Sunteți pe pagina 1din 82

Business Models Do Fail

10 examples - 5 reasons

www.elton-pickford.com

Introduction Part 1 10 Business Models that Failed Part 2 5 Reasons of Failure Why do Business Models Fail ?
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Business Models do Fail 10 examples - 5 reasons

INTRODUCTION
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Why this paper ?


This document aims at identifying the root causes of Business Model failures. This analysis is supported by several real cases and constitutes a practical ground to explore the utilization of the Business Canvas (Alexander Osterwalder) and the Effervescence Framework (Yannick Mriguet Elton-Pickford). Elton-Pickford is striving to provide organizations with efcient ways to explore new Business Models and publishes regularly case studies on Innovative Business Models. This document counter-balances the regular publications on successful Business Models by exposing failures as business reality too. We are proud to offer you this study which we invite you to share and comment with passion.

Achievement: January 2013

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Publication
This document is provided under the terms of Creative Common License BY-NC-SA. The modication and the distribution of this copyrighted work for noncommercial use only are authorized under the reference: BUSINESS MODELS DO FAIL - 10 EXAMPLES - 5 REASONS. Attribution - Licensees may copy, distribute, display and perform the work and make derivative works based on it only if they give the author (Antoine Dumont and Elton-Pickford) or licensor the credits in the manner specied by these . Noncommercial - Licensees may copy, distribute, display, and perform the work and make derivative works based on it only for noncommercial purposes. Share Alike - Licensees may distribute derivative works only under a license identical to the license that governs the original work.
Achievement: January 2013
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Understand the Elton-Pickford Framework


Copyright Elton-Pickford Effervescence Framework Created by Yannick Meriguet, Associated at Elton-Pickford

BUSINESS MODEL What are the fundamental characteristics of the targeted Business Model? How well do they t the context and scenario specicity & uniqueness? How do they optimize the company strategy?

SCENARIO What are the specic organization objectives (Growth, Performance, Positioning, Differentiation, etc.). What is the internal context of the company (Specic competencies, Tension, M&A, Start Up)? These elements dene the foundation of the targeted strategy.

BUSINESS MODEL

CONTEXT The context highlights the critical elements to take into account in the external context of the company. What are the key market characteristics, socio-economic environment, consumer habits, etc. ? And how can it inuence the Go To Market Strategy of the organization.

SCENARIO OF THE ORGANIZATION

CONTEXT

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Understand the Business Model Canvas


Created by Alexander Osterwalder, Business Model Generation www.businessmodelgeneration.com

KP

KA

VP

CR

CS

KR

CH

Customer Segments (CS) The Customer Segmentsbuilding blockdenes the different groups of people or organization an enterprise aims to reach and serve. Different types of customer Segments exist: mass market, niche market, segmented, etc. Value Proposition (VP) The Value Propositionbuilding blockdescribes the bundle of products and services that create value for a specic Customer Segment. It solves a customer problem or satises a customer need. The Value Proposition can be characterized by its newness, performance, price, etc. Channels (CH) The Channelsbuilding blockdescribes how a company reaches its Customer Segments to deliver a Value Proposition. Channels can be direct or indirect: internet platform, sales forces, store, retailers, etc.

C
www.businessmodelgeneration.com

Customer Relationships (CR) The Customer Relationshipsbuilding blockdescribes the type of relationships a company establishes with specic customer segments. Customer Relationships may be driven by different motivations: customer acquisition, customer retention and boosting sales. We can distinguish between several categories of Customer Relationships: personnal assistance, self-service, cocreation, etc. Revenue Streams (R) The Revenue Streamsbuilding blockrepresents the cash a company generates from each Customer Segment. There are several way to generate Revenue Streams: asset sale, subscription, usage fee, etc.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Understand the Business Model Canvas


Created by Alexander Osterwalder, Business Model Generation www.businessmodelgeneration.com

KP

KA

VP

CR

CS

KR

CH

Key Ressources (KR) The Key Resourcesbuilding blockdescribes the most important assets required to make a business model work. Key Resources can be characterized as physical, intellectual, nancial, human, etc. Key Activities (KA) The Key Activities building block describes the most important things a company must do to make its business model work (development, maintenance, production, etc.) Key Partners (KP) The Key Partners building block describes the network of suppliers and partners that make the business model work. Reasons behind partnering may be diverse: Optimization and economy of scale, acquisition of particular resources and activities, reduction of risk and uncertainty, etc.

C
www.businessmodelgeneration.com

Cost Structure (C) The Cost Structure describes all costs incurred to operate a business model. They can be cost or value driven and be classied as xed or variable costs.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Part 1 10 Business Models that Failed


Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Iridium Copainsdavant.com
Internet 2009 Telecom 1998

2xmoinscher.com
Internet 2012

Spanair
Airlines 2012

Blockbuster Video
Movie rentals 2010

Vogica
Household furnishing 2010

Encarta
Publishing 2009

Kodak
Chemistry, digital 2012

Moulinex
Consumer Electronics 2009

Bic
Perfume 1991

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

1
copainsdavant.com
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

copainsdavant.com
Industry Internet - Social web Date of creation 2001 Corporation Benchmark Group Country of Origin France

Scenario Highlights
First mover advantage Search of protability

Context Highlights
Growing internet usage Nationwide efcient broad band infrastructure Social web growing interest New competitors

Cases period 2001 - 2012 Market type Mass market Revenues (2009) Group : 17 M / Website : 3,5 M Number of Employees (Group) 150

Business Model Highlights


Social network Connect with past friends on internet Freemium / premium

Reasons of Failure
Customer segment not buying a paid service Likelihood of protability Emerging competition

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

copainsdavant.com
Initial value proposition
Created in 2001, "Copains d'avant" is the Facebook made in France, and enable to reconnect with past classmates, publish school promotion pictures and communicate via internal mailing system. The company is quickly becoming the social web leader in France.

