Transcript Succesful business models

Succesful business models
Workshop business models to scale up
eco-innovations by SMEs (ETAP nov 2010)
Author: Coen Bertens
Date: November 29, 2010
email: [email protected] and you
can find me at LinkedIn
Questions
What business models are (succesfully) used in
scaling up eco-innovations and can governments
support these business models?
How different are they from ‘regular’ innovations?
Which factors determine the business models?
How can/ do financing parties, intermediaries and
subsidies support these business models?
How can/ do governments support these business
models?
What dinstinguishes eco business
models?
Not always different from regular
Eco-marketing businesses deals with a wide variety
of stakeholders
In complex eco-innovations often a variety of
companies
System (eco-)innovations have a different scope of
focus (go beyond products and services)
Different values are part of the business model
Core Strategy
Value Drivers
Value
Proposition
1.
Mission
2.
Vision
3.
Differentiation
Corporate Strategy
Vision, mission, Positioning,
targets and goals
Cliënt Surplus
‘Fit’
Efficiency
Cliënt Interface
Value Network
Architectural Layer
1.
Distribution
Channels
1.
Supply chain
of market components
2.
Client-Relation
Structure
2.
Revenue Model
3.
Capital Model
4.
Price Structure
Uniqueness
Strategic Resources
Configuration of Activities
1.
Core competencies
1.
Systems/Processes
2.
Strategic
Advantages/Goods
2.
Organization Structure
3.
Core Processes
3.
People
4.
Cost Structure
and revenu structure
Corporate Organisation
Work processes and systems,
organization structure,
supply chain
Entrepreneurial
Boundaries
Source: Houtgraaf en Bekkers, 2010
Value network
Price Structure
Setting the price compared to the competition
Supply chain
The value for all participants in the supply chain
necessary or useful for the developing and
exploitation of the final value for the customers
Revenue Model
Future flows of revenues and the structure of these
flows towards the eco-innovation
Capital Model
The way an eco-innovation is funded, money is
used and returned to investors
Characteristics eco business models
From linear to circular business models
Wider business models incorporating several value
chains
How are social values incorporated in the models?
Some eco-innovations are not market dependant but
create new markets
Services instead of products: eco-innovation does
not have to get a central place in the business
model (is this a strength or weakness?)
Present renevue models 1
Type of Revenue Model
Examples
Description
Subscription System
Magazines, phone companies,
newspapers, memberships,
etc.
Different sorts varying from products to
services and memberships. With a fixed
price or a basic price with or without a
premium.
User Model
Water, gas.
Based upon offsetting measured use.
The opposite of a subscription system.
Vendor Lock-in (Razor and
blade)
Razorblades, mobile phones,
printers, Playstation, software
updates.
Luring users with extremely cheap
starting models and relatively high costs
related to the use of the product.
Freemium Model
Skype
Product or service which in itself is
extremely cheap or even for free, but the
attractive upgrades or expanded versions
do cost extra money.
Tied Selling
Often illegal, a toned down
version relates to sets of
magazines.
A popular product is tied to a less
popular product, that way customers are
‘forced’ to buy both.
Service Model
Car industry
Product itself is sold for a price which
equals production costs, earnings are
derived from financing the sale or
supplying support and maintenance
services.
Present renevue models 2
Type of Revenue Model
Examples
Description
Advertising Model
Google Ads, Search engines.
Banners or links on websites that attract
bulk or specialized visitors on the web
through content or service. Earning
models: sponsorships, price-per-click or
auctioning.
Brokerage Model
Christies, PayPal, Real estate
brokers, EBay, Fairs, Expedia,
etc.
Brokers connecting buyers and sellers
and facilitating transactions. For
example: auctions, fairs, search agents,
impresarios, model agencies. Promising
when search/locate and transaction costs
are high. Several models of earnings
possible.
Market data Broker
System
Nielsen, DoubleClick,
vergelijk.nl
Earning revenues through the supply of
data to organisations, concerning
internet surf-, search- and buy behaviour
of consumers. Possible through direct
sales or assistance on providing market
insights.
Yield Management
Hotel, car rentals, Aviation
industry.
Price of the service varies and is
changing and adapting to demand and
the available supply of a temporary
available good.
Factors determing the choice
Supply side factors
Impact of the eco-innovation on the production
process (B2B) or the use (B2C) by the customer
Demand side factors
Market acceptance of/ barriers of the eco-innovation
by the user
Political/ institutional side factors
Barriers or drivers from political/ institutional regime
Factors framework
Type of
Innovation vs
Barrier of
Acceptance
Good
Housekeeping
(Efficient
organisation)
Focus: Product/Service
End-of-Pipe
actions
Focus:Product/Service
Product/Process
Innovation
Focus: Product/Service
Integral Supply
chain
Management
Focus: Product/Service
System
Innovations
Focus: Systematic
SplitIncentives
Green=Expensive
Investment
Profiles (TCO)
Infrequent
Decisions
Support by financing parties
They play safe: entrance to finance is difficult for
SMEs in general
Sceptical on the issue of climate change
Are not very familiar with eco-innovations
Credit ratings are often pessimistic on revenues
Actor mislink: think mainly within the boundaries of
the core business of the companies (conventional
innovations)
Lack of engagement
Support by government parties
Set an example: launching customer
(procurement)
Publicity creates attention
Support helps to interest financing parties
Connecting parties (through a frontrunners
window)
Regulation (setting clear frameworks)
Deregulation (adjusting standards)
Price setting (incorporate environmental
costs)
Be visionary!
We need:
Better insight in (succesful) business
models
Better insight in best practices of supporting
financing parties and governments
Awareness raising
Appropriate instruments by government/EU
in exchange for innovation efforts
Common vision, objectives and targets
from all stakeholders