1 Applied Business Development Matti Kaulio Dept of Industrial Economics and Management Royal Institute of Technology Stockholm, Sweden Phone: Fax: /10/15 - M. Kaulio -

Customer Value… Coffe beans (from producers)<0,01 /cup Roasted, branded & packaged4 EUR/kg One cup of coffe (Machine)1 EUR/cup ”Latte” in Stockholm city3,5 EUR Espresso Piazza San Marco, Venezia14 EUR /10/15 - M. Kaulio -

2009/10/15 - M. Kaulio -

Red vs Blue Ocean Competing in existing markets Beat the competition Exploit existing demands Make the value-cost trade-off Align the whole system of a firm’s activities with the strategic choices of differentiation or cost Create uncontested market spaces Make the competition irrelevant Create and capture new demands Breake the value-cost trade-off Align the whole system of a firm’s activities in pursuit of differentiation and cost /10/15 - M. Kaulio -

Blue Ocean Strategy Red vs Blue Ocean Unit of Analysis: –Company –Industry –Strategic Move Value Innovation vs Technology Innovation vs Market Pioneering Market conditions can be created Tools for business development 2009/10/15 - M. Kaulio -

The Four-Actions Framework A new value curve Reduce Which factors should be reduced well below the industry’s standards Create Which factors should be created that the industry has never offered? Raise Which factors should be rasied well above the industry’s standards? Eliminate Which of the factors that the industry takes for granted should be eliminated? /10/15 - M. Kaulio -

Make a Four-action-framework analysis of: –Skype (2 groups) –Spotify (2 groups) –Iphone (1 group) –Ipod (1 group) /10/15 - M. Kaulio -

Eliminate Raise Reduce Create

Eliminate Raise Reduce Create

Eliminate Raise Reduce Create

Cross Case Analysis 2009/10/15 - M. Kaulio -11

Revenue Models Producer model Broker model Consultancy model Performance-based model The TelCom model/combination model (fixed cost + opening cost + variable cost; opening fee + downloaded data) The TechTrade model: Licenciering + royalty The ”Gilette” model The ”Drug Dealer” model The ”Gore-Tex model” The ”Adobe” model The ”Singer” model Internet Advertisment model The Construction Industry model

”The Elevator Pitch” For (target customer) Who are dissatisfied with (the current market alternative) our product/service is a (new product category) that provides (key problem-solving capability) Unlike (the product/service alternative) We have assembled (key whole product/service features for your specific application) Moore, p 149

If Nestlé can …. 2009/10/15 - M. Kaulio -