Deployed strategy
After 3 years of existence, with a full free access, the company is searching a path to protability. In 2004, the decision is made to monetize the site, and the internal mailing system along with additional functionalities are now provided as a paid service. Facing these new constraints, site frequentation is declining and the brand image of the company is hurt. If the value proposition is still attractive for users, they are not ready to pay for such services. The internal mailing system is the cornerstone of the interaction between schoolmates, and if too much constraints (price) exist, they stop to use it, loosing the benets of the entire value proposition. Things get worst : the growing Facebook platform is penetrating the European market with a modern design, increased functionalities and at no cost for the user.

New pivot
In 2007, the company acknowledges the failure of its business model, and re-open the full service for free. Revenues will be now generated by advertising. Additional services are created, and in 2010 the management of the company is changed and re-think its entire positioning and image.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

copainsdavant.com
BUSINESS MODEL

SOCIAL NETWORK RE-CONNECT WITH PAST CLASSMATES ON INTERNET FREEMIUM / PREMIUM BROAD BAND CONNECTION

INTERNET USAGE PENETRATION FIRST MOVER ADVANTAGE SEARCH FOR PROFITBILITY EMERGING SOCIAL WEB NEW ENTRANTS NATION WIDE EFFICIENT INTERNET INFRASTRUCTURE DEPLOYED

SCENARIO

CONTEXT

FACEBOOK Since 2004

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

copainsdavant.com
KP KA
MAINTENANCE + PLATFORM PROMOTION SOCIAL NETWORK

VP

CR
EMAIL : 1 MILLION PER DAY MASS PERSONALIZATION

CS
MASS MARKET

KR

RE-CONNECT WITH FORMER CLASSMATES

CH
COPAINSDAVANT.COM SALES FORCES

OLD USERS 30 - 40 YEARS 13 MILLIONS OF UNIQUE VISITORS / MONTH

EFFICIENT ADVERTISING SPACE

ADVERTISING ADVERTISING CAMPAIGN

PLATFORM INFRASTRUCTURE HUMAN RESOURCES

R
FREE SERVICE

ADVERTISING*

PAID SERVICE

www.businessmodelgeneration.com

Source :
La Tribune, Le Franais CDA rsiste toujours, october 2010 Capital, Petits meurtres entre amis chez CDA, june 2010 Studio Vitamine, CDA : Nouvelle version bta, february 2012
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

* Since 2007

2
2xmoinscher.com
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

2xmoinscher.com
Industry Internet - Marketplace Date of creation 2001 Group 3 Suisses Country of Origin France

Scenario Highlights
Cost reduction strategy for margin recovery

Context Highlights
Numerous emergent competitors Growing Internet Usage Nationwide efcient broad band infrastructure

Business Model Highlights


Market Place Cases period 2001 - 2012 Market type Mass Market Revenues (2007) 3,3 M Number of Employees (Website) 35 Transaction Markup Buy/sell - Business to Consumers Secured Transactions

Reasons of Failure
Cost reduction program targeting a core activity of the business (Management) Decreasing trafc (Model viability) Emerging competition (Environment)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

2xmoinscher.com
Initial value proposition
Created in 2001, 2Xmoinscher is an internet platform that connect consumers (Buy/sell) along with professional (Sell). Users can buy or sell brand new or second-hand products. During the transaction, 2Xmoinscher is positioned as trusted partner by securing and holding the payment between parties. After the transaction is closed without litige the cash transfer is proceed. The revenue model is based on a transaction fees after completion of the sales.

Competition & investments


While the company is communicated breaking event after 2 years, its facing important economic pressures between 2008 and 2012 generating eventually important nancial losses. In addition, Ebay, PrimeMinister, Amazon, LeBonCoin create a highly competitive market which will knock about the sustainability of the business itself. At the same time, the company has embarked in a cost reduction program and curbed their marketing investments. It will have a huge impact on the site attractiveness, decreasing signicantly the incoming trafc, and the generated revenues. Presence of large xed costs (platform) will lead to a rapid margin erosion and eventually nancial loss. 2Xmoinscher learned the hard way the specicity of a volume business.

Second chance
The customer acquisition cost was becoming superior to the customer Lifetime value, making the business unprotable. In march 2012, the company communicates is going bankrupt, few months later Uncle Henry buys it and plans to re-open the platform the 15th of October 2012. Stay Tune...

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

2xmoinscher.com
BUSINESS MODEL MARKET PLACE BUY / SELL NEW AND SECOND END PRODUCTS Business Model Sustainability is based on sustaining trafc vouching generation of revenues. SECURED TRANSACTION TRANSACTION FEES POSITIONNING AS A TRUSTED PARTNER

REDUCED INCOMING SITE TRAFFIC

EMERGENCE OF SIZABLE COMPETITION COST REDUCTION PROGRAM FOR MARGIN RECOVERY GROWING INTERNET USAGE NATIONWIDE EFFICIENT BROAD BAND INFRASTRUCTURE

DECREASE MARKETING BUDGET

SCENARIO

CONTEXT

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

2xmoinscher.com
KP KA
PLATFORM MAINTENANCE & DEVELOPMENT PLATFORM MARKETING & PROMOTION

VP
SELL / BUY & GENERATE REVENUE BUY HALF THE PRICE (NEW & SECOND HAND PRODUCTS)

CR
TRUST PARTNERS WITH SECURED TRANSACTIONS

CS
MERCHANTS & CONSUMERS

KR
HUMAN RESOURCES

CH
PLATFORM 2XMOINSCHER

BUYERS - MASS MARKET

ADVERTISING HUMAN RESOURCES

TRANSACTION FEES ON COMPLETED SALES

www.businessmodelgeneration.com

Source :
Journal du Net, Fermeture 2xmoischer, march 2012 Tomsguide, 2xmoinscher, Actualit n2888 Journal du Net, Une page se tourne, 2xmoinscher ferme ses portes PC Impact, 2xfoismoinscher fait ses adieux, News n69448

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

3
Encarta - Microsoft
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Encarta
Industry Publishing / digital Encyclopedia Date of creation 1993 Group Microsoft Country of Origin USA

Scenario Highlights
Model viability Differentiation through content quality Multi platform products (CD, DVD, online)

Context Highlights
Improvement of web content in general (site, blog, media etc.) New Competitor enters the market with free content and a collaborative platform

Cases period 1993 - 2009 Market type Mass Market Revenues NC Number of Employees NC

Business Model Highlights


Multimedia Encyclopaedia Rich content of high quality Sales of CDs, DVDs etc. and online access subscription

Reasons of Failure
Protability of products (Model viability) Emerging competition (Environment) Business Model not developed further (Company culture)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Encarta
Initial value proposition
Started in 1993, Encarta proposed a digital Encyclopedia available on multiple technology carriers (CD, DVD, online) and in multiple languages. This product by Microsoft established itself very quickly as the Market leader, competing with its 36'500 articles (2007) against large multimedia corporations.

