BUSINESS PLAN

MODELLING
Based on Alexander Osterwalders BM facilitation
methodology
The Marshmallow Challenge
MATERIALS:
20 Spaguetti sticks
One yard tape
One yard string
One marshmallow
TOM WUJEC,
http://www.marshmallowchallenge.com/Welcome.html
The Marshmallow Challenge - Rules
In teams of four, build the tallest
freestanding structure.
Use only the given kit of materials
You have only 18 minutes
You can break uo the spaguetti, string or
tape
Do not open the bag until the start sign is
given
Stop when announced.
TOM WUJEC,
http://www.marshmallowchallenge.com/Welcome.html
THE JOB TO BE DONE (JTBD)
Which is the job to be done?

Customer Value Proposition = JTBD +
Offering

Where is the white spot?
Key entry moments:
Opportunity windows
The Modelling Process and
Prototyping
Frank Gehry
CUSTOMER SEGMENTS
An organization serves one or several
customer segments.

For whom are we creating value?
Mass market, Niche market, Segmented, Diversified,
Multisided platform

Who are our most important customers?
Value Propositions
Seeks to solve customer problems and satisfy its
needs with value propositions.

What value do we deliver to the customer?

Which ones of our customers problems are we
helping to solve?

What bundles of products and services are we
offering to each customer segment?

Which customer needs are we satisfyng?
Value Propositions
CHARACTERISTIC
S:

Newness
Performance
Customization
Getting the job
done
Design
Brand/status
Price
Cost reduction
Risk reduction
Accesibility
Convenience/
usability
CHANNELS
Value propositions are delivered to
customers through communication,
distribution and sales channels.

Through which channels do our customer
segments want to be reached?

How are we reaching them now?
CHANNELS
How are our channels integrated?

Which ones work best?

Which ones are most cost-efficent?

How are we integrating them with customer
routines?
CHANNELS
Channel Phases
1.Awareness
2.Information searching
3.Evaluation (value proposition)
4.Purchase
5.Delivery (value proposition)
6.After sales (support)
7.Re-evaluation
8.Disposal
CUSTOMER RELATIONSHIPS
Are established and maintained with each
customer segment.

What type of relationship does each of our
customer segments expect us to establish
and maintain with them?
CUSTOMER RELATIONSHIPS
Which ones have we established?

How are they integrated with the rest of our
business model?

How costly are they?
CUSTOMER RELATIONSHIPS
Personal assistance
Dedicated personal assistance
Self service
Automated services
Communities
Co-creation
REVENUE STREAMS
Result from value propositions sucessfully
offered to customers

For what value are our customers really
willing to pay?

For what do they currently pay?
REVENUE STREAMS
How are they currently paying?

How would they prefer to pay?

How much does each revenue stream
contribute to overall revenues?
REVENUE STREAMS
Examples:
Asset sale
Usage fees
Subscription fee
Lending/renting/leasing
Licensing
Brokerage fees
Advertising
REVENUE STREAMS
Fixed pricing
List price
Product
feature
dependent
Customer
segment
dependent
Volume
dependent
Dinamic pricing
Negotiations
(bargaining)
Yield management
Real time market
KEY RESOURCES
Are the assets required to offer and deliver
the previous elements.

What key resources does our value
proposition require?,
Our distribution channels?,
Customer relationships?,
Revenue Streams?
KEY RESOURCES
Type of resources:
Physical
Intellectual (brand patents, copyright, data)
Human
Financial
KEY ACTIVITIES
You deliver those elements by performing
key activities.

What key activities do our value
propositions require?,
Our distribution channels?
Customer relationships?,
Revenue streams?
KEY ACTIVITIES
Categories:

Production
Problem solving
Platform/Network
KEY PARTNERSHIPS
Some activities are outsources and some
resources are required outside the
enterprise.

Who are our key partners?
Our key suppliers?
Which key resources are we acquiring from
partners?
Which key activities do partners perform?
KEY PARTNERSHIPS
Motivations for partnerships:

Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and
activities.
COST STRUCTURE
The business model elements result in the
cost structure.

What are the most important costs inherent
in our business model?
Which key resources are most expensive?
Which key activities are most expensive?
COST STRUCTURE
Is your business more cost driven?

Leanest cost structure
Low price value proposition
Maximum automation
Extensive outsourcing
COST STRUCTURE
Is your business more value driven?

