BTS exam Flashcards
Business model shifts
Service shift
From product to service
Goal: meet a job to be done/need
- end of ownership & prefer outcome over ownership
BMC changes: Revenue streams come from subscription / pay per use fee
Examples: Netflix, Felix, Check
Product design business model: designed to develop products in an efficient way
Service design business model: Get a job done for customers, meeting needs
Business model shifts:
Business model shift
A change in current business model
- Shift in customer segment or relation
- Shift in value proposition
- Shift in cost structure/ revenue streams
Think of the business model canvas
Due to external factors.
6 types of shifts:
1. Service shift
2. Digital shift
3. Stakeholder shift
4. Platform shift
5. Exponential shift
6. Circular shift
Business model shifts
Stakeholder shift
From shareholder to stakeholder
BMC changes: new customer segments, new partners, one customer segments fuels the other
Examples: Tony’s Chocolonely
- “Robin Hood”
- Serves both functional and emotional needs
Shareholder business model: aim is to return max. results to shareholders
Stakeholder business model: move from shareholder orientation to creating value for all stakeholders and society
Business model shifts
Digital shift
From physical to digital
BMS changes:
- channels: digital elements added
- Customer relationship: using digital technologies creates a better customer experience.
Examples: AH bonus, Online newspaper
Goal: Provide a smooth and seamless customer experience
- Design customer experience and track behavior.
Digital business model: use digital technologies to deliver great customer experiences.
Technology is the enables of the value proposition
Business model shifts
Platform shift
From pipeline to platform
Goal: Connecting people who have something to people who need something
BMC changes:
- key activities: connect supply and demand
- Key resources: strong digital capabilities
Examples: Airbnb, Uber
Pipeline business model: value is created in a linear shift (value chain)
Platform business model: facilitating exchange between people who need something and people who have something
Business model shifts
Exponential shift
From incremental to exponential
Goal: making disruptive & transformational changes resulting in rapid growth
BMC changes:
- Key activities: continuos experimentation
- Value prop: Value delivery by combining innovative technologies
Examples: Tesla, Apple
Incremental business model: Remaining status quo and slightly growing
Exponential business model: addressing grand challenge by investing in exponential tech
Business model shifts
Circular shift
From linear to circular
Goal: minimizing waste, maximize productivity & creating a closed loop system
BMC changes:
- Key activities: recycle: waste from production process is input for others
- Value proposition: repair services to expand lifetime
Examples: Patagonia, thrift shops
Linear business model: low quality, cheap production
Circular business model: waste & footprint are reduced
Finance
Pension funds
Funds that represent the retirement assets of workers
- Payment is received after retirement
- Contribute to individual pension accounts of employees
Finance
Pension funds foundations & endowment funds (schenkingen)
Non profit foundations & organizations which retain & invest funds over long periods of time to create stability
Finance
Buy side
Analysts
Value companies by creating forecasts and then making recommendations to investors
Finance
Buy side
Institutional investors
The buy side (money/asset managers)
Finance
Buy side
Mutual funds
(active and passive)
Have a collective of stocks that do not share the same risks (diversification)
Active: manager personally decides where to invest
Passive: Cheap, no need for manager, following mutual funds
Finance
Buy side
Sovereign wealth funds
(zelf beschikking van staten)
Countries with excess savings investing trough sovereign wealth funds
Finance
Buy side
Hedge funds
Going long - going short
(Hedge=protect)
(similar to mutual) Only so-called “sophisticated (rich) investors” can buy them. High risk
Long –> buy the stock
Short –> borrow stock, sell, buy back at lower rate
Finance
Sell side
Traders
Make money from the bid-ask spread and get a comission
Example: Ask= lowest price willing to sell = €10
Bid= highest price willing to sell €25
bid-ask spread = €15
Finance
sell side
Sales people
Sell stocks/bonds to the buy side
Finance
Sell side
Invetsment bankers
Work with companies that either want to buy or sell operating assets “brokers for business”
Finance
Incentives for equity analysts
Ranking systems
(what problem does it create)
The higher the rank, the higher the reward
Problem: young investors say extreme things, if they are right, their ranking shoots up
Finance
Special Purpose Vehicle (SPV)
A subsidiary created by a parent company to isolate financial risk
Benefits:
- Isolate financial risk
- Direct ownership of financial assets
- Hold companies key properties
Finance
Risk mitigation
The SPV’s help the parent company to isolate risk in projects or operations legally.
Securitization of loans is one of the most common reasons for SPV
Finance
Joint venture
Business agreement where two or more parties pool their resources to accomplish a specific goal
The venture is it’s own entity
Common use: partner with local businesses to enter foreign markets
Finance
Joint venture
Types of JV
- Project based JV
- Vertical JV
- Horizontal JV
- Functional JV
