Transcript Internet + Business = e-business

Université de Lausanne
Ecole des Hautes Etudes Commerciales (HEC)
Table of content
INTRODUCTION
PRODUCT
INNOVATION
EPFL > SHS > March 2006
CUSTOMER
RELATIONSHIP
INFRASTRUCTURE
MANAGEMENT
Internet + business = e-business
CONCLUSION
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Agenda
•
Introduction > Business/IT alignment
– Individual decision > Task
– Organizational behavior > Process
– Business model > Value chain
1. Product innovation and value proposition
2. Customer relationship and distribution channel
3. Infrastructure management and value configuration
•
Conclusion
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INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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Business/IT alignment
Business scope
Distinctive competencies
IT governance
Technology scope
System competencies
IT governance
BUSINESS
Strategic
fit
IT
BUSINESS
strategy
I. TECHNOLOGY
strategy
ORGANIZATION
infrastructure
I. SYSTEM
infrastructure
strategy
infrastructure
Function
integration
Administrative structure
Business processes
Skills
Architecture
Processes
Skills
[Henderson and Venkatraman, 1993]
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INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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Business/IT alignment > individual decision
BUSINESS
USERS
GOALs
TASK
Strategic
fit
Standards
Architecture
…
IT
BUSINESS
strategy
I. TECHNOLOGY
strategy
ORGANIZATION
infrastructure
I. SYSTEM
infrastructure
strategy
infrastructure
Function
integration
APPLICATION
USABILITY
Action
prototyping
Internal/external
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Information
Interaction
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Order fulfilment
Buyer
Consume
SELL
Serve
payment
logistics
Query
information
influence
Negotiate
BUY
goods
Find
customer
Negotiate
payment
Promote
product
Find
source
information
information
Identify
product
Answer
Seller
product
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customer
order
after-sale
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Business/IT alignment > organizational behavior
BUSINESS
UNITs / AGENTs
MISSIONs
Strategic
fit
PROCESS
Standards
Architecture
…
IT
BUSINESS
strategy
I. TECHNOLOGY
strategy
ORGANIZATION
infrastructure
I. SYSTEM
infrastructure
strategy
infrastructure
Function
integration
WORKFLOW
PRODUCTIVITY
Activity
simulation
Intra/inter-organization
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Resource
Coordination
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Business model > definition
• A buzzword with no precise definition?
– […] Executives, reporters and analysts who use the term don't have a clear idea of
what it means. They use it to describe everything from how a company earns
revenue to how it structures its organization
or …
• An artifact aggregating …
–
–
–
–
the value a company offers to one or several segments of customers, and
the architecture of the firm and its network of partners
for creating, marketing and delivering this value and relationship capital,
in order to generate profitable and sustainable revenue streams.
[Linder, 2000]
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Business/IT alignment > Business model
CUSTOMERs
VALUE PROPOSITION
Strategic
fit
VALUE CHAIN
BUSINESS
Standards
Architecture
…
IT
BUSINESS
strategy
I. TECHNOLOGY
strategy
ORGANIZATION
infrastructure
I. SYSTEM
infrastructure
strategy
infrastructure
Function
integration
INFRATRUCTURE
PROFITABILITY
Application
ROI
company/network
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Database
Network
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Business Model > questions
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
VALUE proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
Core capability
Distribution channel
Revenue
Cost
Relationship
 Trust
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
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What are our revenues? Our pricing?
What are our costs?
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Case study > Question
A company …
created in 1997 by Alain Niccod and co
went on-line in 1998
Bon appétit took over 33% of the capital stock in 1999
Logistics center in Bremgarten in 2001
Almost closed down in 2002
Saved in 2003, following an overwhelming solidarity movement among
customers
• Strategic partnership with the No 1 of retail in 2004
• Evolution towards an on-line mall, with other “boutiques” in 2005
•
•
•
•
•
•
•
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Value proposition
1
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
VALUE PROPOSITION
WHO?
HOW?
