3D Printing Lessons Group #6 Session 5 Cautela, Pisano and Pironti (2014) The emergence of new networked business models from technology innovation: an analysis of 3D printing design enterprises Jamal Armel Alexey Malkov Oriol Sementé Katariina Silander

How the conclusions drawn in the article can be generalized beyond the context of the 3D printing business? How do the conceptualizations made in this article renew traditional business models? Assignment Question:

Agenda Article Highlights and Conclusions Networks and Open Innovation beyond 3D printing Limitations and Further Considerations Conclusion and Summary Renewal of Traditional Business Models - Development of Technologies unlock New Business Models - New Business Models and External Networks - Internet of Things (IoT) - Crowdsourcing Tournaments Review: Open Innovation and Business Models Article Research Process and Study Cases Authors’ Propositions and Article Conclusions - Open Innovation impact in Traditional Business Models - Breakdown of Integrative Value Chains

Article Highlights and Conclusions

Open Innovation Review “A distributed innovation process based on purposively managed knowledge flows across organizational boundaries, using pecuniary and non-pecuniary mechanisms in line with the organization’s business model.” - Chesbrough and Bogers (2014) Van der Zee et al. (2015)

Business Model Review “A business model, …, consists of four interlocking elements that, taken together, create and deliver value.” Chesbrough and Bogers (2014) Johnson et al. (2008) Customer Value Proposition (CVP) Profit Formula Key Processes Key Resources Help customers get an important job done Solve important problem - Fulfill an important need Needed to deliver the CVP in a profitable way That make the the profitable delivery of the CVP on repeatable and scalable How the company provides value for itself while providing value to its customers

Business Model Review “One way to generate a precise customer value proposition is to think about the four most common barriers keeping people from getting particular jobs done: Insufficient wealth, access, skill, or time.” Chesbrough and Bogers (2014) Johnson et al. (2008) “Apple did something far smarter than take a good technology and wrap it in a snazzy design” “It took a good technology and wrapped it in a great business model” “Apple’s true innovation was to make downloading digital music easy and convenient”

Article Research Process “Case studies are rich, empirical descriptions of particular instances of a phenomenon that are typically based on a variety of data sources, … multiple-case studies typically provide a stronger base for theory building” - Yin (2008) Financial Data Evaluation has not been included!

Innovative 3D Printing Technology and Business Model Integration Creative Inputs Crowdsourcing Processes Market Distribution Networks 3D Printing

Innovative 3D Printing Technology and Business Model Integration Network Management Creation of Open Business Models using Crowdsourcing Development of different Distribution Strategies Profitable extensive Product Portfolio Required Dynamic Capabilities Market Management Project Selection New Market Online Design Shops Direct e-commerce New type of Retail Channels Alliances with organized distribution Wide variety of customized and low volume products Community management vs Brand management

New competitive mechanisms based on different business models Development of 3D printing PROMOTES: Services connected with design and creativity Building stable relationships between large-scale manufacturers, incumbent designers and design consulting firms New ventures to have competitive advantage which depends on external networks Article Conclusions Emerging Open business models based on Community and design crowdsourcing New distribution strategies to evolve: e-commerce | Alliance with established distributors | specialized retail channels

Networks and Open Innovation beyond 3D printing

Development of Technologies Unlocks New Business Models Pay as you goAdvertisingFreemiumSubscriptionAdd-OnAuctionShared economy

New Business Models and External Network Large-scale manufacturers Incumbent designers Consulting firms Open, distributed creativity Building competitive advantage depends on external networks

Open Business Model E-Commerce Alliances with established distributors Specialized retail channels Crowdsourcing Open business models In-licencing Scouting Competitions and tournaments Communities New Distribution StrategiesOpen InnovationBusiness Model

The Internet of Things (IoT) is the network of physical objects—devices, vehicles, buildings and other items which are embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data. Internet of Things (IoT)

Internet of Things will enable new business models: -Industrial equipment makers shift from selling capital goods to selling products as services. -Suppliers with “as-a-service” approach. Internet of Things (IoT)

Crowdsourcing Tournaments The process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.

Renewal of Traditional Business Models

Renewing Traditional Business Model New creative ways of idea generation and collaboration Ideation Design Contests Technology Scouting Crowdsourcing New Tools Big dataeCommerceOpen design shops

Breakdown of Integrative Value Chains ConceptionConceptualizationEngineeringProductionSales Companies specializing in Micro-Activities Knowledge Brokers Bridging Ties Collaborative and Open Business Models

Limitations and Further Considerations

 Johnson´s* Business model framework:  Customer Value proposition (CVP)  Profit Formula  Key Resources  Key Processes  Business processes disintegrated  How do open business models affect the value chain and profit formula?  Trade-off between volume and customization  Mass production not possible currently  3D Printing Integration in Manufacturing  Empirical studies  What are the effects/ impact? The profit formula has not been considered → It is crucial when considering the applicability and real-life circumstances. * Johnson, Christensen and Kagermann Reinventing your business model. HBR, December, pp Key Resources should be taken into consideration even more: How does stronger co-creation → Customers are part of the value chain → Co-creation of value in products as well, not only services

With the surge of open source, 3D printing, and with the Internet converging with the Internet of Things (IoT) and a renewable energy internet, we are entering an era in which prosumers produce what they consume and share what they have on a Collaborative Commons. Conclusion Rifkin, J. (2014) The Zero Marginal Cost Society. The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. Palgrave MacMillan

Enrich Service or Product Portfolio Create completely new Business Lines COMPETITIVE ADVANTAGE TECHNOLOGY Collaborative and Open Business Model Summary

Thanks for your attention!

Additional References used  Johnson et al. (2008) – Reinventing your Business Model – Harvard Business Review  Rifkin, J. (2014) The Zero Marginal Cost Society. The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. Palgrave MacMillan  Van der Zee et al. (2015) – Open Innovation in Industry, including 3D printing – European Parliament Study for the ITRE Committee