BUSINESS MODEL PIVOTS: How Great Organizations Create and Sustain Competitive Advantage
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It is an illusion to think that our environment is constant, that is, never changing. If the dinosaurs thought like that millennia ago, that must have been a big mistake. Natural environments are open systems and are in a constant state of flux; the business environment is no exception. Consequently, organizations that grow and thrive are once that are adaptive. In today's business parlance, organizations that create and sustain competitive advantage are the ones that "pivot" while maximizing their strengths and opportunities and minimizing their weaknesses and threats. In the Lean Startup method, the concept of "pivot" refers to a transformation or structural change of a part of a business model. Such a pivot is made when a team faces an apparently insurmountable challenge in its environment. In this presentation, the concept of a pivot is liberally applied. Here a pivot applies to a non-problem-focused change in parts of a business model. In other words, pivots are applied here to generate ideas and hypotheses to be field tested especially with a view to disrupting traditional business models. Such pivots are necessary when designing game-changing business models.
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BUSINESS MODEL PIVOTS: How Great Organizations Create and Sustain Competitive Advantage
- 4. World-class Coaching on Applying the Ambidexterity Principle, Strategy Pale7e, and Ambidextrous Leadership Galaxy Ambidextrous Growth Strategist. Dr. Rod King. rodkuhnhking@gmail.com & hAp://businessmodels.ning.com & @rodKuhnKing WHAT WHY HOW WHO PRODUCT/ SERVICE PROFIT MARGIN VALUE PROPOSITION RESOURCES (INPUTS/ PARTNERS) CUSTOMER STRATEGY Job To Get Done (JTGD): ….................................................................... WHY HOW PRODUCT/ SERVICE PROFIT MARGIN VALUE PROPOSITION RESOURCES (INPUTS/ PARTNERS) STRATEGY = PIVOT (Red Ocean Business Model) E: Eliminate … R: Reduce … I: Increase … C: Create … WHAT WHO CUSTOMER LOVEABILITY TESTS q Internal Business Loveability: q External Business Loveability: q Product-Employee Loveability: q Product-Market Loveability: 4Q-Business Model Diamond Rapidly Discover and Solve the Greatest Problems in Communi:es Present (Doing): Red Ocean Business Model Future (To Do): Blue Ocean Business Model
- 21. Examples
- 22. Example 1
- 32. World-class Coaching on Applying the Ambidexterity Principle, Strategy Pale7e, and Ambidextrous Leadership Galaxy Ambidextrous Growth Strategist. Dr. Rod King. rodkuhnhking@gmail.com & hAp://businessmodels.ning.com & @rodKuhnKing WHAT WHY HOW WHO Long-haul air transporta[on High PROFIT MARGIN Flight with ameni>es Staff (Non-union); Diverse Aircra]s High end Passenger DifferenWaWon STRATEGY Job To Get Done (JTGD): Travel from one point to another (inter-city) WHY HOW Short-haul air transporta[on Low PROFIT MARGIN “The speed of a plane at the price of a car” Staff (Union); Standard Aircra]s Low Cost STRATEGY = PIVOT (Red Ocean Business Model) E: Eliminate … hub connec>vity; sea>ng class R: Reduce … price; meals; lounges; waste I: Increase … friendly service; speed C: Create … point-to-point departures How Southwest Airlines Pivoted From the Business Model of the TradiWonal Airlines Rapidly Discover and Solve the Greatest Problems in Communi:es WHAT WHO Inter-city Commuter LOVEABILITY TESTS q Internal Business Loveability: q External Business Loveability: q Product-Employee Loveability: q Product-Market Loveability: Low Future (To Do): Blue Ocean Business Model Present (Doing): Red Ocean Business Model
- 33. Example 2
- 34. World-class Coaching on Applying the Ambidexterity Principle, Strategy Pale7e, and Ambidextrous Leadership Galaxy Ambidextrous Growth Strategist. Dr. Rod King. rodkuhnhking@gmail.com & hAp://businessmodels.ning.com & @rodKuhnKing WHAT WHY HOW WHO How Cirque du Soleil Pivoted From the Business Model of the TradiWonal Circus Rapidly Discover and Solve the Greatest Problems in Communi:es WHAT WHY HOW WHO TRADITIONAL CIRCUS Business Model CIRQUE DU SOLEIL’S Business Model Tradi[onal Circus Show Low Profit Margin (Profitability) High Profit Margin (Loveability) High end Market: • Adults • Corporate • Family • Children “We Reinvent the Circus” “The Greatest Show On Earth” Staff; Animals; Equip- ment Staff; Equip- ment Circus-Theater Experience = PIVOT (Red Ocean Business Model) E: Eliminate … Star performers; Animals; Aisle concessions; Mul>ple show arenas R: Reduce … Fun/Humor; Thrill/Danger I: Increase … Uniqueness of venue C: Create … Theme; Music; Dance; Ambience Low end Market: • Family • Children Blue Ocean Strategy Red Ocean Strategy Job To Get Done (JTGD): Experience live entertainment
- 35. World-class Coaching on Applying the Ambidexterity Principle, Strategy Pale7e, and Ambidextrous Leadership Galaxy Ambidextrous Growth Strategist. Dr. Rod King. rodkuhnhking@gmail.com & hAp://businessmodels.ning.com & @rodKuhnKing WHAT WHY HOW WHO How Cirque du Soleil Pivoted From the Business Model of the TradiWonal Circus Rapidly Discover and Solve the Greatest Problems in Communi:es WHY HOW TRADITIONAL CIRCUS Business Model CIRQUE DU SOLEIL’S Business Model Tradi[onal Circus Show Low Profit Margin (Profitability) High Profit Margin (Loveability) “We Reinvent the Circus” “The Greatest Show On Earth” Circus-Theater Experience = PIVOT (Red Ocean Business Model) E: Eliminate … Star performers; Animals; Aisle concessions; Mul>ple show arenas R: Reduce … Fun/Humor; Thrill/Danger I: Increase … Uniqueness of venue C: Create … Theme; Music; Dance; Ambience Low end Market: • Family • Children Blue Ocean Strategy Red Ocean Strategy Job To Get Done (JTGD): Experience live entertainment WHAT WHO High end Market: • Adults • Corporate • Family • Children Staff; Animals; Equip- ment Staff; Equip- ment
- 36. Example 3
- 38. Example 4