Change of habits
In 2001, Wikipedia enters the market. The content is created and maintained by the users themselves on a free basis, which continuously improves the quality of the platform. Two years later, this platform overtakes Encarta by the number of articles. As a reaction, Encarta improves the content actuality and proposes a free light access to a limited amount of articles.

Fierce competition
These actions have no impact on the Customers behaviour. In 2009, Encarta has a low market share of 1.27%, against 97% for Wikipedia. At this time, Wikipedia has more then three millions articles in English. As a consequence, Microsoft decides not to continue its business model and exits the Market end of 2009.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Encarta
BUSINESS MODEL
UNIVERSAL MULTIMEDIA ENCYCLOPAEDIA RICH AND HIGH QUALITY CONTENT SALES OF DIGITAL PRODUCTS, SUBSCRIPTION FOR ONLINE ACCESS

35 000 ARTICLES 26 000 MEDIAS

MODEL VAIBILITY REVENUE STREAMS / MANUFACTURING COSTS

IMPROVEMENT OF WEB CONTENT IN GENERAL (SITE, BLOG, MEDIA, ETC.)

HIGH CAPABILITY TO CREATE CONTENT VERY RAPIDLY

SCENARIO

DIFFERENTIATION THROUGH CONTENT QUALITY MULTI-PLATFORM PRODUCTS (CD,DVD, Online)

CONTEXT
ENTRY OF A COMPETITOR WITH A FREE AND COLLABORATIVE BUSINESS MODEL

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Encarta
KP KA
CONTENT PUBLISHING PROMOTION OF THE ENCYPLOPAEDIA

VP
MULTIMEDIA ENCYCLOPEDIA RICH AND HIGH QUALITY CONTENT

CR

CS
MASS MARKET

KR
HUMAN RESOURCES

CH
WEB PLATFORM CD / DVD

HUMAN RESOURCES

SALES OF DIGITAL PRODUCTS SALES OF SUBSCRIPTION FOR ONLINE ACCESS

www.businessmodelgeneration.com

Source :
Premire, Encarta, coul par Wikipdia, ferme dnitivement ses pages, march 2009 NouvelObs, Lencyclopdie en ligne Encarta va fermer, march 2009 Clubic, Microsoft fermera Encarta cette anne, march2009
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

4
Iridium - Motorola
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Iridium
Industry Telecom Services Date of creation 1991 Group Motorola Country of Origin USA

Scenario Highlights
Take over Market leadership Deploy a large scale network Manage the world wide phone network Win a major technological challenge

Context Highlights
Development of competition Alternative emerging Technologies Cost reduction of Telecom infrastructure Rising customer demand

Cases period 1991 - 1998 Market type Mass Market Revenues NC Number of Employees NC

Business Model Highlights


Call from anywhere in the world Terminal sales Subscription sales

Reasons of Failure
Protability of the value proposition (Model viability) Emerging competition (Environment) Technological development (Environment) Project management (Management)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Iridium
Initial value proposition
In 1991, Iridium starts building a mobile phone system which allows communication from anywhere. This system would cover any cities, any agglomerations and any square meter on earth, being at sea, in the jungle, in the mountains. The system, developed by Motorola, bases on an array of satellites displaced around the globe. This phenomenal project costs app. 6bn USD, and includes the launch of 15 rockets and more than 75 satellites. It started its operation in 1998.

Evolution of the technological environnement


During the 8 years of project work, mobile communication developed quickly. Telco operators deployed terrestrial networks, thus covering the main access zones. In parallel, the costs of communication and of acquiring the cell phones have dropped considerably.

Bankruptcy
In 1998, Iridium starts and 9 months later, the company goes into bankruptcy. Customers face technical failures, the product doesnt work in cars or buildings, as the usage is only possible outside, requiring a open connection to the satellite array. Moreover, the value proposition is very costly: access costs 7 USD per minute against 50 cents for a traditional carrier. To this adds the acquisition of the phone for more than 3000 $.

iridium
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Iridium
BUSINESS MODEL

CALL FROM ANYWHERE IN THE WORLD SALES OF PHONES SALES OF SUBSCRIPTIONS Development of terrestrial networks

TO BECOME THE WORLD LEADER ON THE TELECOM MARKET TO DEPLOY A LARGE SCALE NETWORK

RISE OF COMPETITION NEW EMERGING TECHNOLOGIES COSTS DECREASE OF THE TELECOM INFRASTRUCTURE INCREASE IN CUSTOMER DEMAND

SCENARIO

TO MANAGE THE WORLD PHONE NETWORK TO WIN A MAJOR TECHNOLOGICAL CHALLENGE

CONTEXT The initial customer segment is quite restricted. A mass Market is developing shortly after the Launch

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Iridium
KP KA
NETWORK DEVELOPMENT AND MAINTENANCE

