Business Model Innovation For Brand Growth | Module 1

Introduction

This module is made up of 10 parts, each a video presentation of between 2-8 minutes long. In total there are 45 minutes of video content.

Topics covered:

• How the digital economy is creating unprecedented opportunities and threats and how strategy formulation and executive decision-making needs to change.

• How digitisation is reducing traditional profit pools, and what to do about it.

• What is ‘business model transformation’ and why is it so critical for organisations today (especially incumbents)

• What are the practical considerations in planning business model transformation: impact on strategy, capital allocation, skills, operations, organisational structure.

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

Part 1

A new, more holistic definition of a ‘business model’. Understanding where you are on your growth trajectory - extrapolating forward. The importance of creating an inspiring ‘purpose’ to guide your actions.

How the digitisation of traditional value chains opens up new types of customer value. New opportunities to increase profitability by selling ‘outcomes’ and ‘experiences’ rather than just products and services.

Learning task:

• How could you create more regular and more valuable interactions with customers?

• What sort of ‘outcomes’ or ‘experiences’ could they buy?

• How could you monetise them in new ways?

Digitisation has created a new breed of ‘platform-based' business model that is asset-light with near-zero marginal costs of growth. Exponents with bold strategies are disrupting markets, impacting traditional profit pools.

Learning task:

Map out your top 10 competitors (current and future, traditional and new);

• Which part of the value chain are they attacking?

• Which ones have bold and well-funded new growth strategies?

• Which are leaders and laggards?

• What about you?

Most incumbents are caught in a ‘success trap’: they can’t evolve fast enough and so revert to protecting their existing business. Surveys of C-level execs show considerable concern about the significant risk they now face.

Learning task:

• How fast are you growing today?

• Do your current KPIs constrain or enhance your ability to grow fast?

• Does the organisation focus primarily on short-term efficiencies?

• Are your innovation efforts effective?

• Is your organisation and culture dynamic, open and flexible?

Reset the mental models of your leaders; Envision new ecosystems; Non-traditional capital allocation; Energise your organisation; Widen your appeal (and wow customers). Key learnings from Steve Jobs, Jeff Bezos and Warren Buffet.

Learning task:

• Consider how your leadership team, Board members and main shareholders think about your business model today.

• Which ones think like Steve Jobs and Jeff Bezos, which don’t?

New research demonstrates which types of business models deliver better financial performance. How incumbents can integrate these new models into their existing business.

Learning task:

• How does your Valuation Multiple, Return on Assets, Profit Margin and 3-5 year CAGR compare to current and future competitors?

• Do your leaders understand the economics of digital business models?

Look beyond traditional markets to new ‘white space’ opportunities at the intersection of the physical, digital and biological worlds. The 4th Industrial Revolution is creating an $8 trillion new services market.

Learning task:

• Think laterally and make a list of new, potential ‘white space’ opportunities that you’re not already looking at, and discuss with colleagues.

Examples of how two incumbents dramatically increased their valuations and outperformed traditional competitors by investing in new forms of business model ‘portfolio’.

Learning task:

• Does your company dynamically re-allocate capital each year?

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

• (Watch the more detailed case studies in the Business Model Pioneers section of this course and ask the questions again)

The critical importance of establishing an ‘ambidextrous organisation’: one that can both optimise the legacy and invent the future.

Learning task:

• What proportion of your organisation is focused on optimising the current business model compared to ‘inventing the future’?

• How would you characterise the level of understanding of digital business models in your organisation today?

• What about the skills to implement them?

How to think about becoming a magnet for many more third parties and orchestrate an ecosystem of innovation around you that allows you to add greater value to customers.

Learning task:

• What product or service providers who are complementary to you would your customers be interested in having access to?

• How could you monetise these products/services available without re-selling them?

• What is your level of engagement today with developers and other non-traditional 3rd party partners?

• How open and flexible are your IT systems today?

• How can you set up lightweight stand-alone systems outside of corporate IT?

• Should you build or buy in ‘growth hacking’ support?

You have now reached the end of Module 1: The New Growth Agenda. If you have enjoyed the course so far, you can enrol in Module 2: Platform, Network and Ecosystem Know-How from the Course Catalogue to continue the Business Model Innovation For Brand Growth course.