1. © Copyright 2006 By InnovationLabs Business Model Innovation Business Model by Langdon Morris Innovation

2. © Copyright 2006 By InnovationLabs Business Model Innovation models why ?

3. © Copyright 2006 By InnovationLabs Business Model Innovation “point of view 80 IQ points” is worth Alan Kay

4. © Copyright 2006 By InnovationLabs Business Model Innovation

5. © Copyright 2006 By InnovationLabs Business Model Innovation

6. © Copyright 2006 By InnovationLabs Business Model Innovation Chip capacity (Moore’s Law)... Use of Fax Machines... Use of Cell Phones... Use of Internet … Information Excess... Growth of Human Population... Consumption of Resources … Increasing Pollution … Exponential Change!

7. © Copyright 2006 By InnovationLabs Business Model Innovation 2004-11-08 New Scientific Consensus: Arctic Is Warming Rapidly REYKJAVIK -- The Arctic is warming much more rapidly than previously known, at nearly twice the rate as the rest of the globe, and increasing greenhouse gases from human activities are projected to make it warmer still, according to an unprecedented four- year scientific study of the region conducted by an international team of 300 scientists.

8. © Copyright 2006 By InnovationLabs Business Model Innovation Human Population: Fundamentals of Growth Population Growth and Distribution In 2000, the world had 6.1 billion human inhabitants. This number could rise to more than 9 billion in the next 50 years. For the last 50 years, world population multiplied more rapidly than ever before, and more rapidly than it will ever grow in the future. Anthropologists believe the human species dates back at least 3 million years. For most of our history, these distant ancestors lived a precarious existence as hunters and gatherers. This way of life kept their total numbers small, probably less than 10 million. http://www.prb.org/Content/NavigationMenu/PRB/Educators/Human_Population/Population_Growth/Population_Growth.htm

9. © Copyright 2006 By InnovationLabs Business Model Innovation http://www.de.tomshardware.com/business/20030219/images/17.jpg

10. © Copyright 2006 By InnovationLabs Business Model Innovation http://qsi.cc/blog/archives/cat_finance_economics.html

11. © Copyright 2006 By InnovationLabs Business Model Innovation How you manage here Is not the same as how you manage... here change gap

12. © Copyright 2006 By InnovationLabs Business Model Innovation You are here* *Manage accordingly

13. © Copyright 2006 By InnovationLabs Business Model Innovation complexity complexity complexity complexity

14. © Copyright 2006 By InnovationLabs Business Model Innovation Bethlehem Steel 1857 - 2003 ATT 1885 - 2005 Sears 1886 - 2005 Oldsmobile 1897 - 2004 Compaq 1982 - 2002 Creative Destruction Volvo 1927 - 1999 Webvan 1998 - 2001 DEC 1957 - 1998 Netscape 1994 - 1998 etc., etc., etc. Chrysler 1925 - 1998

15. © Copyright 2006 By InnovationLabs Business Model Innovation Auto Industry

16. © Copyright 2006 By InnovationLabs Business Model Innovation Sept 8, 2006

17. © Copyright 2006 By InnovationLabs Business Model Innovation 1970 Auto Industry Market Share: US Market 199020001980

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19. © Copyright 2006 By InnovationLabs Business Model Innovation hard to do ?

20. © Copyright 2006 By InnovationLabs Business Model Innovation hard to do ? The Prelude: Delphi in Bankruptcy January 1, 2006: 27,500 Unionized Workers January 1, 2007: 7,400 Unionized Workers The Real Show: GM in Bankruptcy? January 1, 1990: 358,000 Unionized Workers January 1, 2006: 137,000 Unionized Workers January 1, 2010: ??? Unionized Workers

21. © Copyright 2006 By InnovationLabs Business Model Innovation customer supplier Traditional Products and Services Traditional Distribution The Past Feed back

22. © Copyright 2006 By InnovationLabs Business Model Innovation customer supplier Exchange of information and knowledge, bi-directional, in real time... Before the sale, during the sale, after the sale... Face to face, at a distance, across the internet... The Knowledge Channel The knowledge channel Traditional Products and Services Traditional Distribution Feed back

23. © Copyright 2006 By InnovationLabs Business Model Innovation ? What does GM need? A new Business Model

24. © Copyright 2006 By InnovationLabs Business Model Innovation

25. © Copyright 2006 By InnovationLabs Business Model Innovation model? what business is a

26. © Copyright 2006 By InnovationLabs Business Model Innovation brand technology applied products & services ways of communicating supply chain b u s i n e s s m o d e l + organization a business is a system that occupies a niche in an ecosystem

27. © Copyright 2006 By InnovationLabs Business Model Innovation a business model A business model describes and how a company is organized and operates to deliver those experiences. … creates what customers experience. Those experiences shape the game of business. Business Model Warfare is intentionally creating customer experiences that result in competitive advantage.

