BUSINESS DEVELOPMENTAL

MODELS
Course Code: MBAD16F4200
MBA III - Section B ,EVEN Semester
Prof. Siju Nair
UNIT 4
Business model Innovation
A business model innovation is the conscious change of an
existing business model or the creation of a new business model that
better satisfies the needs of the customer than existing business
models.
Business model innovation objectives:
(1) to satisfy existing but unanswered market needs ,Example : TATA Car
(2) to bring new technologies, products, or services to market,Example
:XEROX
(3) to improve, disrupt, or transform an existing market with a better
business model. Example :IKEA
(4) to create an entirely new market. Example :Google
Factors affecting Business model Innovation for
established organizations

Reactive: Arising out of a crisis with the existing business model

(e.g. IBM in the 1990s)
Adaptive: Adjusting, improving, or defending the existing business
model (Nokia “comes with music,”)
Expansive: Launching a new technology, product, or service
(e.g, iPod/iTunes)
Pro-active/explorative: Preparing for the future
(e.g., Amazon Web Services)
BUSINESS MODEL DESIGN
PROCESS
The business model design process has 5 phases:
Mobilize - Prepare for a successful business model
design project.
Understand - Research and analyze elements
needed for the business model design effort.
Design -Generate and test viable business model
options and select the best.
Implement -Implement the business model
prototype in the field.
Manage - Adapt and modify the business model in
response to market reaction.
(A) MOBILIZE
Activities : - Frame project objectives ,Test preliminary business ideas,
Plan and assemble teams.

Critical factors – Appropriate people ,experience and knowledge.

Key dangers – Overestimating the value of initial idea.

(B)UNDERSTANDING
Activities –This involves the core team immersing themselves into the
customers, technology and environment of the business. Activities
include Scan environment, Study potential customers, Interview
experts, Research what has already been tried, collect ideas and
opinions.
Success factors – Deep understanding of potential target markets,
looking beyond the traditional boundaries defining target markets.
Key dangers - Over researching ,disconnect between research and
objectives, biased research cause of pre commitment to certain
business ideas.
Note : Immersion is a key activity in this phase
(C)DESIGN

Activities – Brainstorm, prototype, test and select.

Critical success factors – co create with people across the organization,
ability to see beyond status quo, taking time to explore multiple
business idea.
Key dangers – Watering down or suppressing bold ideas, falling in love
with ideas too quickly.
(D)IMPLEMENT
Activities – communicate and involve, Diffuse, Execute.
Critical success factors – Best practice project management, ability and
willingness to rapidly adapt the business model, align old and new
business models.
Key dangers – weak or fading momentum.
Diffusion and implementation are two sides of the same coin.Diffusion
is the companywide acceptance of an innovative idea, and
implementation sets up everything needed to develop and utilize or
produce the innovation.
 (E) MANAGE
Activities – scan the environment, continuously assess your business
model, rethink your model, align business models throughout the
enterprise, manage synergies or conflicts between the models
Critical success factors– long term perspective, proactiveness ,
governance of business model.
Key dangers - becoming a victim of your own success , failing to adapt.
Triple Bottom Line Concept
In traditional business accounting and common usage, the "bottom
line" refers to either the "profit" or "loss", which is usually recorded at
the very bottom line on a statement of revenue and expenses.
The triple bottom line (or otherwise noted as TBL or 3BL) is
an framework with three parts: social, environmental (or ecological)
and financial.
An example of an organization seeking a triple bottom line would be
a social enterprise which is in the business of recycling run as a non-
profit, but earning income by offering opportunities for handicapped
people who have been labeled "unemployable", to earn a living
by recycling. The organization earns a profit, which is controlled by a
volunteer Board, and ploughed back into the community. The social
benefit is the meaningful employment of disadvantaged citizens, and
the reduction in the society's welfare or disability costs. The
environmental benefit comes from the recycling process .
Creating a complete Business
Plan
EXECUTIVE SUMMARY
THE TEAM – Management Profile , Why are we a winning team
THE BUSINESS MODEL – Vision,Mission,Values,How our buisness model
works,Value Propsosition,Target Markets,Marketing Plan,Key Resources
and activities
FINANCIAL ANALYSIS – Breakeven Analysis, Sales scenarios and
Projections,Capital spending,operating cost,Funding requirements
EXTERNAL ENVIRONEMNT- The Economy & market analysis , key
trends,competitor analysis,Competitive advantage of business model
IMPELMENTATION ROADMAP – Projects,Milestones,Raodmap
RISK ANALYSIS – Limiting factors and obstacles, Critical Success
factors,Specific risk and counter measures
CONCLUSION
Further topics –what kind if case studies,
Business proposal, business model design