INNOVATION

IN BUSINESS
MODELS
CREATING NEW VALUE
PROPOSITIONS WITH
DESIGN THINKING
SUMMARY

3 INTRODUCTION – WHAT ARE BUSINESS MODELS

5 WHY RETHINK BUSINESS MODELS?

7 APPLICATIONS OF DESIGN THINKING:

TOOLS TO INNOVATE IN BUSINESS MODELS

13 CASE STUDIES

16 CONCLUSION

17 ABOUT MJV
 INTRODUCTION - WHAT
ARE BUSINESS MODELS?

THE BUSINESS MODEL IS THE WAY THROUGH WHICH A COMPANY

CREATES VALUE FOR ALL ITS KEY STAKEHOLDERS.
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

To put it into simple words, a business model provides a picture

of your company's business. It is a simple and unified way
of demonstrating how it works. Finding a scalable business
model is very challenging, and requires balance between
experimentation and genius moments, rather than the mere
application of traditional business management methods. Its use
helps see the various elements that make up all the forms of
value creation in a structured manner.

Writer Steve Blank explains the difference between business

plans and business models through the customer's perception.
Business plans are static while business models are dynamic
and tend to focus more on customer value. In his book: Four
Steps to the Epiphany, Blank states that beyond the traditional
product/service development process, it is also important to
master the process of customer acquisition and development
- from discovery to validation and acquisition. Moreover, it is
necessary for the problem and the solution to be known in order
to define who this consumer or user is.

UNDERSTANDING THE
BUSINESS MODEL CANVAS

One of the most popular methods currently used

to build business models is the Business Model
Canvas, designed by entrepreneur Alexander
Osterwalder. He proposes a way to get a systematic

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 understanding of the business, as well as a new
design to innovate or promote improvements in
current models.

It is a way to bring fresh air and clear minds to

review what your value proposition is, who are your
customers (target audience) and partners, your
sources of revenue, your distribution channels,
among other aspects.

This simplified model enables the identification of

important points for innovation and allows you to
understand the business in its essence. The utility
of this tool becomes even clearer when used in
project contexts, and can be adapted as needed.
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

BUSINESS MODEL
BUSINESS MODEL

COMPETITORS REVENUE

TARGET COSTS AND

AUDIENCE EXPENSES

PLANO DE
NEGÓCIOS
DISTRIBUTION AND
VALUE RELATIONSHIP
PROPOSITION CHANNELS

ACTIVITIES

Areas of the Business Model Canvas

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 WHY DO WE NEED TO
RETHINK BUSINESS MODELS?

The innovation of a business model can be extremely positive,

especially since it does not require the implementation of
new technologies in its simplest form. It is possible to deliver
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

products or services using existing technologies for existing

markets. Oftentimes, these changes may be invisible to the
outside world, however, they can increase competitiveness and
bring advantages that can't be easily replicated by competitors.

To better understand this, let's use the example of a business

model of a famous coffee brand.

IDENTIFIED POINTS

NESPRESSO
BUSINESS MODEL

COMPETITORS REVENUE

TARGET COSTS AND

AUDIENCE EXPENSES

DISTRIBUTION AND
VALUE RELATIONSHIP
PROPOSITION CHANNELS

ACTIVITIES

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 __The target audience was drawn up from a section of the
moment of consumption: coffee is seen by these people
as taking a break, taking a break at home or at work;
__Competition was limited to special coffee shops or
special coffee roasters;
__The value proposition was to deliver a good coffee in a
suitable environment;
__The activities were as follows: have suppliers,
manufacture capsules, offer a loyalty program to
consumers in the distribution channels;
__The relationship with consumers occurred via phone,
mail, website or in specialized stores;
__The sources of revenue came from direct and capsule
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

sales

POSSIBLE CONCLUSIONS
This streamlined view is an important starting point for a broad
understanding of what drives the business. By defining these
points, the company established its value proposition ("great
coffee"), its source of revenue (capsules, easy to use) and its
relationship program (continuous).

By using the business model, companies are able to see which

aspects need to be maintained, modified or improved in order
to provide more value to their customers. In addition, you can
check which features should be best utilized and what other
means can be used to get closer to consumers.