Value configuration
Customer segment
Partnership
Distribution channel
Core capability
Revenue
Relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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Value proposition > definition
•
To characterize product innovation, the value proposition defines
– the actual product or service, and
– the value or benefits perceived by customers of the products and services offered
by the firm
•
It defines the relationship between
– The performance attributes of products or services
– The fulfillment of needs across multiple customer roles
(acquiring, using, and disposing of products and services), and
– The total cost
[Kambill, 1997]
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Value proposition > examples
•
Facilitate research
– and reduced transaction costs
•
reservation
Speed up distribution
– particularly for digital goods (written, music, image, software)
•
Improve the quality of service
ticketless
– by personalization, for example
•
Improve facility and experience of buying
– capitalizing on ludic aspects
•
Improve the transparency of information
Barcelone
Loterie Romande
– by opening up the information system
•
Develop a sense of community
Yield Management
– and improve the diffusion of knowledge,
contacts and trust
•
Bind complementary products
easyCar
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High-end
COST
Value proposition > cost/performance
Exec jet
Concorde
High-end
Quality, comfort
…
Underperformer
s
market
Major airlines
economy
free
EasyJet
Me-too
Low cost
(frequent flight, on-time schedule, service)
Imitative
innovation
PERFORMANCE
excellence
innovation
[Kambill, 1997]
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Customer segment
2
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
CUSTOMER SEGMENT
Partnership
Distribution channel
Core capability
Revenue
Relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
INTRODUCTION | PRODUCT INNOVATION | CUSTOMER RELATIONSHIP | INFRASTRUCTURE MANAGEMENT | CONCLUSION
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Customer segment > definition
• Categorizations of the population into social class or psychologically
defined groups
• Area where a firm can specialize and gain competitive advantage
– By having lower costs or customer-satisfying differentiation
Market
Large
organization
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Medium
Business
Small
Business
Home User
SOHO
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Distribution channel
3
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
Core capability
DISTRIBUTION CHANNEL
Revenue
Relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Distribution channel > definition
• A channel can be defined as a set of links or a network via which a firm
“goes to market” and delivers its value proposition.
– Owned channels - direct (i.e. Web, phone, fax…)
– Owned channels - indirect (i.e. brand shops)
– Partner channels (intermediation i.e. retail, shops, ...)
• More precisely it defines how a firm is “in touch” with its customers for a
variety of tasks
– Customer Buying Cycle (CBC)
– Customer Service Life Cycle (CSLC)
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The purpose is to make the right
quantities of the right products
or services available at the right
place, at the right time
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Distribution channel > life cycle
Implementation and Use
Training
Monitoring
Maintenance
Troubleshooting
Reverse Logistics (Returns)
Life Cycle Management
Community
Offer (Specification)
Negotiation
Decision
Contract
Order & Order Tracking
Billing & Payment
(Financing)
(Risk taking)
Fulfillment
Advertising
Promotions
Public Relations
Partnerships
AFTER
SALES
PURCHASE
AWARENESS
EVALUATION
Information
Consulting
(&Requirements)
Specification
Testing
(Community)
[Muther, 2000; Ives, 2000]
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Distribution channel > activities
CHANNEL
Awareness
Evaluation
Purchase
After sales
Barnes and Noble
Stores
(Retail)
Promotion of
authors and
books
Reading corners
Coffee shops
Sales person
Cash registry
(cash/credit
card)
Return books
Banners to
books etc.
Search function
Customer review
Critics
Excerpt
Shopping cart
checkout
(Credit card)
Order status
Return books
Transaction
history
Affiliation Network
(Internet)
Specialized
affiliate Websites
Expert
commentaries
Recommendatio
n
Barnes and Noble
University
(Website)
Free online
courses
Courses based
on books etc.
TV, Print, Movies
(Mass media)
Mass advertising
barnesandnoble.co
m
(Website)
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Customer relationship
4
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
Core capability
Distribution channel
Revenue
CUSTOMER RELATIONSHIP
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Customer relationship > customer equity
• Customer Acquisition
– How do we get customers?
