Dr. prof. little. fuck. ARSCHLOCH LINDEN

Open Business Model Innovation = "The New Imperative for Creating and Profiting from Technology"

Traditionally, new business development processes and the marketing of new products took place within the firm boundaries. However, several factors have led to the erosion of closed innovation:

• mobility and availability of highly educated people (not just in big research institutes)
• increased knowledge flows between firms
• companies willing to risk more (entrepreneurial spirit)
• other companies int he supply chain play an increasingly important role

--> Open Innovation = combining internal and external ideas as well as internal and external paths to market to advance the development of new technologies.

• This means: we have to find a way to get the knowledge from smart people outside the company, we don't have to discover the solution to benefit from it.
• Having a better business model is more valuable than getting on the market first!
• It is not the one who has the best own ideas who wins, it's the one who makes the best use of internal and external ideas and puts them together in a smart way!
• So you have to find the right partners with the right ideas and filter/combine them effectively!

Disadvantages: small companies don't have the means to have a R&D department who has time to anaylse external ideas and generate internal ones.

Advantages: Environment integrated in model

1.    Customer Segments: for whom do you create value (one size does not fit all!)
2.    Value Propositions: Bundles of products and services that create value for you customer
3.    Channels: describe through which touchpoints you’re interacting with cust. and deliver value
4.    Customer relationships: outline the type of relationship you establish with the customer
5.    Revenue streams make clear how and through which pricing mechanisms you capture value
6.    Key resources show which assets are indispensable in your BM
7.    Key activities show what you really need to perform well
8.    Key partners show who holds some of your key resouces or performs the key activities
9.    Cost structure what are the most important costs in your business

Advantages: Map company in one image, very easy to understand, practice-oriented

Disadvantage: No broad analysis of competition structure

> The business model navigator is a systematic approach to develop innovative business models.

When you want to innovate your business model, phases you run through are initiation, ideation and integration.

The navigator is used in the first phase of the initation. By answering the four questions WHO, WHAT, HOW and VALUE, the business model of a company becomes tangible and a common ground for its re-thinking is achieved.

Ideation Phase: On the basis of 55 business model patterns, St. Gallen Business Model Navigator paves the road to a new business model following three steps.

- Involve employees in change > communication

- You don't have to reinvent the wheel when innovating your business model

- Set long-term KPI's, change needs a lot of time

BASIC IDEA: To get a make sure that your busines model will remain competitive over time it has to have some 1. barriers of imitation and needs to be 2. adapted to changes in the ecosystem over time. 

1. To determine who will eventually profit from an innovation you have to consider the following factors:

• level of imitability (how easily competitors can copy or duplicate the technology or process)
• complementary assets (distribution channels, reputation, marketing capabilities, strategic alliances, customer relationships, licensing agreement)

--> are the complementary assets tighly held or freely available and how important are they? how does the company protect itself from imitation (property rights...)? --> determines 

Innovator = company who innovates
Owner of assets = eg. distribution channel who has bargaining power

2. The business ecosystem check allows to adapt to changes in the business environment. it consits of 7 questions:

1.How will the product/service be used and how is it a solution to the customer’s problem?
2. What might customers be enticed to 'pay' for value delivered?
3. How large is the target segment?
4. Do competitive offers exist?
5. Where is the industry in its evolution and has the dominant design emerged yet?
6. How should the product be presented as a solution to customer’s problem, and not merely a novel item/gizmo?
7. What will it cost to deliver value to the customer and are costs’ volume sensitive, and if so, how?

Advantages: One of the best approaches to analyse services/marketing

Disadvantages: No real model, many components, not easy to understand quickly. Therefore not really applicable for businesses.

Principle: The primary aim of any company is the creation of monetary and non-monetary values for the stakeholders of the company (customers, suppliers, employees, shareholders etc.) and the company itself.

The value-based business model shows the basic logic how an organisation creates value.

Value Proposition: What does the company offer which is valuable for the customer?

Value Creation: How is value created in the organisationsystem?

> Layer Player Model, Market Maker Model, Integrator Model, Orchestrator Model

Value Communication: How is the created value communicated/transferred to the customer? > Channels

Value Capture: How is the created value captured in form of revenue?

Value Dissemination: How is value distributed among the organisation and the stakeholders?

Value Development: How the basic logic of value creation is further developed to ensure the sustainability of the business model in the future.

Advantages: Universal & graphical BM-approach, integrated description of business activity, ex-ante fixed dimensions, dynamic actions

It corrects the over-emphasis on the value creation process!

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