On the other hand, they can also choose to transform its

business model as a whole by modifying its value proposition
and rethinking its service. This can occur due to context changes
– e.g. in consumer behavior or in new economy paradigms
(increasingly focused on the digital and on connections).

The cross-over and analysis options provided by this tool are

numerous. It is up to your company to do this exercise and
decide on which points you want to act.

READ ALSO - MJV’S E-BOOK - DIGITAL TRANSFORMATION:

TECHNOLOGY EMPOWERING BUSINESS STRATEGIES

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 DESIGN THINKING APPLICA-
TIONS: TOOLS TO INNOVATE
IN BUSINESS MODELS

One of design's missions is to solve problems. Designers think

systemically and generally create solution from the needs of a
set of users. This systemic thinking comes from a necessary
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

skill in the world of design: empathy, the ability to step into

other people’s shoes and understand them. Therefore, when
designing even the most basic of products (for example, a chair),
the designer will start from the guiding criteria supplied by the
set of users that he seeks to serve.

DESIGN
USER NEEDS
_TARGET AUDIENCE
_DIMENSIONS
_USAGE SITUATION

VALUE FOR THE BUSINESS

_AGGREGATE VALUE
_PRODUCT LIFE CYCLE
_PACKAGE

EXECUTION VIABILITY
_MATERIALS
_MANUFACTURING PROCESSES

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 In turn, Design Thinking (DT) adds this form of thinking to other
areas of knowledge, as in innovation projects that we carry
out with various companies (we'll talk a bit more about this
later). DT's user-centric approach is enriched by research,
visualization, and cross-data tools, which can be very useful for
designing business models.

Seen as a new way of thinking and tackling problems, DT has

steps that help organize and systematize projects, and can
relate to each development stage of the business model.

- Foresee costs, challenges and revenues from what was

created (Prototyping).

DESIGN THINKING STAGES

INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

IMMERSION AND IDEATION: PROTOTYPING:

ANALYSIS: GETTING CO-CREATING AN CREATING A REAL
TO KNOW THE TARGET ASSERTIVE VALUE COMPETITIVE
AUDIENCE AND THE PROPOSITION DIFFERENTIAL
COMPETITION

The Immersion and At this stage, the Prototypes can be

Analysis stages are information collected created to estimate
most often used to becomes knowledge revenues and expenses,
learn more about the and creativity. or to promote
target audience, Collaboration and acceptance tests. By
competitors and to co-creation help doing this, pricing
allow you to "dive" into generate ideas for the processes can be
the essence of the business, as well as validated and possible
business. Empathy and engage teams to define challenges or
research tools are used a value proposition. You difficulties can be
to find customer needs. can also think about detected and resolved
channels and before implementation.
relationships channels
with customers, as well
as activities responsible
for generating revenue.

IMMERSION AND ANALYSIS: GETTING TO KNOW

THE TARGET AUDIENCE AND THE COMPETITION
In order to understand your business' target audience, it's
important to keep in mind that customer behavior changes
much faster today. In the past, it was enough to carry out a
couple specific Immersion cycles, today however, they need to

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 be performed periodically. It is very common for companies to
spend long periods of time without talking to their customers
due to lack of time or even some resistance (thoughts like "we
already know our client" or "my idea [product or service] sells
itself"). However, taking this "leap" in advance may prevent
possible dissatisfaction and even the loss of some of these
clients to the competition.

What are other competitors offering that your business is not?

What are the most attractive value propositions for consumers?
What is your competitive advantage? These questions can be
answered through research and observation techniques, some
of which we will see below.

Semi-structured interviews
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

Semi-structured interviews are dialogic meetings in which

the project member needs to exercise his or her own empathy
towards the user. An open attitude is required and one should
ask questions that allow interviewees to speak openly about
their experiences. Here are some tips that might help you:

__Sit down for coffee;

__Carry out a guided conversation;
__Ask how the interviewee feels;
__Seek other experiences that the interviewee
remembers and ask which sensations are brought up
from such memories;
__Ask what are the reasons behind the answers.
In addition to these, the creation of a research protocol may
serve as a guide to help you conduct the interviews..

