Business Models

Business Model Innovation
Copyright 2006 By InnovationLabs
Langdon Business Model Innovation Morris
by
point of view is worth 80 IQ points

Alan Kay
Chip capacity (Moores Law) ... Use of Fax Machines ... Use of Cell Phones ... Use of Internet Information Excess ... Growth of Human Population ... Consumption of Resources Increasing Pollution
Exponential Change!
2004-11-08
New Scientific Consensus: Arctic Is Warming Rapidly

REYKJAVIK -- The Arctic is warming much more rapidly than previously known, at nearly twice the rate as the rest of the globe, and increasing greenhouse gases from human activities are projected to make it warmer still, according to an unprecedented fouryear scientific study of the region conducted by an international team of 300 scientists.
In 2000, the world had 6.1 billion human inhabitants. This number could rise to more than 9 billion in the next 50 years. For the last 50 years, world population multiplied more rapidly than ever before, and more rapidly than it will ever grow in the future. Anthropologists believe the human species dates back at least 3 million years. For most of our history, these distant ancestors lived a precarious existence as hunters and gatherers. This way of life kept their total numbers small, probably less than 10 million.
Human Population: Fundamentals of Growth Population Growth and Distribution
http://www.prb.org/Content/NavigationMenu/PRB/Educators/Human_Population/Population_Growth/Population_Growth.htm
http://www.de.tomshardware.com/business/20030219/images/17.jpg
http://qsi.cc/blog/archives/cat_finance_economics.html Copyright 2006 By InnovationLabs
Is not the same as how you manage ... here
How you manage
here
You are here*
*Manage accordingly
complexity
complexity
complexity
complexity complexity
complexity
Creative Destruction
Sears 1886 - 2005
Oldsmobile 1897 - 2004
ATT 1885 - 2005
Bethlehem Steel 1857 - 2003
Compaq 1982 - 2002
DEC 1957 - 1998
Netscape 1994 - 1998
Webvan 1998 - 2001
Volvo 1927 - 1999
Chrysler 1925 - 1998
etc., etc., etc. Business Model Innovation
Auto Industry
Sept 8, 2006
Auto Industry Market Share: US Market
1970
1980
1990
2000
hard to do
hard to do
The Prelude: Delphi in Bankruptcy January 1, 2006: 27,500 Unionized Workers January 1, 2007: 7,400 Unionized Workers
The Real Show: GM in Bankruptcy? January 1, 1990: 358,000 Unionized Workers January 1, 2006: 137,000 Unionized Workers January 1, 2010: ??? Unionized Workers
The Past
Traditional Products and Services
Traditional Distribution
supplier
customer
Feed
back
The knowledge channel

Traditional Products and Services
Traditional Distribution
supplier
customer
Feed back
The Knowledge Channel

Exchange of information and knowledge, bi-directional, in real time ... Before the sale, during the sale, after the sale ... Face to face, at a distance, across the internet ...
?
A new Business Model
What does GM need?

what is a business model?

a business is a system
+
technology applied
that occupies a niche in an ecosystem

business model
brand products & services ways of communicating supply chain organization
a business model
creates what customers experience. Those experiences shape the game of business.
A business model describes and how a company is organized and operates to deliver those experiences. Business Model Warfare is intentionally creating customer experiences that result in competitive advantage.
Stagnant Business Models
Innovative Business Models
* Motorola Digital DNA
This is a mobile telephone. This car company is a telephone company.
This is a mobile telephone. This clothing company is a telephone company.
Now available: E-mail
Satellite TV
Internet
This is a portable telephone This airline manufacturer is a telecommunications provider.
A Parable of Business Model Warfare
The difference between success and failure in Venture Capital investing. 10 companies failed. They stayed with their original business model. 10 companies succeeded. They changed their business model.
modeling the market

Transportation Market
High Wealth
Rolls Royce Ferrari
Differentiated/Customized
Lexus Mercedes BMW
Commodity / Mass
GM Ford Toyota Honda
Used Cars Public Transportation
Low Wealth
GM Business Model: 1925 - 1980

High $$
GM
Cadillac Oldsmobile Buick Pontiac
Commodity / Mass
Chevrolet Used Cars Public Transportation
Low $$
GM Business Model: 2006

High Wealth
Hummer Onstar Saab Buick Pontiac GM Finance Cadillac
Commodity / Mass
Chevrolet Saturn Used Cars Public Transportation
Low Wealth
GM Profit: 1975
Making & Financing Selling Cars Cars
GM Profit: 2006
$500 million
Making & Selling Cars
Financing Cars
$2,500 million
Q ui ki e ad a cTm n TI FF( U ncom pessed) dcom pr esor r e s ar e neded t osee t hi pi t ur e. e s c
Profit: 2020?
0 million
Making & Financing Selling Cars Cars
Telecommunications in Cars
$25,000 million
$2,500 million
IBM Business Model 1990

2004
Finance
Software
Finance
Hardware
Software
Services
Services
Hardware
IBM
Industry contraction in recent years has forced IT companies to choose between being high value innovation players or high volume distributors of other peoples intellectual capital. Companies that are caught in middle run the risk of being hammered from both below and above.
IBM is an innovation company.
See also:
IBM PC Division ATT Compaq Sears Levi Strauss K-Mart Oldsmobile Mercury Buick
IBM Annual Report 2004

Modeling the Retail Industry

Quality
Tiffany
Gucci Louis Vuitton
Nordstrom
Macys
Target Dollar Store

Thrift Store Garage Sale
WalMart Sears
eBay
Price
time
Incremental
Breakthrough Product & Technology
Business Model
New Venture
Langdon Morris InnovationLabs Lmorris@innovationlabs.com www.innovationlabs.com

In Summary: Its Confusing to Deal with Change

http://www.funtown.com/sig ns2/pic.jpg
http://www.davesdaily.com/ http://www.wheelsafe.co.za/4b5c8e10.jpg
http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg
New
Business Models
Ahead
Changes
Ahead!
Thank
You!

Business Models

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Business Model Innovation

Copyright 2006 By InnovationLabs

Langdon Business Model Innovation Morris

Copyright 2006 By InnovationLabs

Business Model Innovation

point of view is worth 80 IQ points

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

New Scientific Consensus: Arctic Is Warming Rapidly

Copyright 2006 By InnovationLabs

Business Model Innovation

Human Population: Fundamentals of Growth Population Growth and Distribution

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

http://qsi.cc/blog/archives/cat_finance_economics.html Copyright 2006 By InnovationLabs

Business Model Innovation

Is not the same as how you manage ... here

How you manage

Copyright 2006 By InnovationLabs

Business Model Innovation

You are here*

Business Model Innovation

Sears 1886 - 2005

Oldsmobile 1897 - 2004

ATT 1885 - 2005

Bethlehem Steel 1857 - 2003

Compaq 1982 - 2002

DEC 1957 - 1998

Netscape 1994 - 1998

Webvan 1998 - 2001

Volvo 1927 - 1999

Chrysler 1925 - 1998

Copyright 2006 By InnovationLabs

etc., etc., etc. Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Auto Industry Market Share: US Market

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

The knowledge channel

The Knowledge Channel

Business Model Innovation

What does GM need?

Business Model Innovation

Copyright 2006 By InnovationLabs

Business Model Innovation

what is a business model?