Course

Year

: EN 001 Entrepreneurship 1
: September 2013

Business Model
Patterns
Session 5
http://arhamvhy.blogspot.com/2011/12/10-foto-kembang-api-terindah-di-tahun.html

Acknowledgement
These slides have been adapted from
Osterwalder, Alexander et al. 2010. Business
Model Generation: A Handbook for
Visionaries, Game Changers, and
Challengers. JWS. New Jersey. ISBN: 9780470-87641-1. Chapter 2.

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Learning Outcome

LO 1: Identify
entrepreneurs
personality and
innovative business
ideas
LO 2: Analyse business
model and business
model patterns

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http://www.alibaba.com/member/id100020104.html

Objectives

Unbundling Business
Model
The Long Tail
Multi Sided Platform
FREE as a Business
Model
Open Business Model

http://fadhlyashary.blogspot.com/2011/12/pengantar-bisnis.html

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Group Assignment for Session 5

Build your interviewed company
Business Model Canvas
The business model consist of a
complete 9 building blocks
Every group member should
understand business model of the
company
Make a draft report. Final report
will be submitted as midterm
exam paper.
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Business Model Pattern

Pattern in architecture is the idea

of capturing architectural
design ideas as archetypal and
reusable descriptions.

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Business Model Pattern

Business models with similar
characteristics, similar
arrangements of business model
Building Blocks, or similar
behaviors is called as business
model patterns.
The patterns help to understand
business model dynamics and
serve as a source of inspiration
with business models
http://www.racetoamillion.ca/2010/12/video-a-couple-of-big-crazy-business-ideas-from-episode-6/

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Business Model Patterns

Types of Business Model Patterns:

Unbundling
Long Tail
Multi-Sided Platforms,
Free Business Model
Open Business Models

www.gpyr.com.au

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Unbundling
Business Model
The concept of the unbundled corporation
holds that there are fundamentally
different types of business: Customer
Relationship business, product
innovation business, and infrastructure
business.
The three types may co-exist within a
single corporation, but ideally they are
unbundled into separate entities in order
to avoid conflict or undesirable trade-offs.

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http://www.chacha.com/quiz/1175/what-s-your-true-age

Three core
Business Types
Product Innovation

Customer Relationship
Management

Infrastructure
management

Early market entry

enable charging
premium price and
acquiring large market
share; speed is key.

High cost of customer

acquisition makes it
imperative to gain large
wallet share; economies
of scope are key

Highly fixed cost make

large volumes essential
to achieve low unit cost;
economies of scale are
key

Battle for talent; low

barriers to entry; many;
small players thrive

Battle for scope; rapid

consolidation; a few big
players dominate

Battle for scale; rapid

consolidation; a few big
players dominate

Employee centered;
coddling the creative
stars

Highly service oriented;

customer-comes-first
mentality

Cost focused; stresses

standardization,
predictability , and
efficiency.

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Unbundling
The Mobile Telco
Mobile telecommunication firms
have started unbundling their
business.
Traditionally they competed on
network quality, but now they are
striking network sharing deals with
competitors our outsourcing
network altogether to equipment
manufacturers
Their key asset is no longer the
network - it is their brand and their
Customer Relationship.
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http://obatherbal-2u.blogspot.com/2013/01/peluang-usaha-mudah-dan-murah.html

Unbundling
The Mobile Telco

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Unbundling The Mobile Telco

Infrastructure Management
Telco such as France telecom, KPN, and Vodafone have
outsourced operations and maintenance of some their
network to equipment manufacturers such as Nokia
Siemens Networks, Alcatel-Lucent, and Ericsson.
Equipment manufacturers can run the networks at lower
cost because they service several telco at a time and thus
benefit from economies of scale.

