Business Model Shifts

Question 1

How and where is value being created on a business level?

Answer 1

o Business model needs to add value. A business shift adds a different value to a different goal/product.
o The needs of customers are always the same, but the behaviors change
o Customer needs should always be kept simple
o Flexibility; it should be kept smooth otherwise they lose interests

Question 2

What is a business model shift?

Answer 2

A business model shift is a small change in a current business model. A shift of value proposition. A shift of customer segment, revenue stream, or resource.

Question 3

What are external factors for changing your business model?

Answer 3

• Pandemic
• New market entrants
• Changing customer behaviour
• New digital technologies

Question 4

What does a business model canvas do?

Answer 4

It helps to understand how value is created

Question 5

The Exponential Shift: What is it?

Answer 5

Incremental -> Exponential, the exponential shift focuses on creating the right environment for continuous exponential growth. Companies must invest in exponential technologies like AI, that enable the business model to continually adjust to customer needs. This model is about solving a big problem for the masses at 10X the scale an incremental model would.

Question 6

The Exponential Shift: How does it impact the business model?

Answer 6

 Value proposition: Delivering value is done by combining different innovative technologies to unlock new value creations
 Key activities: Focus on continuously experimenting
 Key resources: strong digital capabilities needed (AI)

Question 7

The Exponential Shift: Patterns

Answer 7

1. Energy:
   offer new means of transportation powered by the sun for example. Provide affordable tech to generate energy locally using abundant sources such as the wind, sun and moving water.
2. Food:
   Offer global citizens affordable, high-quality, organic and natural food. Use less resources and reduce the drain on our planet. Combine using AI, robots or biotech.
3. Health:
   Offer individuals and communities health, wellness, and treatments that are precise and personalized. Combine robotics, big date, machine learning and nanotech to better understand diseases. Consumers are partners by sharing their health data to support data-driven healthcare.
4. Water:
   Offer safe water. Extract water from the air or turn salt water into drinkable water. No more deaths due to polluted water. Predicting water supply and demand and optimize water systems using AI.
5. Learning:
   Offer information and experiences that build knowledge and skill. Provide a wide variety of interactive and sophisticated classes and content.
6. Space:
   the private sector and governments work together to explore space and build settlements for the benefit of all.

Question 8

The Exponential Shift: High Level Strategic Choices

Answer 8

1. Adapt an exponential mindset
2. Focus on a big problem
3. Digitize value creation
4. Develop an algorithm
5. Find unusual partners
6. Build a community of fans

Question 9

The Digital Shift: What is it?

Answer 9

Physical -> Digital, a digital business model is designed to provide a smooth and seamless customer experience online and offline.

o PICNIC: deliver services and are competing with supermarkets. They do it by an app. The app is easy and comfortable. PICNIC has distribution centers, so they have less costs than supermarkets. Distribution centers are outside the city so cheaper. They do not charge for delivery, because -> there is no stock.

Question 10

The Digital Shift: How does it impact the business model?

Answer 10

 Key activities: design customer experience, track customer behaviour, interact with the customers on a frequent basis.
 Customer relationship: using digital technologies to offer new customers an experience
 Channels: Digital elements added to a physical business
 Key resources: strong digital capabilities

Question 11

The Digital Shift: Patterns

Answer 11

1. Digital first:
   Customers and the organizations serving them are always connected. (Fortnite)
2. Digital proposition:
   A digital product such as a piece of software, a movie, or a song, is easy to distribute since it does not occupy any physical shelf space and the same product can be sold numerous times.
3. Digital connection:
   this pattern is focused on using digital technologies to enhance, or innovate the way to connect to customers. It can be about providing online access to physical products and services being offered. (Domino’s pizza)
4. Bolted on:
   Is about digital elements being added to a physical business. “We also have an app”, “Go to our website”

Question 12

The Digital Shift: High Level Strategic Choices

Answer 12

1. Define business goals
2. Explore technology options
3. Test small
4. Make it personal
5. Think beyond
6. Stay human

Question 13

The Platform Shift: What is it?

Answer 13

Pipeline -> Platform, a pipeline business model is a traditional linear value chain in which products are produced from raw materials and sold to customers.

o Platforms creates new customer segments (uber is cheaper than cabs so more you will attract new customers because it is cheaper)
o The platform shift aims to connect people who need something with people who have something.
o Uber Eats: business model includes a restaurant, person who buys, and a driver who brings the food. Value creation for restaurants as they have a bigger platform and can reach more people.

Most companies are shifting from pipeline to platform. Example: electric step. You can offer this in a store, but you can also offer it like the company LIME does. The steps are to be found everywhere in the city and you can activate it with an app, which keeps track of the distance and money.

Question 14

The Platform Shift: How does it impact the business model?

Answer 14

 Customer segments: supply side vs demand side
 Revenue stream: Revenues created by advertisement and/or share of the price paid
by the consumer
 Key activities: connecting supply and demand, preventing fraud/bad service
 Key resources: strong digital capabilities needed

Question 15

The Platform Shift: Patterns

Answer 15

1. Efficient product trading:
   marketplaces that trad physical products. Buyers go to the platform mainly for superior efficiency and prices. Sellers use the platform for access to a large market of buyers. Revenues come from commissions and subscriptions (Allibaba.com).
2. Sharing the passion:
   marketplaces facilitate the exchange of physical products. The seller side often pays a commission and enters into a subscription model. Sellers set fixed prices for the products they sell (Vinted).
3. On-demand offline services:
   marketplace matches service firms with consumers. Buyers use the marketplace for free, while sellers pay commission fees (Grab).
4. Serviced by your peers:
   marketplace involve peer-to-peer exchange of services in the physical world. Revenue is generated from both sides (LinkedIn).
5. Online products and services:
   Marketplace offering digital services or products. Professional freelancers use it to earn additional income, selling services a fixed prices. Digital products and other content are offered by independent authors, musicians, and other creators (Apple; services like Apple TV, App Store, etc).
6. Ecosystems of platforms:
   Marketplace that has evolved beyond connecting the original demand and supply sides. The infrastructure of the original platform becomes the foundational later in terms of data and technology to support all platforms in the ecosystem (Apple, Grab).