VP

CR

CS
MASS MARKET

KR
FINANCIAL RESOURCES 6bn USD PHONE FROM ANYWHERE

CH
TELECOM NETWORKS 75 SATELLITES

NETWORKS & INFRASTRUCTURE 15 ROCKETS 75 SATELLITES

COMMUNICATION: 7$ USD p. min. SALES OF PHONES: 3000$ USD

www.businessmodelgeneration.com

Source :
Libration, Iridium menace de sonner dans le vide, March 2000 Steve Blank, No Business Plan Survives First Contact With A Customer, November 2011 Stphanie Legrand, Mmoire de recherche IAE de Lille, 2000
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

5
Spanair
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Spanair
Industry Airline carrier Transportation Date of creation 1986 Group IEASA (80,1%) - SAS AB (19,9%) Country of Origin Spain

Scenario Highlights
High variable costs Financial tension (debts) Cost reduction strategy based mainly on xed costs Airplane crash in 2008

Context Highlights
High competitive Market New entrants Cost of fuel Security norms & constraints

Cases period 1986 - 2012 Market type Mass Market Revenues (2009) 670 M Number of Employees (2008) 4 000

High Customers sensitivity on security policies

Business Model Highlights


General airplane transportation Main destinations: Spain, Europe, Latin America

Reasons of Failure
Massive increase in fuel costs (Environment) High competitive forces (Environment) Costs reduction with major impact on the main value proposition (Management)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Spanair
A new company
Spanair starts in Spain in 1986. Its rst ights are conducted in 1988. Quickly, Spanair develops to a major player in air transportation in Spain and soon gains a market share of 22%, directly behind the main player Iberia. Even though the main ights are domestical ights, the company proposes European ights with more than 100 destinations. At the end, Spanair transported more than 11 mio. passengers yearly, with more than 200 daily ights. During its whole history, the carrier transported app. 104 mio. passengers.

A high tension Market


After 2000, the air transportation Market becomes more competitive. Notably, new entrants destabilize the market forces through new business models based on low price value propositions. First nancial losses appear here and there. The following years are marked by an important rise of fuel cost, a sensitive key element of the business model, which impacts on the margin dramatically. This second element adds to the already very tense nancial situation of most companies. During Summer 2008, the management starts a cost reduction program aiming at reducing head count by 25%, stopping app. 10 destinations and grounding of 15 airplanes.

The last ight


Meanwhile, new security rules have been introduced, requesting more stringent maintenance procedures and quicker renewal of airplanes. This impacts highly on the x costs situation. On the other hand, consumers are getting more critical, after different air crashes that happened during this period. Many consumers start to look at security & maintenance ranking of the airlines. On August, 20th 2008, ight nbr. 5022 misses the take-off and explodes on the ground. Most passengers die immediately. The following investigations reveal some neglected maintenance elements, showing weaknesses in the maintenance programs, as well as consequential impacts of over aging airplanes. Following this, Spanair looses the main part of its Customer base. A destroyed image and growing debts end in the closure of all activities in Jan. 2012

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Spanair
BUSINESS MODEL

MAJOR DESTINATION : SPAIN, EUROPE, LATIN AMERICA

Fuel Major impact on margin

MAJOR VARIABLE COSTS FINANCIAL DIFFICULTIES, DEBTS FIXES COSTS REDUCTION AIRPLANE CRASH IN 2008

HIGHLY COMPETITIVE MARKET NEW ENTRANTS FUEL PRICE FLUCTUATION CONSTRAINTS THROUGH NEW SECURITY NORMS GROWING CUSTOMER AWARENESS OF SECURITY RULES

Many Spanish and Foreign companies LOW-COST

SCENARIO

CONTEXT

Loss of trust from many customers

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Spanair
KP
AIRPORTS TRAVEL AGENCIES

KA
FLIGHT PROMOTION PASSENGER TRANSPORTATION AIRPLANE MAINTENANCE

VP

CR
REASSURE CUSTOMERS ON FLIGHT SECURITY

CS
INDIVIDUALS PROFESSIONALS

KR
AIR ALLIANCE AIRPLANES (75) PILOTS

QUICK TRIPS TO SPAIN OR ABROAD

CH
TRAVEL AGENCY INTERNET SITE OF SPANAIR

**

FUEL AIRPORTS TAXES AIRPLANE ACQUISITION

AIRPLANE MAINTENANCE HUMAN RESOURCES

SALES OF FLIGHT TICKETS

www.businessmodelgeneration.com

Source :
Le Monde, La compagnie arienne Spanair en faillite, tous ses vols annuls, January 2012, Air Journal, Spanair en faillite, January 2012, Lexpansion, Spanair en faillite, January 2012.
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Eastman Kodak Company


Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Eastman Kodak Company


Industry Chemicals Manufacturing of photographic lms Date of creation 1881 Founder George Eastman Country of Origin USA

Scenario Highlights
Work against Market evolution Reinforce existing business model Introduce as many patents as possible to block the emerging digital Market

Context Highlights
Technology developments strongly enabling digital photography Photography is getting a mass product for individuals Rising customer demand New competitors in phase with changing Customer requirements

Cases period 1930 - 2012 Market type Segmented Markets (Individuals + Professionals) Revenues (1995) 15 Mds $ - (2011) 6 Mds $ Number of Employees (1954) 73 000 - (2011) 7 600

Business Model Highlights


Manufacturing of photographic lms High margins

Reasons of Failure
Change in behaviour: Camera as a consumer good for mass markets (Environment) Technology development: digital revolution (Environment) Strong focus on Margin protection (Company culture)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Eastman Kodak Company


Technological Innovation
In 1880, Georges Eastman, founder of Kodak, invents a special coating machinery that enables the mass production of dry lms for photography. For a hundred years, the company will dominate the world of cinema and photography. Kodak bases the growth strategy on the lm production and generates record sales growth and huge margins (app. 80%). In 1981, Turnover of Kodak achieves 10 bn USD.

Change in Customer requirements


In the early 80s, Kodak invents digital photography. However, the company is not determined to develop further this technological innovation. Management estimates that the latter could be a major threat to the actual activity, the sale of argentic-based lms. The organization got used to very high margin, this for years and years. As a reaction, it tried to protect the existing business instead of satisfying the changing market requirements, thus shifting away from the real changing market.