Focused on value creation
Premium value proposition
COST STRUCTURE
It can be based on:
Fixed cost (salaries + rents + utilities)
Variable costs
Economies of scale
Economies of scope
Revising the Value Proposition
ELIMINATE
(-)
RAISE
REDUCE
CREATE
(+)
What you can
eliminate?
What you can
reduce?
What should
I raise?
What new value
Can I create?
RED VS BLUE OCEANS
(KIM/MAUBORGNE)
RED OCEANS
Compete in existing
markets
Beat the
competition
Explore existing
demand
Make the value/cost
trade-off
Align with
differentiation or
lower cost
BLUE OCEANS
Create unconstested
markets
Make competition
irrelevant
Create and capture
new demand
Break value/cost trade
off (raise value, lower
cost)
Align with differentiation
and lower cost
THE LONG TAIL CONCEPT
Chris Anderson
Mass markets million of niches.

Web 4.0 niche products and
markets

"infinite shelf-space effect - new
distribution mechanisms.

Digital downloading and peer-to-peer
markets
http://longtail.typepad.com/
The LONG TAIL

The tail is becomming longer, accesible and more profitable!
DESIGN THINKING
Analytical Thinking Design Thinking Intuitive Thinking
BM PROTOTYPING
BM PROTOTYPING AND
SHIFTS
Napkin Sketch
Canvas
Business Case
Field test
Concept
development
Internal pilot
Extended
internal pilot
Improving
Extending
Differentiating
Inventing/
Disrupting
Process
Mobilize: setting the stage, moving people
Understand: immersion
Design: inquiry, generate and test
Implement: execution
Manage: adapt and modify, co-create
STORY TELLING of your business
model
One minute!
41
Determinants of National Competitive Advantage
Firm Strategy,
Structure
and Rivalry
Related and
Supporting
Industries
Demand
Conditions
Factor
Conditions
Source: Michael E. Porter, Competitive
Advantage of Nations, March-April 1990.
Chance
Government
Influence
THE 5 FORCES OF PORTER
INDUSTRY ANALYSIS ALONE
Dr. Mark Buchanan: Industry leaps
Nassim Nicholas Taleb: The Black Swans, The
fourth quadrant
PEST ANALYSIS
POLITICAL-LEGAL
ECONOMIC
SOCIO-CULTURAL (+HOFSTEDE)
TECHNOLOGICAL
BM ENVIRONMENT
KEY TRENDS (foresight)

MARKET FORCES (market analysis)

MACROECONOMIC FORCES
(macroeconomic environment)

INDUSTRY FORCES (competitive
analysis)
KEY TRENDS (foresight)
Technology
Regulatory
Sociocultural
Socioeconomic
KEY TRENDS (UP)
Describes regulations and
regulatory trends that
influence your business model:
KEY TRENDS (UP)
Which regulatory trends influence
your market?

What rules may affect your business
model?

Which regulations and taxes affect
customer demand?
R
E
G
U
L
A
T
O
R
Y

KEY TRENDS (UP)
Identifies technology trends
that could threaten your
business model or enable it to
evolve or improve:
KEY TRENDS (UP)
What are the major technology trends
both inside and outside your market?

Which technologies represent
important opportunities or disruptive
threats?

Which emerging technologies are
peripheria customers adopting?
T
E
C
H
N
O
L
O
G
Y

KEY TRENDS (UP)
Identifies major societal
and cultural trends that may
influence your business model:
KEY TRENDS (UP)

Describe key societal trends. Which
shifts in cultural or societal values
affect your business model?

Which trends might influence buyer
behavior?
S
O
C
I
O
C
U
L
T
U
R
A
L

KEY TRENDS (UP)
Outlines major
socieconomic trends
relevant to your business
model:
KEY TRENDS (UP)
What are the key demographic trends?

How would you characterize income and
wealth distribution in your market?

How high are disposable incomes?

Describe spending patterns in your market
(e.g. housing, healthcare, entertainment,
etc.)?

What portion of the population lives in
urban areas as opposed to rural settings?
S
O
C
I
O
E
C
O
N
O
M
I
C

MARKET FORCES (market
analysis)
Market issues
Market segments
Needs and Demands
Switching Costs
Revenue Attractiveness
MARKET FORCES (right)
Identifies key issues driving and
transforming your market from
Customer and Offer perspectives
Market Issues
MARKET FORCES (right)
What are the crucial issues affecting
the customer landscape?

Which shifts are underway?

Where is the market heading?
M
A
R
K
E
T

I
S
S
U
E
S

MARKET FORCES (right)
Identifies the major
Market Segments,
describes their
attractiveness, and seeks to
spot new segments.
MARKET FORCES (right)
What are the most important
Customer Segments?