Question 16

The Platform Shift: High Level Strategic Choices

Answer 16

1. Envision the why
2. Facilitate interactions
3. Attract participants
4. Develop for connectivity
5. Track the right metrics
6. Monetize interaction

Question 17

The Stakeholder Shift: What is it?

Answer 17

Shareholder -> Stakeholder, to maximize returns for shareholders.
o Maximize profit, set quarterly targets, and meet them every time.
o Serving functional and social/emotional needs.
o The Stakeholder business model is designed to create as much value as possible for every stakeholder of the company. The job of the management team is to ensure each and every stakeholder is fully engaged.

Question 18

The Stakeholder Shift: How does it impact the business model?

Answer 18

 Value proposition: ‘one for one’ at the heart of the business model
 Revenue stream: one customer segment funds the model, to provide for another segment in need.
 Key activities: activating people for a good cause
 Customer segment: serves the customer segment that is ignored by other companies

Question 19

The Stakeholder Shift: Patterns

Answer 19

1. Serve the ones in need:
   addresses a need for people that are not being served by the market (Cipla).
2. The boost emerging economies:
   offers consumers and community’s in emerging economies a better future (Unilever).
3. One for one:
   wealthy customer segment buys goods, and the value of the item is given away to customers in need (Toms).
4. Force to do good:
   presents a value proposition that gets people motivated to join the mission of the social enterprise. Companies with a mission to change society (Tony Chocolonely).

Question 20

The Stakeholder Shift: High Level Strategic Choices

Answer 20

1. Create value for all
2. Invest in others
3. Engage everyone
4. Tell stories
5. Measure impact
6. Learn continuously

Question 21

The Circular Shift: What is it?

Answer 21

Lineair -> Circular, Traditional business models exhaust resources to make products that eventually go to waste. Circular business models overcome these limitations. It takes full responsibility for its use of resources and works to ensure that no resource, material, energy, or water is wasted.

These circular business models focus on:
* Design for recycling;
* Product life extension;
* Re-use of products

Question 22

The Circular Shift: How does it impact the business model?

Answer 22

 Value proposition: Repair services are offered to keep the product in good shape. A product can also be taken back, cleaned, repaired, and sold second hand
 Key activities: The product is returned by the customer. The product is broken down to components or materials which are used to make a new product
 Key resources: The waste from the production process of a product is used as input for another production process

Question 23

The Circular Shift: Patterns

Answer 23

1. Use it, not own it:
   Company rents or leases a product to costumers to ensure that the product is used to maximum potential.
2. Use it together:
   Companies provide a platform for customers who own assets to connect with others who borrow those assets from them.
3. Use it longer:
   Companies aiming for the highest quality. Repair instructions or services are offered to keep the product in good shape.
4. Use that by-product:
   The company produces a product for a customer segment. The waste from the production process of that product is used as input for another production process or the waste in itself is a product.
5. Use it again:
   The company produces a product for a customer segment, and the product is taken back from the customer or returned by the customer. The product is broken down to its components of materials, which are used to produce the same product.
6. Use it again, elsewhere:
   The company produces a product for a customer segment. The customer takes it back and the materials are broken down. Theses materials are now used in an entirely different product.

Question 24

Circular Shift: High Level Strategic Choices

Answer 24

1. Adopt a new mindset
2. Be specific about your goal
3. Keep the focus on customers
4. Develop circular skills
5. Work together
6. Celebrate progress

Question 25

The Services Shift: What is it?

Answer 25

o Instead of owning a car, use an app where you can order your ride wherenever you want. Ownership -> service (end of ownership)
o Example: Frist DVD’s which could be rented or ordered -> now we have Netflix. When you want to shift from a product to a service. You must have a different mindset than everyone else in the industry.
o Example: Swapfiets

Question 26

The Services Shift: How does it impact the business model?

Answer 26

 Value proposition: Installation, updates, maintenance
 Revenue stream: Subscription fee
 Key resources: Strong digital capabilities

Question 27

The Services Shift: Patterns

Answer 27

• Consumables, focuses on regular delivery of consumable product that is used on a
  frequent basis
• Services subscription: key to this pattern is constant supply and reliability of core services
• Information based business models often utilise paid subscription packages that provide a premium experience or access
• Rent/ lease: access to the product can be flexibly used; company manages the pool of products
• Managed services: focuses on the JTBD; performance is guaranteed, revenue streams might be fixed or on a shared base

Question 28

Service Shift: High Level Strategic Choices

Answer 28

1. Adopt a services mindset
2. Focus on the job to be done
3. Finance your assets
4. Engage
5. Partner with providers
6. Renew

Question 29

VUCA

Answer 29

Volatility
Uncertainty
Complexity
Ambiguity

Question 30

21st Century Skills 4 Cs

Answer 30

Communication: sharing thoughts, questions, ideas, and solution

Collaboration : working together to reach a goal. Putting talent, expertise and small groups to work

Critical thinking : Looking at problems in a new way, linking learning across subjects and disciplines

Creativity : Trying new approaches to get things done equals innovation & invention