Collapse
At the end of the 80s, rst competitors enter the market with digital cameras. Between 1990 and 1999, Kodak introduces about 1000 patents in digital photography, but never achieves its nal goals, as digital photography is closer to Electronics than traditional photography. In less than 10 years, the company will reduce workforce by 63000. Handicapped by its own past, Kodak is not able to change direction, and Sony, Canon or Fuji will cause the collapse of Kodak in 2012.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Eastman Kodak Company


BUSINESS MODEL
MANUFACTURING OF PHOTOGRAPHIC FILMS MANUFACTURING OF PHOTO CAMERA app. 80 % VERY HIGH MARGINS

Rise and growth of digital photography

TECHNOLOGY DEVELOPMENT COUNTERACT AGAINST MARKET EVOLUTION PHOTO CAMERA AS CONSUMER GOODS IN A MASS MARKET CHANGE IN CUSTOMER REQUIREMENTS NEW COMPETITORS IN PHASE WITH CUSTOMER EXPECTATIONS

SCENARIO

REINFORCE THE EXISTING BUSINESS MODEL PATENT AS MUCH POSSIBLE IN ORDER TO BLOCK THE DIGITAL MARKET

CONTEXT

Eastman Kodak Company


KP KA
MANUFACTURING OF PHOTOGRAPHIC FILMS

VP
ADDITIONAL PRODUCTS * Printers Ink cartridges Photo papers One-time usage cameras PHOTO CAMERAS PHOTOGRAPHIC FILMS R&D

CR

CS
INDIVIDUALS PROFESSIONALS

KR
PATENTS

CH
WWW.KODAKEXPRESS.COM RESELLER NETWORK

**

C
Source :

HUMAN RESOURCES RAW MATERIAL

HIGH MARGINS

80 %

** ROYALTIES

75% of GB in 2011

www.businessmodelgeneration.com
* From mid 90s ** Commercialization in 2003

www.kodak.fr Le Figaro, Kodak se dclare en faillite, January 2012 Philippe Silberzahn, Fin de Kodak, victime dilemme de linnovateur, January 2012 Knowledge@Wharton, Whats Wrong with This Picture : Kodaks 30-year Slide into Bankruptcy, february 2012
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

7
Blockbuster Video
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Blockbuster Video
Industry Movies rentals Date of creation 1985 Group Echostar Country of Origin USA

Scenario Highlights
Offer a wide selection of movies

Context Highlights
Expansion of internet New comers

Business Model Highlights


Wide selection of movies for rent Cases period 1985 - 2010 Market type Mass market - Individuals Revenues (2002) 5,5 bn USD Number of Employees 48 000 Exclusive offer of new movies for rent Develop stores in residential areas and malls

Reasons of Failure
New usage (environment): illegal downloading, streaming New comers (environment): emerging competitors New technologies (environment): internet, downloading, VOD

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Blockbuster Video
Innovation in services
In 1985, Blockbuster opens its rst movie rental store in Dallas. From VHS tape to DVD, the company will have an exponential growth. In early 90's, the demand is booming. Movie rental allows to compensate the limited TV channels at that time and offers a wide and attracting catalog of movies. 9 years after its creation, Blockbuster will be valued at $ 7.6 billion.

A changing environnement
In mid 2000, new signs of change are emerging in the environment. Customers' expectations are changing and new comers are disturbing the existing market. Competitors appear and offer mail-delivered movie rental with a wider catalog. Technological improvements will also disturb Blockbuster business model. Concurrently to internet development, streaming websites will explode along with all illegal downloading possibilities. In addition, more and more TV channels propose new offers such as video on demand.

An abrupt end
In 2009, Blockbuster creates an automated distribution network to rent movies. The goal of this mass deployment is to come back as a key player. For economic reasons, some shops will be replaced by machines. Despite this, the company led for bankruptcy in 2010. The company left behind more than 6000 franchised and proprietary shops spread over 18 countries representing about 48000 employees.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Blockbuster Video
BUSINESS MODEL
87 million customers + 6000 shops Twenty countries WIDE OFFER OF MOVIES RENTALS NEW MOVIES PROXIMITY WITH RESIDENTIALS AREAS AND MALLS

New usages Illegal downloading Streaming websites

SCENARIO

OFFER A WIDE SELECTION OF MOVIES

INTERNET EXPANSION NEW COMERS

CONTEXT (between 2002 and 2010)

Mail-delivvred rental Video On Demand development

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Blockbuster Video
KP KA
DEVELOPMENT OF THE CONTENT OF THE OFFER DEVELOPMENT OF NETWORK INFORMATION ON USER BEHAVIOUR STUDIOS

VP

CR

CS

KR
48 000 EMPLOYEES DEDICATED DISTRIBUTION NETWORK

WIDE MOVIES RENTAL OFFER

CH
DEDICATED SHOP + FRANCHISES 6 000 SHOPS IN 18 COUNTRIES

INDIVIDUALS 87 MILLIONS OF CUSTOMERS

PRIORITY ON NEW MOVIES

40 % OF TURNOVER DISTRIBUTED TO STUDIOS

INFRASTUCTURE EMPLOYEES

MOVIES RENTAL EXCLUSIVITY ON MOVIES

www.businessmodelgeneration.com

Source :
Le garo, 24 september 2010 ; Financial Times, 24 february2010 ; Le Monde, 17 february 2010 ; Lexpansion, 11 may 2007 ; The Times, 28 february 2010.