Personas
The Personas method is a powerful tool used in the Design
Thinking process. Through this method, we can identify behavior
patterns observed during interviews with consumers or clients.
These findings can be synthesized in archetypes or fictional
characters who represent the business’ target audience.

CLICK HERE TO LEARN HOW TO CREATE

THE IDEAL BUYER PERSONA FOR YOUR BUSINESS

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 OBJECTIVES
1. VALIDATION OF THE IDEA
2. NEED TO CREATE
3. ESTABLISH CRITERIA

TOOLS

INTERVIEWS OBSERVATION PERSONAS

INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

SECRET CLIENT SHADOW VALUE CURVE

SECRET CLIENT

Companies don't know their target audiences well because

they often try to validate their own ideas from information they
already obtained about them. It is necessary to observe what
happens to customers when consuming a product or service, be
it online or offline. It is important to experience the reactions and
interactions in the real environment where they happen, so, the
Secret Client technique can be quite useful.

SHADOW

It is important to go through the same situation undergone by

the users, observing them in a way that your presence doesn't
affect their behavior. Through the shadow technique, users are
able to act more naturally and you are able to perceive their
deepest desires.

VALUE CURVE

This is a tool that maps the needs of users and the aspects that
are valued by them, it also seeks a graphic representation of the
competitive edge that this product or service offers in relation
to competitors. The idea is to leave the so-called "red ocean"

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 area (where there is a high concentration of competition) and
enter the "blue ocean" where your business stands out due to its
competitive advantages.

IDEATION: CO-CREATING AN ASSERTIVE VALUE PROPOSITION

The use of the tools described above enables you to obtain a
series of information. After their consolidation and analysis
they can be transformed into ideas that help make a value
proposition tangible according to the needs of the identified
target audience which is effectively competitive.

CO-CREATION WORKSHOPS AND BRAINSTORMING

This type of meeting can be planned to propose group activities

INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

for the project’s stakeholders. It aims to stimulate creativity and

collaboration. Therefore, the meeting between multidisciplinary
teams and clients, or even partners, may help foster innovative
ideas, and offer contributions from people with different
backgrounds and business perspectives.

PROTOTYPING: CREATING REAL COMPETITIVE ADVANTAGE

ACCEPTANCE TESTING

Acceptance testing is an important part of the business

model development process. By using this tool, it's possible to
minimize the challenges from generating a pricing offer for a
product or service, for example. The variables that make up the
pricing strategy are numerous, as shown below:
PRICING STRATEGY

WORKFORCE COSTS

INDIRECT COSTS COMMERCIALIZATION

(EXPENSES) COSTS

DIRECT DEPRECIATION
COSTS COSTS

PRICE

EXPECTED PERCEIVED
RETURN VALUE

SALES DEMAND
FORECAST

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 The relationship between these variables is complex. For
example, how are your direct costs affected if you need to
reduce labor and indirect costs? What if it is necessary to
enter a luxury market? Would it be possible to reduce the sales
forecast and increase the perceived value by charging more for
that product or service?

The idea is to prototype a variety of strategic combination

options. There is also acceptance testing (using low, medium
or high fidelity prototypes) to know whether or not the product,
service or business to be launched will be accepted by the
public. Below we have some of the questions that should be
asked in this stage:

__Is it worth launching the business?

INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

__Are there any adjustments or adaptations that need to

be made?
__Are there any unexplored opportunities?

EXAMPLE OF ACCEPTANCE TESTING

Cloud storage
Before defining its business, Dropbox, the cloud storage platform
released a simple video explaining how the system worked.
People watching the video were invited to send an email to
show their interest in the service. The video had a very low
production cost and was released before the product was even
programmed. This prototype was very simple, which served to
understand if the product had a market or not before continuing
the project.

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 CASE STUDIES

MOBILE APPLICATION FOR MEDICAL AUDITORS

The Personas tool was used to consolidate the characteristics
detected during the observation stage of a project to create
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

a mobile application for medical auditing. After defining the

research criteria to verify how physicians behaved, an analysis of
the groups of users was carried out in which two extreme profiles
were identified, one more conservative and one more daring. The
personas created served to guide the creation of the application,
whose value proposition should contemplate the two types of
users through language and design.

