Conducting a detailed business plan can be a daunting task, a waste of resources should not be the last to be applied, so that before arriving at the same worth using the definition of business model as design support to exploit the innovation, and raise their progress – learning – towards the final Business Plan. A complete business model will indicate the description of everything you need for the generation of value – to the outside for customers and inward in the form of profits of the organization.
Any way to expose a business model may be valid, but we to propose a framework to help make business models, and, above all, facilitate innovation. The business model would consist of five basic modules – Clients, value proposition, value chain internal and People Benefit Formula – for suggested minimum characteristics should include but not be compartmentalized, but should any possible interactions between two or more of them.
Building the Business Model should be approached with complete flexibility. It must be built with all the elements or key features, differentiating, novel and indispensable. Ultimately, what matters is the successful implementation of innovation. Using the proposed framework, the modules contain basic information relevant to one or more sub-modules, and in general everything to help your best definition, compression and application. The customers are defined customer groups – segments – and which means each of them: Task-to-perform and results they want to achieve. In the case of business model innovation are equally important clients not with the barriers for those who can not deal with a task-to-do . The value proposition requires at least describe the solution or solutions to them proposes to the client groups. It’s the place to describe the experience complete customer history that will live throughout the entire cycle of the product. The area of interaction being the value proposition and customers raises the possible occurrence of sub- modules, usually relating to marketing, sales, such as loyalty or customer relations , the distribution channels , or Sales , etc.. They may also appear, as appropriate, others such as after-sales care , Cross Selling , etc. The internal value chain will be defined as to “produce” and move each group of customers the solution appropriate to the experience of their Experience with the product. You can count on the definition of some key processes , which are required for some activities more about resources and how to proceed in the organization reflected in its Rules, Regulations and Metric operation. Zara is a chain of Spanish fashion stores belonging to the group Inditex founded by Amancio Ortega. Zara remodeled almost every element of its business model and became a world leader in fashion. It started with a first Zara store opened in 1975 in La Coruna, northern Spain. Guided by emotional outcomes (personal and social) of the Task-to-do by their customers, was raised to create “immediate fashion” – clothes that can be designed and released faster than the appearance of the application itself.
Instead of trying to reduce costs by designing clothing collections in batches by season and subsequent mass mailing, Zara has invested in advanced automated systems to seamlessly integrate its retail, inventory and design processes. It was built advanced communications system that has made store managers and observers of trends has been linked to the designers of the house. Manufactures most of their clothes locally and has built a transport system “just in time” capable of transporting goods to all the stores twice a week. With this operation efficient and adaptable, Zara can deliver new market trends not 15 months after they are designed, not even 15 weeks later, but in just 15 days, earning higher margins per unit by meeting the demand for more accurate of its global customers and higher profits through higher inventory turns.
The benefit formula , or as it will generate cash flows so that result in profits for the organization, would have a definition of the Income – volume, unit price, inventory turnover, etc.. – A cost structure – costs per unit, fixed, variable, etc .-, a cash flow – a series of entry and exit of funds, balance point, and so on. The internal value chain is essential to generate the proposal value , with which it presents a clear zone of interaction – this could be logistics, for example, as shown by the example of Zara. Normally there will be no direct interaction between the internal value chain and customers , as any interaction with them has to associate an element that passes the value proposition. However, the other modules of the business model can interact and sub-modules with internal value chain, for example may be a key provision of our solution through a proposed subscription, which can interact with the Formula of charity and this internal value chain . Better Place is a company based in Palo Alto, California, which has focused on the challenge of making an electric car is as comfortable and affordable as a gasoline powered car.
Better Place does not focus on cars, but the results users want to drive an electric car, minding there ensure that electric cars are attractive to consumers, creating an infrastructure for electric cars made by points charging, battery exchange stations, software and network management. Using a similar model to the sale of mobile phones, the company intends to use the margin between electricity costs and what people pay for fuel to subsidize heavily the cost of new electric cars, for that are cost competitive with current cars. He intends to sell to consumers, “miles” in the same way electricity they buy mobile phone minutes, offering a range of subscription plans designed to appeal to different segments of driving; great travelers, city drivers, and so on.
All modules interact with a business plan with the benefit formula . For example, to secure this benefit formula have defined the competition lock – as we will get not copy or exceed our business model. The People of the organization will be doing the implementation possible in reality. You can set the team leader of the project or equipment and persons key, and key aspects of the processes of motivation , incentives and promotion . The framework for creating business models often do not include this module, but it is people that make the whole business model works. Innovation (and success) begins and ends on the users (customers) of the same. Similarly, the successful operation of the organization begins and ends with the talent of the people who make it, from the work they do every day to its ability to project the future with improvement. There is also the interaction of persons with All main modules of the business model. For example, somewhere in our business model may be a need for strategic partners , other people or organizations that contribute to the success of the business. The company Tata Motors will focus on overcoming the financial barriers to see how they moved the families in India, which was raised to produce a car so affordable so that it becomes a viable alternative for Indian consumers who currently use scooters to transport entire families.
To compete with motorcycles, Tata needs to sell a car for only $ 2,000, which means designing a way to make a profit with a dramatically lower unit margins. Tata’s car for $ 2,000, the Nano, which offset lower margins by coupling large sales volumes and a dramatically lower cost structure. Has been guided by some creative ideas to reduce costs: reducing the number of car parts and predominantly in manufacturing outsourcing, limiting the number of suppliers, and experiment with modular components to send to their dealers for final assembly. The business model needs to check the feasibility of successful implementation, make a rapid prototyping business model, both to verify its feasibility ultimately to improve their performance. As an example, a quote from the foreword by John Seeley Brown, the book ” Open Innovation “by Henry Chesbrough:” Therefore, as an aspect to innovate innovation, we must find ways to experience not only with product innovation in itself, but also new business models. Rapid prototyping of business models is critical to the future of technological innovation, and Henry Chesbrough makes it a central element of the strategy of “open innovation” of this book. ” Experience with rapid prototyping business model will the learning required of any new business creation, advancing in the cohesion of the team’s talent , to test the ability to generate profits before focusing resources on growing the business.