Where is the biggest growth potential?

Which segments are declining?

Which peripheral segments deserve
attention?
M
A
R
K
E
T

S
E
G
M
E
N
T
S

MARKET FORCES (right)
Outlines market
needs and analyzes
how well they are
served. Needs and
Demands
MARKET FORCES (right)
What do customers need?

Where are the biggest unsatisfied
cuestomer needs?

What do customers really want to get
done?

Where is demand increasing? Declining?
N
E
E
D
S

A
N
D

D
E
M
A
N
D
S

MARKET FORCES (right)
Describes elements related to
customers switching business to
competitors. Switching Costs
MARKET FORCES (right)
What binds customers to a company and
its offer?

What switching costs prevent customers
from defecting to competitors?

Is it easy for customers to find and
pucharse similar offers?

How important is the brand?
S
W
I
T
C
H
I
N
G

C
O
S
T
S

MARKET FORCES (right)
Identifies elements
related to Revenue
Attractiveness and
pricing power.
MARKET FORCES (right)
What are customers really willing to
pay for?

Where can the largest margins be
achieved?

Can customers easily find and
purchase cheaper products and
services?
R
E
V
E
N
U
E

A
T
T
R
A
C
T
I
V
E
N
E
S
S

MACROECONOMIC FORCES
Global Market Conditions
Capital Markets
Commodities and other sources
Economic Infrastructure
MACROECONOMIC FORCES
Global Market Conditions:
outlines current overall conditions
from a macroeconomic
perspective
MACROECONOMIC FORCES
Is the economy in a boom or bust
phase?

Describe general market sentiment

What is the GDP growth rate

How high is the unemployment
rate?
G
L
O
B
A
L

M
A
R
K
E
T

MACROECONOMIC FORCES
Describes current capital
market conditions as they relate to
your capital needs.
MACROECONOMIC FORCES
What is the state of the capital
markets?

How easy is to obtain funding in your
particular market?

Is seed capital, venture capital, public
funding, market capital or credit readily
available?

How costly is to procure funds?
C
A
P
I
T
A
L

M
A
R
K
E
T
S

MACROECONOMIC FORCES
Commodities and other
sources: highlights current
prices and price trends for
resources required for your
business model.
MACROECONOMIC FORCES
Describe the current status of markets for
commodities and other resources essential
to your business (e.g. oil prices and labor
costs).

How easy is to obtain the resources
needed to execute your business model
(e.g. attract prime talent)?

How costly are they?

Where are prices headed?
C
O
M
M
O
D
I
T
I
E
S
/
R
E
S
O
U
R
C
E
S

MACROECONOMIC FORCES
Describes the Economic
Infrastructure of the market
in which your business
operates
MACROECONOMIC FORCES
How good is the (public) infrastructure in
your market?
How would you characterize
transportation, trade, school quality, and
access to suppliers and customers?
How high are individual and corporate
taxes?
How good are public servives for
organizations?
How would you rate the quality of life?
E
C
O
N
O
M
I
C

I
N
F
R
A
S
T
R
U
C
T
U
R
E

INDUSTRY FORCES (Competitive
Analysis)
Competitors (incumbents)
New Entrants (insurgents)
Substitute products and services
Stakeholders
Suppliers and Value Chain actors
INDUSTRY FORCES (Competitive
Analysis)
Identifies Incumbent
Competitors and their
relative strenghts.
INDUSTRY FORCES (Competitive
Analysis)
Who are our competitors?
Who are the dominant players in our
particular sector?
What are the competitive advantages or
disadvantages?
Describe their main offers.
Which Customer Segments are they
focusing on?
What is their Cost Structure?
How much influence do they exert on
our Customer Segments, Revenue
Streams, and margins?
C
O
M
P
E
T
I
T
O
R
S
/
I
N
C
U
M
B
E
N
T
S

INDUSTRY FORCES (Competitive
Analysis)
Identifies New
(Entrant) Insurgent
players and determines
wether they compete
with a business model
different from yours.
INDUSTRY FORCES (Competitive
Analysis)
Who are the new entrants in your market?
How are they different?
What competotive advantages or
disadvantages do they have?
Which barriers must they overcome?
What are their Value Propositions?
Which Customer Segments are they focused
on?
What is their Cost Structure?
To what extent do they influence your
Customer Segments, Revenue Streams, and
margins?
E
N
T
R
A
N
T
S
/
I
N
S
U
R
G
E
N
T
S

INDUSTRY FORCES (Competitive
Analysis)
Substitute products
and services: describes
potential substitutes for
your offers including
those from other market
and industries
INDUSTRY FORCES (Competitive
Analysis)
Which products or services could
replace ours?
How much do they cost compared to
ours?
How easy it is for customers to switch to
these substitutes?
What business model traditions do these
substitute products stem from (e.g. high-
speed trains vs airplanes, mobile
phones vs cameras, Skype vs long-
distance calls)?
S
U
B
S
T
I
T
U
T
E
S

INDUSTRY FORCES (Competitive
Analysis)
Stakeholders:
specifies which
actors may influence
your organization
and business model.
INDUSTRY FORCES (Competitive
Analysis)
Which stakeholders might
influence your business model?