– Growing market share
In some mobile firms, customer acquisition costs
had reached almost a quarter of all operating
expenses said Mr Zehle, CEO of
• Customer Retention
– How do we keep customers?
– Nurturing customer loyalty
• Add-on selling
– How do we get customers to buy more?
– Enhancing Average Revenue Per User (ARPU)
[Blattberg, 2001]
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Customer relationship > trust
• Trust and security
Certification
Verification et authorization
Escrow
Notary, payments
Expertise
Guarantee of quality
Rating
Reputation of actors
Insurance
Risk management
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Customer relationship > customization
Listen to the customer
CRM
Make recommendation
Establish configuration
2
Distribution
5
Planing of3production
Production
4a(internal)
ERP
Outsourcing
4b(external)
SCM
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Infrastructure management
ColorMailer
Website
CAPABILITIES
Printing
infrastructure
Packing
staff
value
enables
for
ACTIVITIES
upload
images
Print of
images
Delivery
of items
Marketing
of product
services
PARTNERS
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Business process > integration
Prevision
Planing of
stock
Planing of
capacity
Order planning
Order
confirmation
Replenishment
• flexibilityy
•integration
MRP
choice supplier
Process
Order
processing
Process
Planing of
realization
Availability stock
Scheduling
Process
Stock allocation
order of priorities
• profitable?
• available in the inventory?
• can be manufactured?
Scheduling
manufacturing
Scheduling
distribution
• BPR (business process reengineering)
•INTEGRATION WITH ERP & SCM
Production & assemblage
De-stocking
loading
Planing
delivery
Customer
service
Process
Distribution
• integration with shipping companies
• tracking by the customers
• return of goods
[Kalakota, 2001]
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Core capabilities (resources)
5
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
CAPABILITY
Distribution channel
Revenue
Customer relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
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What are our costs?
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Capability > definition
•
Resource
–
–
–
–
ASSETS
available & useful
in detecting and responding to
market opportunities or threats
• Capability
–
–
–
–
OWN
DO
KNOW-HOW
Repeatable patterns of action in the use of assets
Aptitude to exploit and coordinate resources
to create, produce, and/or offer products and services to a market
[Wallin, 2000]
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Value chain
6
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
VALUE CONFIGURATION
Customer segment
Partnership
capability
Distribution channel
Revenue
Customer relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Value chain > definition
• Set of interdependent activities
– that add value
– for the customers
– to the company products or services
Support activities
infrastructure
Human
resources
Technology
development
Procurement
inbound
logistics
production
Main activities
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outbound
logistics
marketing &
sale
After-sale
Value
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Value chain >
INBOUNT LOGISTICS
OPERATIONS
MARKETING
flow
Custome
r
Packaging staff
Print
flow
Data transfer
to other
customers
share
Pack goods
ColorMailer
Staff
Delivery
network
Buy, receive & stock
material to print on
Activity
Resource
fit
General
delivery
Deliver
ColorMailer
packages
Website
Print
infrastructure
share
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flow
Channel Sony
Data transfer
to ColorMailer
fit
Legend:
share
Image
network
share
SERVICES
Receive
complaints
Market
ColorMailer
Services
Channel Nokia
Upload
image
data
OUTBOUND LOGISTICS
Answer
complaints
share
Call center
By ACTOR
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Value configuration
Value chain
Value network
Value shop
[Stabell, 1998]
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Partnership agreement
7
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
PARTNERSHIP
capability
Distribution channel
Revenue
Customer relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Partnership > Supply chain managment (SCM)
SC
M
product
information
supplier
manufacturer
distributor
seller
buyer
payment
«Bullwhip effect»
[Kalakota, 2001]
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Partnership > e-market
Dutch Flower auction
QuickTime™ et un
décompresseur TIFF(non compressé)
sont requis pour visionner cette image.