* On a dedicated period

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

8
Moulinex
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Moulinex
Industry Manufacturer of small appliances Date of creation 1937 Founder Jean Mantelet Country of Origin France

Scenario Highlights
Financials difculties in 90's Success story and recognizedd brand Worldwide presence

Context Highlights
Bursting of the family unit Development of women's employment Emergence of strong asian competitors Small appliances associated with feeling of pleasure

Cases period 1937 - 2001 Market type Mass Market Revenues (1998) 1,21 Billion Number of Employees (1998) 11 000

Business Model Highlights


Manufacturing of small appliance for women market Mass production and low margin Originally, strong innovation on product

Reasons of Failure
Decrease of product sales with low margin (Business model viability) Emerging competitors (Environment) Financial management (Management)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Moulinex
History of the group
In 1932, Jean Mantelet invents the vegetable mill. Wishing to end by nding lumps in mash potatoes prepared by his wife, he decided to create the famous "Potato Masher" or "PressePure". Manufacturing and distribution of these products are a great success. This new equipment allows solving a shared problem to all housewifes at that time. In 1957, it operates his business under the brand Moulinex. In 1962, appears a strong motto: "Moulinex free women" a period of thirty and mores the beginning of the consumer society. It means liberation of household chores and automation of dedicated tasks. Moulinex will then have huge opportunities to address these new needs. Within only few years, the brand will invent no less than 70 products among which we nd the coffee grinder, the multi-function robot, the iron or the microwave.

Pricing policy
In 1950, Jean Mantelet developed a different pricing strategy from its competitors. Instead of establishing a selling price based on cost price including depreciation of production equipment, he focused on the consumer. His approach is based on the consumer's ability to buy the product by dening a "democratic" price. The entrepreneur looks for a mass production to ensure low costs and a minimum protability.

End of the story


This booming market quickly attractes competitors, rstly european and then asian ones. The market was huge and attracting. The low complexity of products and the low level of maintenance for this type of goods reduced seriously entry barriers. In the 90's starts the decline of the group. A slowdown in gross markets can be explained by the saturation of several customer segments. Sales suddenly collapsed. The emblematic founder died in 1991. It leaved room for internal dissension, mismanagement and a lack of innovation. In an effort of diversication of its products, he company made a major acquisition (Krups) which increased its debts and reduced its exibility. Despite several massive restructuring and merger attempts or capital opening, the French jewel is closed in 2001, September 7th. The brand still exists today. It has been acquired by SEB group together with some French production units.

Worlwide exposure
The exponential market growth allows Moulinex to be located in several countries. At the end 80's, Moulinex products are distributed in more than 135 countries. However, the company activity is largely based in France. Only 20% of the turnover is generated abroad against 40% for SEB, its main competitor.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Moulinex
BUSINESS MODEL IN 1931 BY THE FOUNDER, THE POTATO MASHER

SMALL APPLIANCES PRODUCTS MANUFACTURING MASS PRODUCTION LOW MARGIN STRONG INITIAL VALUE PROPOSITION INNOVATION IN PRODUCTS The increase of singleparent families promote the market growth

FINANCIAL ISSUES IN THE 90S OLD SUCCESS STORY STRONG BRAND

MARKET GROWTH DEPENDS ON HOUSEHOLDS NUMBER INCREASE OF WOMEN EMPLOYMENT DECLINE OF AVERAGE HOUSING SIZE EMERGENCE OF STRONG ASIAN COMPETITORS Looking for time savings in houshold chores

SCENARIO

WORLWIDE PRESENCE 135 COUNTRIES

CONTEXT

Represents only 20% of Moulinex turnover

Decline of storage areas: search for multifunctions products

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Moulinex
KP
RESELLERS NETWORK ADVERTISING AGENCIES

KA
BRAND PROMOTION LOGISTICS DISTRIBUTION MASS PRODUCTION 180 000 UNIT / DAY*

VP
SMALL APPLIANCES EQUIPMENTS

CR
ADVERTISING

CS
WOMEN

KR
STRONG BRAND IMPORTANT REAL ESTATE RESOURCES HUMAN RESOURCES Unskilled labor Mainly women

CH
SMALL APPLIANCES STORES MASS-MARKET RETAILING

135 COUNTRIES

IMPORTANT REAL ESTATE RESOURCES HUMANS RESOURCES

ADVERTISING BUDGET

SELL EQUIPMENTS WITH REASONNABLE PRICE PRESSURE ON PRICE LOW MARGIN 20% OF TURNOVER DONE ABROAD

www.businessmodelgeneration.com
* Production for 16 plants in 1980

Source :
Marketing MagazineN144, Saga Franaise succs, 2010 ; Ministre de lindustrie, Approche sectorielle - lectromnager, 1999 Mmoires dentreprises, Moulinex,1993 OuestFrance, La bataille des millions, 2009 Stratgies, Moulinex se robot que je ne saurais voir, 1998.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

9
Cuisines Vogica
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

VGC Distribution
Industry Furniture fabrication Date of creation 1976 Leadership William Ego Country of Origin France

Scenario Highlights
Financial difculties Strong decline of customer satisfaction

Context Highlights
Economic Crisis Highly competitive environment

Business Model Highlights


Cases period 2000 - 2010 Market type Mass Market Revenues (2008) 107 Million Number of Employees (Groupe) 1 000 Activities unbundling Failure of key partners Customer segmentation (professional / individuals) Important logistics activities

Reasons of Failure
Financial Management (Management) Failure of key partners (Business model execution)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

VGC Distribution
Value proposition
Located in "Les Vosges", VGC Distribution group combines manufacturing and distribution activities of kitchens and bathrooms. After various takeovers and restructuring, the group wants to be one of the key players in this business. With 45 stores located in France, VGC Distribution addresses two different customer segments. On one hand, it offers individuals the construction and installation of custom kitchens. It can also include appliances. On the other hand, it addresses major retailers such as Castorama, But or Brico-Dpt by providing kitchens in kits.

Business model execution


In the early 2000s, the company faced several nancial difculties mainly related to inadequate management choices. The company is forced to leave construction activities. From then relying on Nevelt, a subcontractor that will ensure the production. VGC Distribution will then focus on sales and distribution. VGC sales exceeds forecasts. but having Nevelt not being able to honor all orders, increasing immediately delivery times for end customers. Delivery time initially negotiated to 8 weeks will become several months. In addition, some sets are coming with missing parts which forces VGC to perform installation in several steps. This will increase signicantly logistic costs of the company.