PERSONAS
MJV CASE: MOBILE APPLICATION FOR MEDICAL AUDITORS

CHANNELS ENTREPRENEURSHIP

ACTIVITIES/
ROUTINE
FORMALIZATION

UNDERSTANDING
THE PROCESS TECHNOLOGY

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 PERSONAS
MJV CASE: MOBILE APPLICATION FOR MEDICAL AUDITORS

CHANNELS ENTREPRENEURSHIP

ACTIVITIES/
ROUTINE
FORMALIZATION

UNDERSTANDING
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

THE PROCESS TECHNOLOGY

INNOVATION IN AN INSURANCE COMPANY'S SERVICE

With the challenge of improving the experience for the clients of
a large insurance company through other channels (in addition
to telephone services), the project team brought together
policyholders, brokers, service providers and other stakeholders
in a co-creation meeting. The result was the development of a
multichannel service solution (via sms, e-mail, website, etc.),
which was created thanks to the different experiences and
expertise of those participating in the process.

GREAT
SERVICE
EXPERIENCE

Case MJV: Inovação no atendimento

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 Application for retail furniture assemblers
A famous retail store needed to create a platform to interact
with its furniture assemblers. The design team developed a very
low-cost paper prototype, and asked users to test it to validate
the acceptance of the idea. It was found, for example, that the
fingers of furniture assemblers were thicker than those of the
design team, which made them notice that the buttons had
to be larger. In addition to identifying aspects of usability, the
prototype allowed the company to save time and cost in the
development process.
INNOVATION IN BUSINESS MODELS CREATING NEW VALUE PROPOSITIONS WITH DESIGN THINKING | MJV TECHNOLOGY AND INNOVATION. ALL RIGHTS RESERVED.

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 CONCLUSION

This material aimed to reinforce three key aspects to innovate in

business models:

__Get to know the target audience better

__Create a competitive edge
__Estimate and test new hypotheses
The stages of Design Thinking, as we say, can be directly related
to each other, allowing the validation of the business before
launching or modifying it. The numerous tools available - some
LEAN UX MÉTODO ÁGIL PARA USER EXPERIENCE DESIGN | MJV TECNOLOGIA E INOVAÇÃO. TODOS OS DIREITOS RESERVADOS.

of which we demonstrate here - can serve as resources for the

immediate visualization and analysis of the results, as well as
assisting in the practice of empathy.

We hope that after reading this you will be able to see how this
methodology’s human-centered approach enables you to think
and develop assertive value propositions and create resources
for revenue and cost reduction.

HAVE YOU THOUGHT ABOUT IMPLEMENTING

AGILE DEVELOPMENT IN YOUR COMPANY?

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ABOUT MJV

TRANSFORMING BUSINESS WITH DESIGN

THINKING AND DIGITAL STRATEGIES

Since 1997, MJV Technology & Innovation has worked with some of
the biggest companies in the world in their business challenges. With
offices in Europe, United States and Latin America, the consultancy
firm today relies on a multidisciplinary team of over 300 professionals.

MJV is composed of three pillars, structured in total synergy:

INNOVATION IN BUSINESS: development and implementation of

innovative solutions to reduce costs, increase profits and create new
business models.

TECHNOLOGY CONSULTANCY: development and implementation of

personalized business intelligence services (B.I), IT and Internet of
Things.

DIGITAL STRATEGY: Development and implementation of corporate

strategy and user experience so that the ”digital self” and ”digital
thinking” become intrinsic to the business model.

We believe that innovation comes from the combination of design

and technology principles. For us, empathy, creativity and processes
centered on the user lead to relevant and impactful solutions, that
generate real value for the business.

Distinct challenges demand distinct approaches. That is why we

combine different expertise – Design Thinking, Service Design,
Gamification, User Experience, Big Data, Lean Methodology, Internet
of Things, amongst others – with the aim of transforming complex
MAURÍCIO VIANNA
challenges in to innovative solutions.
Global CEO
mvianna@mjvinnovation.com

YSMAR VIANNA
Chairman
yvianna@mjvinnovation.com
LONDRES
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