28. © Copyright 2006 By InnovationLabs Business Model Innovation Innovative Business Models Stagnant Business Models

29. © Copyright 2006 By InnovationLabs Business Model Innovation This is a mobile telephone. This car company is a telephone company. * Motorola Digital DNA

30. © Copyright 2006 By InnovationLabs Business Model Innovation This is a mobile telephone. This clothing company is a telephone company.

31. © Copyright 2006 By InnovationLabs Business Model Innovation Now available: E-mail Satellite TV Internet This is a portable telephone This airline manufacturer is a telecommunications provider.

32. © Copyright 2006 By InnovationLabs Business Model Innovation A Parable of Business Model Warfare 10 companies succeeded. They changed their business model. 10 companies failed. They stayed with their original business model. The difference between success and failure in Venture Capital investing.

33. © Copyright 2006 By InnovationLabs Business Model Innovation modeling the market

34. © Copyright 2006 By InnovationLabs Business Model Innovation Differentiated/Customized Commodity / Mass High Wealth Low Wealth Used Cars Rolls Royce GM Ford Toyota Honda Public Transportation Lexus Mercedes BMW Transportation Market Ferrari

35. © Copyright 2006 By InnovationLabs Business Model Innovation Differentiated/Customized Commodity / Mass High $$ Low $$ Chevrolet Pontiac Buick Oldsmobile Cadillac GM Business Model: 1925 - 1980 Used Cars Public Transportation GM

36. © Copyright 2006 By InnovationLabs Business Model Innovation Differentiated/Customized Commodity / Mass High Wealth Low Wealth Chevrolet Pontiac Buick Saturn Cadillac GM Business Model: 2006 Saab Hummer Onstar GM Finance Used Cars Public Transportation

37. © Copyright 2006 By InnovationLabs Business Model Innovation GM Profit: 1975 Making & Selling Cars Financing Cars

38. © Copyright 2006 By InnovationLabs Business Model Innovation GM Profit: 2006 Financing Cars Making & Selling Cars $500 million$2,500 million

39. © Copyright 2006 By InnovationLabs Business Model Innovation Profit: 2020? Tele- communi- cations in Cars Financing Cars 0 million $2,500 million Making & Selling Cars $25,000 million

40. © Copyright 2006 By InnovationLabs Business Model Innovation IBM Business Model Services Finance Software Hardware 2004 Services Finance Software Hardware 1990

41. © Copyright 2006 By InnovationLabs Business Model Innovation IBM “Industry contraction in recent years has forced IT companies to choose between being high value innovation players or high volume distributors of other people’s intellectual capital. Companies that are caught in middle run the risk of being hammered from both below and above. “IBM is an innovation company.” IBM Annual Report 2004 See also: IBM PC Division ATT Compaq Sears Levi Strauss K-Mart Oldsmobile Mercury Buick

42. © Copyright 2006 By InnovationLabs Business Model Innovation Quality Price Macy’s Target eBay Garage Sale WalMart Dollar Store Tiffany Sears Modeling the Retail Industry Thrift Store Service Threshold Louis Vuitton Gucci ? Nordstrom

43. © Copyright 2006 By InnovationLabs Business Model Innovation IncrementalBreakthrough Product & Technology Business Model New Venture time

44. © Copyright 2006 By InnovationLabs Business Model Innovation Langdon Morris InnovationLabs Lmorris@innovationlabs.com www.innovationlabs.com

45. © Copyright 2006 By InnovationLabs Business Model Innovation http://www.wheelsafe.co.za/4b5c8e10.jpg http://www.davesdaily.com/ http://www.funtown.com/sig ns2/pic.jpg It’s Confusing to Deal with Change … In Summary:

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47. © Copyright 2006 By InnovationLabs Business Model Innovation http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg New Business Ahead Models

48. © Copyright 2006 By InnovationLabs Business Model Innovation http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg ChangesAhead!

49. © Copyright 2006 By InnovationLabs Business Model Innovation http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg ThankYou!