www.higsigma.com

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Unbundling The Mobile Telco

Customer Relationship
After unbundling its infrastructure business, a telco can
sharpen its focus on branding segmenting customers and
service which are its key asset and its core business.
By concentrating on customers and increasing share of
wallet with current subscribers, it can leverage investment
made over the years acquiring and retaining customers.
On the first mobile telco to pursue strategic unbundling was
Bharti Airtel, now one of Indias leading telco. It outsourced
network operations to Ericson and Nokia Siemens Network
and IT infrastructure to IBM, allowing the company to focus
on its core competency; building Customer Relationship
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Unbundling The Mobile Telco

Content Provider
For product and service innovation the unbundled telco
can turn to smaller, creative firms.
Innovation requires creative talent, which smaller and
more dynamic organization typically do a better job of
attracting.
Telcos work with the multiple third-parties that assure a
constant supply of new technologies, services, and
media content such as mapping, games, video and
music.

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The Long Tail

Business Model
Are about selling less of more
Focus on offering a large number of
niche product, each of which sells
relatively in frequently.
Aggregate sales of niche items can be
as lucrative as the traditional model
whereby a small number of bestseller
account for most revenues

Long tail business models require low

inventory cost and strong plat from to
make niche content readily available to
interested buyers

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www.mediaresearch.ca

The Long Tail

at Publishing Company
Eliminates traditional entry barriers
by providing authors the tools to
craft, print, and distribute their work
through an online marketplace
The more number of authors, the
more it succeeds, because authors
become customers
Thousands of authors use lulu.coms
self service tools to publish and sell
their books
marketing.anchormobile.net

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The Long Tail

at Publishing Company

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The Long Tail

LEGO Factory

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Multisided Platforms
Business Model

Multi-Sided Platforms bring together two

or more distinct but interdependent
groups of customers. Such platforms
are of value to one group of customers
are also present.

The platforms creates value by

facilitating interactions between the
different groups.

A multi-sided platform grows in value to

the extents that it attracts more
users, a phenomenon known as the
network effect.
www.inspiratonfeed.com

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Multisided Platforms
Google

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Multisided Platforms
Google

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Multisided Platforms
Google

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Multisided Platforms
Google

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Free as
a Business Model
one substantial Customer Segment is able to
continuously benefit from a free of charge offer
Different patterns make the free offer possible
Non paying customers are financed by another part of
the business model or by another Customer
Segment

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Free Business Model

Skype

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Open
Business Model
Open Business Model to create
and capture value by systematically
collaborating with outside partners.
This may happen from the outsidein by exploiting external ideas within
the firm, or from the inside-out by
providing external parties with ideas
or assets lying idle within the firm.

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http://paman-guru.blogspot.com/2011/12/betting-game-game-pembelajaran-bahasa.html

Principles
of Innovations
Closed

Open

The smart people in our field work for us

We need to work with smart people both

inside and outside our company

To profit from research and development

(R&D). we must discover it develop it,
and ship it out selves
If we conduct most of the best research
in the industry we will win.
If we can create the most or the best
ideas in the industry, we will win

External R&D can create significant value

internal R&D is needed to claim some
portion of that value
We dont have to originate the research to
benefit from it
If we make the best use of internal and
external ideas, we will win

We should control our innovation

process, so that competitor dont profit
from our ideas

We should profit from others us of our

innovations and we should buy others
intellectual property (IP) whenever it
advances our own interests

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The Connector :
InnoCentive
Companies seeking insights from external researchers
incur substantial cost when trying to attract people or
organizations with knowledge that could solve their
problems.
Researchers who want to apply their knowledge outside
their own seeking attractive opportunities.
That is where a company called InnoCentive saw
opportunity.
InnoCentive provides connections between organizations
with research problems to solve

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The Connector :
InnoCentive

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Group Assignment for Session 6

Evaluate Key Activities
(operational) of interviewed
companies business model
Make a short report

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References
Osterwalder, Alexander et al. 2010. Business Model
Generation: A Handbook for Visionaries, Game
Changers, and Challengers. JWS. New Jersey. ISBN:
978-0470-87641-1.
http://courses.ischool.berkeley.edu/i243/s08/lectures/24
3-07-20080213.pdf
http://www.youtube.com/watch?v=hPVX-zqt3LI