How influential are
Shareholders? Workers? the
Government? Lobbyists?
S
T
A
K
E
H
O
L
D
E
R
S

INDUSTRY FORCES (Competitive
Analysis)
Suppliers and Value
Chain actors: describes
potential substitutes for your
offers including those from
other markets and
industries.
INDUSTRY FORCES (Competitive
Analysis)
Who are the key players in your industry
value chain?

To what extent does your business
model depend on other players?

Are peripheral players emerging?

Which are most profitable?
S
U
P
P
L
I
E
R
S
/
V
A
L
U
E

C
H
A
I
N

86
Trends
87

88
WAVES
Primevil
Agrarian
Industrial
Information
Knowledge
MEGATENDENCIAS
SOCIALES
1. Educacin personalizada, vitalicia y
universal
2. El mundo con un gran centro comercial
3. Virtualidad en la vida cotidiana
4. La mercadotecnia personalizada
5. El binomio de la vida: salud y tecnologa
6. La nueva percepcin de la riqueza de los
recursos naturales
MEGATENDENCIAS
SOCIALES
7. El consumidor ecolgico
8. La nueva estructura demogrfica y familiar
Metro Dads + Metro Moms
7. La sociedad multicultural
8. La fragmentacin de la megalpolis
9. Los 8 + 5 + N11 Mexico, Nigeria, Egypt, Turkey, Iran, Pakistan, Bangladesh, Indonesia, Vietnam,
South Korea, Philippines
10.El 86% de la poblacin mundial
MEGATENDENCIAS
TECNOLGICAS
1. Sistemas pticos.
2. Biotecnologa agrcola.
3. Biotecnologa mdica.
4. Clulas, tejidos y rganos artificiales.
5. Computadoras de alto rendimiento.
6. Inteligencia artificial.
MEGATENDENCIAS
TECNOLGICAS
7. Materiales inteligentes & Ingeniera de
superficies.
8. mems (sistemas micro-electro-
mecnicos).
9. Micro y nanotecnologa.
10. Nuevas tecnologas energticas.
11. Realidad mixta.
12. Tecnologas inalmbricas.


WIKINOMICS
IDEAGORAS
PROSUMERISM
THE GLOBAL PLANT FLOOR
COLLABORATIVE MINDS
PLATFORMS FOR COLLABORATION
(MODULAR PRODUCTION)
THE WIKI WORKPLACE
97
97
98
99
100
101
Major Trends Driving e-business
TREND CATEGORY TREND
Customer 1. Faster Service
2. Self-service
3. More product choices
4. Integrated Solutions
E-service 5. Integrated sales and service
6. Seamless support
7. Flexible fulfillment and convenient
service delivery
8. Increased process visibility
Organizational 9. Outsourcing
10. Contract Manufacturing
11. Virtual Distribution
102
Major Trends Driving e-business
TREND CATEGORY TREND
Employee 12. Hiring the best and brightest
13. Keeping talented employees
Enterprise Technology 14. Integrated Entreprise Applications
15. Multichannel Integration
16. Middleware
General Technology 17. Wireless Web Applications
18. Handheld Computing and Information
Appliances
19. Infrastructure Convergence
20. Application Service Providers
S Curves vs Dominant Designs

Tipos de Innovacin
ESTRUCT
URAL
RADICAL
INCREME
NTAL
MODULA
R
ESTABLECIDO
ESTABLECIDO
NUEVO
NUEVO
VNCULO
ENTRE
COMPONENTE
S
CONFIGURACIN DE
PRODUCTO
Y TECNOLOGAS
MODULARES

What is on her/his mind?
Preoccupations, worries, ideas
What does he/she sees?
Environment, friends
What the market offers?
What does she/he says?
Attitude, public appearance
What is telling to others?
What does she/he hears?
Boss, friends, media
EMPATHY MAP: CUSTOMER
PROFILE