2: Lenses in general Flashcards
What are BM lenses?
Several theories, all needed to examine n understand BMs under different aspects(1 is not enough)
13=4+3+3+3 SETS of BM lenses
IT:
- Digitization lens = diff bw physical n digital world
- Information Technology LENSES = new tech s as Internet of things (Nest), 3D printing
- Digital BM Pattern lens = patterns profiting a lot from, or made possible by Digitization
- Data n analytics
* Econ:* - Transaction cost-driven LENSES = when IT lowers transact cost
- Network economic-driven LENSES = IT network effects
- economies of scope
* StratMgmt:* - Competitive Strategy LENSES = research lit.
- Technology Mgmt LENSES = research lit.
- core comp
* BMs:* - VP
- revenue mechanics
- BMP(attern)
Razor n blade pattern
Created by Gillette 1904 (cheap razors to sell blades repeatedly)
Copied creatively by Apple iTunes, Amazon kindle, HP inkjet printers n ink cartridgesn Nespresso machines n capsules
why “Long Tail” is especially interesting for digital companies?
Applying “Long Tail” is economically feasible for digital companies since marginal costs for additional storage are low
Long Tail BM:
def=
Deviates from rule…
Amazon example:
Why digital?
selling less of more (selling little amounts of very many goods) …from 80/20 rule
More than 50% of products are only available online.
Digital you can afford it coz transaction, storage n distribution costs can be managed efficiently in digital.
Freemium BM is only digital: why? costs vs revenues profile?
- Coz the marginal cost of 1 additional customer is ~zero.
- conversions to premium will bring you over breakeven later
BM “User Designed” + Example
“Prosumers” motivated intrinsically (fun) n extrinsically (money rewards)
Eg Threadless > design t-shirts + vote + earning
They produce in batches
i.materialise > same w 3D designs
BMPattern Crowd Sourcing W examples
> Source creativity, info 99designs: design competitions
atizo: brainstorming market
Wikipedia vs Britannica (fraud risk vs subscription)
BMP Crowd Funding
> get min. Funding n idea validation
Kickstarter, Indie gogo
Internet of things 5-layer model
DsACSaP
Digital service > digital value to customer
Analytics
Connectivity
Sensor / actor
Physical thing > physical value to customer
Cloud markets:
- VA
- Range
- Predictions
- client foregoes capex for ongoing opex
- low 2 high: iPlaSerBizp
infrastructure, platform, service, biz process - exp. growth
Gartner ‘hype cycle’ concept
New tech: hyped on appearance, then disappointment, then slower growth to actual potential
Internet of things:
- Curr strength n weakness
- 3 Directions of expansion to…
- 4 typical gains provided
- Ss: chips getting ever cheaper n powerful
- Ws: they have ‘blurred’ vision so far
- 3Ds: time, place, data: to real world hiRes data
- extra info on world, machine learning, simplicity f use, better processes
Smart light bulbs:
- function
- key Q
- learns use patterns n repeats them on demand
- what should it be sold as? Bulb or >alarm?
5 Drivers of user adoption
+ Overarching theme
pri.c.r.a.c.:
- price
- cost reduction
- risk reduction
- accessibility
- convenience/usability (apple touch screens, Spotify)
+ solve a PAINFUL problem for users
‘How to create value’ 2x2 framework by Prof Fleisch
w 1 eg per cell
product (buy>own) service (recurr fees to use)
digital iTunes store cloud storage
physical dishwasher home rental
Relationship bw physical product n digital service
2 way-benefit key concept:
- Free DS added to PP can increase price 5 times! Eg Philips hue
- cheap PPs can let you sell subscription DS! eg smart home sensors + service plan w minimum bundle
- > combinations (any) add value
Lens cash flows - Product play cash flow scenario:
Def
Implications (2 strats)
Profitable if:
- Vendor monetizes just at beginning, w decreasing cash flows (maybe even negative in later years)
- vendors have interest to limit usage duration = planned obsolescence; or cost Mgmt
- margin on HW * discount rate > cost of service
Lens cash flows - Service play cash flow scenario:
Def
Implications (2 strats)
Problem (only B2C, not B2B)
- initial loss then gains
- vendors want long term contracts; or customer retaining strats!
- consumers, unlike Cos, are STILL reluctant to pay for service
Lens cash flows - Hybrid play
cash flow scenario:
assessment
- all CFs positive!
- best, but not always possible
Lens Porter’s 5 forces
- lens goal
- 3 digital considerations
goal: to measure degree of rivalry in an industry
- ease of suppliers’ forward integration
- ease of customers’ backward integration
- ease transaction/substitution cost
Lens competitive strategy
Def
Digital considerations:
- 3 overlapping roles
-Porter’s 3 generic strategies (don’t be stuck in middle)
unlike that, in the digital space we have 3 overlapping roles:
- HiDE*
- High Resolution Mgmt
- Digitally Charged Products
- Enabler of internet of things solutions
