UNPUB Business Model Innovation For Brand Growth | Module 4

Introduction

This module is made up of 10 parts, each a video presentation of between 2-8 minutes long. In total there are 50 minutes of video content.

Topics include:

• How to re-allocate capital towards a better mix of business models.

• What are the main types of ‘business model’ and which perform best (in terms of valuation, growth rates, ROA, profit margins)

• Why is the current approach to corporate capital and resource allocation not delivering the results it could, and how to think differently about your assets

• How to create a new business model portfolio than can deliver greater value (to customers, partners and shareholders)

There are some additional reading materials and a recommended ‘learning task’ to undertake after each video.

Module 1: Agenda & Context

Capital re-allocation is one of the best ways of turning a new strategy into action. Recap of the key principles of Business Model Transformation and intro to the key 6 steps to a more powerful business model ‘portfolio’.

Learning task:

• Consider how joined-up and integrated your corporate, digital, financial and IT strategies are today?

• Where does your company allocate capital and resources today?

• Is it able to dynamically re-allocate?

• What different types of business model do you operate today?

• Re-consider your own ‘incumbent’s dilemma’

The increasing importance of intangible assets and ‘Relational Capital’ in driving enterprise value. Different business models deliver different financial performance. How ‘Digital Masters’ combine business model types within synergistic portfolios.

Learning task:

• How much do intangible assets contribute to your enterprise value (or product or BU value)?

• What sorts of intangible assets do you leverage today and how? In what new ways could you leverage more?

How do traditional incumbents compare with Digital Masters and BM Pioneers? What advantages can incumbents leverage, what are the key gaps in capability that need filling?

Learning task:

• Write down your key assets (tangible and intangible) and capabilities (real and potential) and strengths and weaknesses and map them against current (and future) competitors?

• How do you rate today?

How to think about investing to both invent the future and optimise the core, understanding the 10 Platform Strategies. New metrics that drive business model performance. Deep dive into how Naspers manages its portfolio.

Learning task:

• Find out from how much ‘capital’ (in terms of money, time, people) is invested in platform-based business models and inventing the future.

• What metrics drive the company today?

• What are the 3 key lessons you can learn from the Naspers example?

Impact of creating synergies across the business model portfolio, rather than just diversifying. Importance of investing heavily in new skills and new digital services. Need to engage shareholders carefully.

Examples: ProSiebenSat (e-commerce + content) and Softbank ($100bn investment fund).

Learning task:

• How far does your current portfolio create new synergistic ‘growth flywheels’ like Amazon?

• How much is your firm investing in new skills and digital products and services compared to your current (and future) competitors?

• If you have an R&D function or a corporate VC arm, how far are they investing in platforms specifically? What are the constraints?

Why and how to map your investments in terms of relative marginal costs of growth and Return on Invested Capital risk. 6 Key questions to ask about the strength of your portfolio and how to spot new ‘white space’ opportunities.

Learning task:

• Plot your activities and investments (current and planned) on the matrix and reflect on how this impacts your overall performance.

How Apple leveraged 3rd parties to drive demand for its core products and de-risked its portfolio with investments in software and services.

Learning task:

• What are the 3-5 lessons your company can take from this example?

How Amazon has created rich synergies between all its activities which has allowed it to de-risk new bold moves.

Learning Task:

• What are the 3-5 lessons your company can take from this example?

Importance of modelling the impact of platform business model investment on overall growth rates and valuation, to attract management and shareholder attention. Examples of a bank and a services company. Criticality in investing much more heavily in an ‘invent the future’ unit (with power and prestige).

Learning Task:

• Look at the growth rates and Price-Sales Ratios of platform companies, map the potential evolution of your business model portfolio, and make some estimates about impact on key financial metrics. Use as ‘strawman’ to discuss with finance department and other colleagues.

A 10 point check-list to help you and colleagues design a BM portfolio that can move the valuation needle. Step One: educate leaders on the economics of digital business models.

Learning Task:

• Check your current status against the list, share and discuss with colleagues, find an executive sponsor and work where to start in terms of addressing the gaps.

You have now reached the end of Module 4: The New Hybrid Business Model Portfolio. If you have enjoyed the course so far, you can enrol in Module 5: How To Kickstart A Business Model Transformation from the Course Catalogue to continue the Business Model Innovation For Brand Growth course.