Final closure
Delivery delays and lower product quality caused a growing customer frustration. In addition, VGC Distribution is facing chronic nancial difculties and a major economic crisis. As a result many orders will be canceled. Unable to pay Nevelt, its supplier, the group go into receivership for several months before its liquidation.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

VGC Distribution
BUSINESS MODEL

CONSTRUCTION & ASSEMBLY KITCHEN AND BATHROOM FURNITURE OWN DISTRIBUTION NETWORKS CUSTOMIZED RELATION

FINANCIAL DIFFICULTIES FAILED PARTNER NEGATIVE CUSTOMER REPUTATION DECLINE OF HOUSEHOLD CONSUMPTION STRONG COMPETITION CONTEXT

SCENARIO

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Vogica - VGC Distribution


KP
NEVELT Furniture production

KA
LOGISTIC Routing orders

VP
KITCHEN & BATHROOM CUSTOM ASSEMBY KITCHEN & BATHROOM FURNITURE KIT

CR
PERSONNAL AGRESSIVE BUSINESS PRACTICES

CS
INDIVIDUALS

Appliances Supplier

KR

APPLIANCES under its brand 1982

CH
MANUEST VOGICA 45 stores Delivery within 8 weeks

PROFESSIONALS Castorama Brico dpt But

NEVELT Furniture production

SALES OF FURNITURES Slow margin

SALES OF FURNITURE Strong margin

www.businessmodelgeneration.com

Source :
Le garo, 8 november 2010 ; Hufngton Post, 27 september 2010 ; Usine nouvelle, 28 september 2010 ; Le Point, 9 november 2010.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

10
Group BIC
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

BIC - Perfumes
Industry Consumer products Date of creation 1945 Leadership Bruno Bitch Country of Origin France

Scenario Highlights
Several success stories in marketing of disposable products Financial results of the group Capitalization on distribution network

Context Highlights
Product praised by the public Increase of perfume price Growing competitor products

Cases period 1988 - 1991 Market type Mass Market Revenues (2010) 1.830 Billion Number of Employees (Group) 9 200

Business Model Highlights


Perfume manufacturing and sales Low price Distribution through tobacco shops and bars channel Focus on simple and practical usage

Reasons of Failure
Mistake in distribution channel selection Inappropriate value proposition with customer expectations (VP/CS)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

BIC - Perfumes
Diversity of products
Founded in 1945 by Edouard Buffard and Marcel Bitch, Bic group launches in its rst years the Bic Crysta ball-point pen. Today the group operates worldwide and in more than 160 countries. For almost 60 years, BIC has shown a real ability to diversify its activities and products. To date, the French group produces lighters, razors, and various water sport articles (windsurng, kayak...) in addition to pens. Since 2008, BIC also sells a mobile phone manufactured and distributed in partnership with Alcatel and Orange.

Innovation in products
In 1988, BIC launched its own range of agrances. This perfume is accessible for everyone, used by everyone at any time. Marketing teams rely on the practical side by offering small bottles shaped like lighters that are easily transportable. It also perfectly ts in a pocket or a handbag. Sold for 25 francs (3.5 ) for about 300 sprays, the product comes in 4 colors (red and blue for women, black and green for men). Each perfume targets a specic customer segment or a specic context depending of its avoring composition. After many marketing studies, it was decided to distribute the perfume on a large scale in Europe, USA and several countries in Africa. Leveraging on its large ligther distribution network, the bottles are proposed to the mass market through existing retail shops. In apparence, it seems convenient for the customer to combine the purchase of a lighter with a perfume.

Wrong distribution channel


Three years after the launch, sales didn't take off and BIC ceases its perfumer activity. It appears that the distribution channel was not the right one. Many tests have been carried out on the product and on customer ability to buy. But, conditions and retail environment were not considered. Flagrances are often associated to luxury, good time or even enjoyable olfactoric moments. Tobacconists do not match with this universe. Odors, atmosphere, as well as sellers competences are in total opposition with the selling experience expected by the customer. Actually this is not reecting the real customer perception. In view of the customer, a good fragrance is strongly paired with emotions, and disposable goods (as the other products from BIC are) do not match with this image.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

BIC - Perfumes
BUSINESS MODEL FRAGRANCE SMALL AND PRACTICAL FORMAT EASY TO USE LOW PRICE DISTRIBUTION THROUGH TOBACCONISTS

Perfume for 20 Francs

CAPITALIZATION ON THE DISTRIBUTION NETWORK SCENARIO SUCCESS STORY ON LOW PRICE AND PRACTICAL PRODUCTS GROWING STAGNANT TURNOVER 2,2% DECREASE IN 1987 FINANCIAL RESULTS OF THE GROUP INCREASE OF PERFUME PRICE COMPETITIVE PRODUCTS EAU DE TOILETTE CONTEXT

PRICE INCREASED 66% BETWEEN 1981 AND 1988

NEED TO RENEW
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

BIC - Perfumes
KP
PERFUMER EXPERT

KA
MANUFACTURING PROMOTION

VP

CR
ASSISTANCE IN SALES IN TOBACCO BARS AREAS PRODUCT EXPERIENCE DREAMS

CS

PARTNERS DISTRIBUTORS TOBACCONISTS

KR
MANUFACTURING DISTRIBUTION NETWORK STRONG BRAND

PERFUME: HIGH END PRODUCT

CH
ADVERTISING DISTRIBUTORS TOBACCO BARS

MASS MARKET Male / Female WORLWIDE

SMALL AND PRACTICAL FORMAT BASED ON ITS FUNCTIONALITY

MANUFACTURING

ADVERTISING

LOW PRICE

www.businessmodelgeneration.com

Source :
Bicworld.com, 6 dcembre 2012 ; LObs conomie, Le bide de bic, 17 novembre 1988.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Part 2

5 reasons of failure Why do Business Models Fail ?