E-PROCUREMENT
SCM
[Pinker, 2003]
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Partnership > Alliances
network
Bank
payment
clearance
Credit card
order
Distributor
inventory
deliver
Shipping
sales
Information systems
coordination
contents
sale
transport
tracking
deliver
order
sales
Affiliate
critics
sales
Customer
buy
content
Author
marketing
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Revenue stream
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
capability
Distribution channel
REVENUE
Customer relationship
Cost
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Revenue stream > categories
Mobile:
REVENUE
PRE-PAID
card
one time
combination
Phone
• registry
• subscription
• Usage
sale
• Time
• Services
registry
recurrent
subscription
Income of the subscription fees to become a member
Paid by the buyer and/or the vendor
advertisement
Income of the ad banners posted on the shopfront
Paid by the vendor
use
transaction
Income of online sales paid by the buyer
commission
Income, percentage of a transaction made by the settlement
(affiliate program)
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Profit and cost account
Who are our customers?
How do we reach them?
How do we get and keep them?
What do we offer to our customers?
WHAT?
Value proposition
WHO?
HOW?
Value configuration
Customer segment
Partnership
capability
Distribution channel
Revenue
Customer relationship
COST
HOW MUCH?
How do we operate and deliver?
How do we collaborate?
What are our key competencies?
© 2006 Pigneur
What are our revenues? Our pricing?
What are our costs?
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Profit model
Revenues
Total net revenue
Cost of goods sold
Total Costs of goods sold
Gross margin
Total Costs of goods sold
Operating expenses
research and development
sales and marketing
general and administration
Total operating expenses
Operating income (loss)
PROFIT = (P – VC).Q – FC
P
the unit price of a product
VC
the variable cost of a unit
Q
the number of products sold
FC
fixed costs
Income (loss) before tax
Net income (loss)
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The Business Model Ontology (BMO)
WHO?
HOW?
Partnership
Actor
Relationship
WHAT?
Capability
Configuration
Proposition
Channel
Customer
Needs
requires
Resource
Activity
Cost
Link
Profit
Revenue
HOW MUCH?
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Business model > Bird’s eye view
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A company that defines it’s business model can...
• Understand
– The process of modeling social systems or ontologies–
such as an e-business model – helps identifying and
understanding the relevant elements in a domain and
the relationships between them
• Share knowledge
– The use of formalized e-business models helps
managers communicate and share their understanding
of a business among other stakeholders
• React to rapid change
– Mapping and using e-business models facilitates
change. Business model designers can easily modify
certain elements of an existing e-business model
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A company that defines it’s business model can… (continued)
• Measure
– A formalized e-business model can help identifying the
relevant measures to follow in a business, similarly to the
Balanced Scorecard Approach
• Simulate & learn
– e-business models can help managers simulate
businesses and learn about them. This is a way of doing
risk free experiments, without endangering an
organization
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Business model innovation
• Innovating in one or several of the business model components and as
combining them in new and innovative ways
• Managers and executives had a whole new range of ways to design their
businesses, which resulted in innovative and competing business models in
the same industries.
• Before it used to be sufficient to say in what industry you where for somebody
to understand what your company was doing because all players had the
same business model.
• Today it is not sufficient anymore to choose a lucrative industry, but you must
design a competitive business model.
• In addition increased competition and rapid copying of successful business
models forces all the players to continuously innovate their business model to
gain and sustain a competitive edge.
[Osterwalder, 2005]
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Business model innovation > typology
• Supply-driven innovation
– New way of doing/supplying or new technology
• Demand-driven
– New or changing customer needs
• Similar business model
– Same value proposition
• Extended business model
– Adding new things
• New business model
– New rules of the game …
[Osterwalder, 2005]
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Business model innovation > examples
1. Value proposition
H.
2. Target customer segment
G.
3. Distribution channel
D.
4. Customer relationship
F.
5. Core capabilities
I.
6. Value configuration
A.
7. Partnership agreement
B.
8. Revenue streams
C.
9. Cost structure
E.
[Osterwalder, 2005]
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Questions …
http://www.hec.unil.ch/yp/TALK/slides/SHS_Mar2006.ppt
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