Business model innovation Format: – Online presentation, max. 7 slides and 7 minutes Description: Innovating business models can be a major value driver and allow an organization to significantly outperform the competition. Yet many organizations have difficulty to do so, because business model choices often remain implicit and are not reconsidered for a long time. Step 1: choose an existing digital business. Make sure you choose an example that has enough information about its operations available online. Use the following criteria to choose a company: Company chosen is Namely Inc. mid-size (101-500 employees) operating since at least 2012 annual revenues of between €8M and €800M, or $10M and $1B. industries: healthcare, publishing, human resources Examples are: Doximity (healthcare-US), DrudgeReport (publishing-US), Storyful (Publishing-Ireland), ZipRecruiter (HR-US), MSI Group Limited (HR-UK) Step 2: Using available sources about the company (at least 8), analyze its business model. In your analysis use the Johnson et al. (2008) framework, i.e. specifying: Customer value proposition Profit formula Key resources Key processes Step 3: Now that you analyzed existing business model. (I have some analysis on the company), the task is to come up with an innovative business model design that will improve the company’s competitiveness. Analyze the current business model in light of the five strategic instances that may require business model to change (see Johnson et al. 2008, p. 7) Develop a clear argumentation explaining what limitations of existing business model can be solved through redesign? Come up with a business model innovation and explain the novel business model through the framework of Johnson et al. (2008) Your final description of the Business Model should cover the following elements: Customer value proposition What is the unique, important value that your innovation brings to a specific range of customers. The customers can be those who buy products / services or clients who receive services from public organizations (e.g., citizens of Amsterdam who receive services from City Hall). Try to specify the (new) products or services that your innovation develop or improve. Make sure you have a convincing argument for why such a value proposition is really valuable for the specified customers. Profit formula Having all the above elements in mind, you need to estimate 3 main cost elements that you should cover for implementing your BM and try to have a rough estimate of each cost element for the first 3 years (e.g., you may think of 10 programmers who are full-time, with an annual salary of 40,000 Euro). Next to it, how you are going to gain your revenue and try to have a rough estimate of it for the first 3 year. Then comparing the cost and revenue, estimate your profit for the first 3 years (don’t worry if it turns out to be negative for the first years)! Key activities Specify at least 3 key activities that should be designed and executed in order to develop the value proposition. This can include the design, production, transportation, analysis, and communication activities. Key resources Then specify at least 3 key resources that your company needs to have (or acquire) in order to perform the key activities. Try to be as specific as possible. For example, instead of saying “human resources”, specify which expertise do your employees need? All these elements should be put together and fit with each other and produce a viable business model, so that you can convince external stakeholders (e.g., investors) or internal stakeholders (e.g., managers of the company) to support your Business Model.
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