customer-Side
Source : Magretta, Joan (2002) “Why Business Model Matter”. Harvard Business Review
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Selling Things
Distribute, Sell and
Service
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Dell Gateway Consumer
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Improve/ Tweak Existing Model to Offer Better
Value/ Revenue Sources
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AMAZON
Launched in 1995
Consumers
Merchants Amazon
Source : Alexander Osterwalder and Yves Pigneur, Business Model Generation: A Handbook for Visionaries, Game
Changers, and Challengers, 2010, John Wiley and Sons, NJ.
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AMAZON
Consumers
Fulfillmen
t Services
Merchants Amazon
Source : Alexander Osterwalder and Yves Pigneur, Business Model Generation: A Handbook for Visionaries, Game
Changers, and Challengers, 2010, John Wiley and Sons, NJ.
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A business model is not
the same as strategy.
It is a self-contained
system that does not
involve competition
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A strategy is a broad plan to differentiate the
enterprise either through low-cost leadership or
value differentiation and thereby derive a
competitive advantage
The object of strategy is a business model
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Business Tactics
Strategy
Model (Execution)
Source : Casadesus-Masanell, Ramon, and Joan Enric Ricart. “From Strategy onto Business Models and Tactics.“ Special
Issue on Business Models Long Range Planning 43, no. 2 (April 2010).
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IKEA embarked on a low-
cost, convenience-oriented
strategy. Built a business
model around that strategy
and executed it to perfection
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IKEA - Side
Customer-Side
Design Quality
Modular furniture Stylist Products
Volumes & Scale Convenience
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Stylist Quality Customer Enhanced
Strategy Products Loyalty Revenues
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Lower Cost savings
Modular Long-term
supply-side for
Design suppliers
costs consumers
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Cross-Selling Enhanced
Modular Product
Opportunitie sales &
Design Variety
s revenues
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Enhanced
Easy Immediate Impulse
sales &
Assembly Gratification buying
revenues
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Immediate Enhanced
Easy Impulse Supply-Side
Gratificatio sales &
Assembly buying Scale
n revenues
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Virtuous Cycles Strengthen The Business
Model
Supply- Demand-
Side Side
Modular
Customer
Furniture
DesignValue
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Quiz
1. The introduction of traveler’s checks by American Express was an innovative business
model because:
1. The cost incurred on traveler’s checks was larger than the revenues generated
from them.
2. Cash payments received by American Express from customers in advance for
traveler’s checks were equivalent to interest-free loans.
3. Merchants did not accept traveler’s checks.
4. All of the above
2. A business model of a company essentially outlines:
1. Creating value for its customers
2. Capturing value from its products and services
3. Utilizing capabilities to create unique value and differentiate a company from
competition
4. All of the above
3. T/F A business model defines how a company differentiates itself from competitors
through value-based or cost-based strategy.
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Executing Innovative Business Models
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Components od a Business Model
Customer Value
Proposition
Resources &
Process
Capabilities
Source : Johnson, Christensen, and Hagermann, 2008, Reinventing Business Model, Harvard Business Review.
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Customer Value Proposition (CVP)
CVP
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Physical
Human
Financial Resources Talent
Intangible
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Processes
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Components od a Business Model
Customer Value
Proposition
What, Who and
How ?
Resources
Physical, Talent,
Financial,
Processes
Intangible
Revenue and
Cost
Source : Johnson, Christensen, and Hagermann, 2008, Reinventing Business Model, Harvard Business Review.
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Synergies among The Components Lead
to Virtuous Cycles
Value
creation
Capabilities
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Executing Innovative Business Models
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Business Model Canvas
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Business Model Canvas – Value Creation
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What Is The Value Proposition ?
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Mass
Multi-
Who are the SEGMENT segmen
Segments t
Platfor
Niche
m
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How Will We Reach Segments Through The
Channels
Mass
Multi-
Niche Segment
Platform
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Long-
Touch
engagem
ent
Social
SEGMENT Communi
ties
High
touch Co-
engagem Creation
ent
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Business Model Canvas – Capabilities
Capabilities
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What Resources Should We Use ?
Physical Financial
Human Intangible
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What Are The Partnerships ?
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What are the Activities ?
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Business Model Canvas – Value Capture
Value Capture
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What Are the Revenue and Costs ?
Revenue
How will we make money ?
Costs
What does it cost to make our
products ?
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Business Model Canvas
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Designing Innovative Business Model
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Assess What Is The Current State ?
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Question : What If ?
• Question the assumptions.
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Pay – as – You - Go Subscription Model
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Terima Kasih
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