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Alignment between Value Proposition and Customer Segment

Missmatch between the Value Proposition and the Customer Segments. The value proposition doesnt answer a real need or doesnt address a real problem of the customer.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Alignment between Value Proposition and Customer Segment


Conict within the Business Model: Inadequate t between Value Proposition and Customer Segment The Business Model is disconnected from the Context
SCENARIO OF THE ORGANIZATION CONTEXT

Value proposition
BUSINESS MODEL

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

1
PC

Alignment between Value Proposition and Customer Segment Fight ! AC PV


Value

RC

SC
Customer segment

RC

proposition

CX

C
www.businessmodelgeneration.com

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Business Model nancial viability

The costs exceed the revenues generated making the business nonprotable. Dont confuse impossible protability with slow return. Example : customer acquisition cost or production cost too high etc.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Business Model nancial viability


Conict within the Business Model : No protability
BUSINESS MODEL

Value proposition Costs > revenues

SCENARIO OF THE ORGANIZATION

CONTEXT

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

2
KP

Business Model nancial viability KA VP


Costs s evenue R !!!!! sesCH Los

CR

CS

KR

Costs

Revenues

www.businessmodelgeneration.com
Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Environmental constraints are not fully integrated with the design of the Business Model

Poor analysis of the environment : competition, technological trends, regulation and economics forces are poorly evaluated. Main environmental changes must be challenged prior to developping new business models.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

3
Environment

Environmental constraints are not fully integrated with the design of the Business Model

Value proposition Costs > revenues


BUSINESS MODEL

NOT integrated

SCENARIO OF THE ORGANIZATION

CONTEXT

Key elements

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

3
nds Technology tre

Environmental constraints are not fully integrated with the design of the Business Model
e ts Financial mark New Entrants

PC

AC

PV

RC

SC

Competition

New customer behaviors

RC

CX

C
www.businessmodelgeneration.com

Globalization

...*

Regulation
* Non exhaustive list

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Business Model Execution

Management team did not focus enough on execution by lack of competencies, poor governance, or low transformation support.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

4
Environment

Business Model Execution


Conict & absence of key competencies within the management team

Value proposition Costs > revenues


BUSINESS MODEL

Management
SCENARIO OF THE ORGANIZATION

CONTEXT

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

4
KP

Business Model Execution

Analysis of the Environment

Identification of opportunities

Business Model Generation

Execution

KA

VP

CR

CS

KR

CH

Management Failure

C
www.businessmodelgeneration.com

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

The goose that lays the golden egg

It is difcult for companies to break old patterns that made them successful in the past. And the temptation is strong to pursue what has worked before. The risk is to look at new opportunities thru the lens of current prots and performance yields.

The management does not take into account the necessity to adapt its business model. It stays unbalanced between a radical shift and incremental improvements.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

5
Environment culture

The goose that lays the golden egg


Organizational culture and past successes doesnt encourage the management to question the real foundation of its current Business Model and new opprtunities for growth.

Value proposition Costs > revenues


BUSINESS MODEL

Management Organizational
SCENARIO OF THE ORGANIZATION CONTEXT

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

5
KP C

The goose that lays the golden egg


Actual profits
KA VP CR CS KP KA VP

Potential profits
CR CS

KR

CH

KR

CH

C
www.businessmodelgeneration.com

www.businessmodelgeneration.com

Actual model

Future model

Very profitable

Less profitable

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Mission
Elton-Pickford is a leading consulting rm specialized in Business Model Innovation. Our customers are large corporations recognizing the necessary investment in Business Model Innovation. We provide premium consulting services and unique experience workshops with a sole objective of improving clients condition. Today, reinventing its business models is not an option anymore. It is a path for a sustainable growth and new performance.

"Elton-Pickford is a facilitator and helps industry leaders to reinvent their business and explore opportunities for growth and new performance".

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Corporate Education
Building leadership in Business Model innovation starts with Education. So, change the rules of the game: Experience a full immersion in design thinking & corporate entrepreneurship and start looking at your business differently.

Business Experiment
Engaging in Business Model Innovation initiative can be challenging for any organization. We believe that the best way to achieve rapid results is to design practical experiences around company strategic concerns. We call them Business Experiments.

Industry watch
We provide organizations with critical insights on innovative business models used in key industries (Industry cases, Industry trends, Spot news)

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Customer voice
You have questions, remarks or suggestions ? Your feedback is important to us, contact us ! You wish to have a live presentation of this document ? Lets meet and discuss ! You wish to access others studies ? Please visit our website and register to our newsletter You wish to know more on how Elton-Pickford can assist you ? Contact us and plan a meeting

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

Paris Ofce
Elton-Pickford 3 rue Chauveau-Lagarde 75008 Paris FRANCE +33(0)9 50 699 646 www.elton-pickford.com

Zurich Ofce
Elton-Pickford DACH Markets Wolleraustrasse 41b 8807 Freienbach SUISSE +41 55 410 14 14 www.elton-pickford.de

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

About the author


Antoine Dumont is associate at Elton-Pickford. He actively participates in the elaboration of the global strategy and development of the business activities.
Crdit photo (c) 2012 Karine Paoli

He is an expert in economic intelligence and conducts regulary missions on this subjects for french Ministries of the Interior and the Defense. Antoine started his career as M&A consultant. He moved as Sales Director in the IT industry where he worked for large industrial and nancial clients (BNP Paribas, Oseo, Saint Gobain, Rieter Automotive). He conducts, on a regular basis, speaking engagements on Business Model Innovation. He contributed to the Blackbook - 10 Innovative Business Models, and wrote several case studies on disruptive Business Models. He followed the Executive Program in Management and Strategy to the ESCP Europe.

Contact : antoine.dumont@elton-pickford.com +33 (0)6 25 55 09 88 @AntoineDmt

Acknowledgements
Peter Keates, Yannick Meriguet, Olivier Gemoets, Franck Louesdon.

Elton-Pickford I Business Model Innovation & Strategy I Business Models Do Fail - 10 Examples - 5 Reasons I 2013

www.elton-pickford.com

S-ar putea să vă placă și