Boston Consulting Group (2009) - Business Model innovation

Question 1

What are the two elements of a business model?

Answer 1

1. Value proposition

2. Operating model

Question 2

Explain value proposition

Answer 2

1. Target segments: which customers do we choose to serve
2. Product or service offering: what are we offering to the customers
3. Revenue model: How will we be compensated

Question 3

Explain operating model

Answer 3

1. Value chain: how do we deliver on customer demand
2. Cost model: how do we configure our assets and costs
3. Organization: how do we deploy our people

Question 4

What are the seven common pitfalls of BMI

Answer 4

1. Portfolio bloat: unbalanced and overlapping porfolio with resources
2. Failure to scale up
3. Pet ideas: projects don’t go anywhere but refuse to die
4. Isolated efforts: teams can be to distant from the business
5. Fixation on ideation: rarely pilot projects and scale them up
6. Internal focus: more attention for internal needs than customer needs
7. Historical bias: resist overvalueing older models and undervalueing new models

Question 5

What are the three important activities for BMI

Answer 5

1. Uncovering opportunities: Before looking at new opportunities it is important to diagnose the current model and limitations
2. Implementing new model: Scaling up can be the most critical step for BMI
3. Building the platform and skills: Build a platform to manage the BMI process.