Archive for the ‘business model’ Category

The Maribor Golden Fox Skiing World Cup competition was attended by more than 20 thousand fans last Sunday. The reason that it attracted more spectators than any Slovenian football match in the last year was Tina Maze, who holds the lead  in the overall World Cup Ski Competition for women 2012/13. Tina has ascended the winners’ podium more than 20 times in all disciplines of Alpine skiing 2012/13.

Slovenian alpine skier Tina Maze at the bib dr...

Slovenian alpine skier Tina Maze at the bib draw for the Giant Slalom in Semmering (Austria) on 28 December 2010. (Photo credit: Wikipedia)

Tina Maze is a business model built on a small team, consisting of Andrea Massi (head coach), Livio Magoni (coach), a masseuse, and a servicer. The team has turned down technical assistance from the Ski Association of Slovenia, but they are still allowed to operate under the auspices of the Slovenian team. Her excellent coaches are able to focus Tina’s attention only on the next challenging turn of each slope They have ensured that she is in top form, both physically and mentally ready.
Excellent results also encourage sponsors who want the many  thousands of spectators at competitions to see that Tina wears their brands or uses their products. Tina has also made her debut as a singer, and her enthusiasm and performance are the equal of many professional entertainers.

So why is Tina Maze successful? This Slovenian skier always believes she can conquer the next turn and that she can ski the  fastest, the same belief held by her coaches, masseuse, servicer, and over 10 thousands fans. As long as she is confident that  she can achieve perfection, there is no fear that her  business model will not be successful. Tina Maze delighted 22 thousand fans with her victory in the slalom at the Maribor Golden Fox Skiing World Cup last Sunday.

 

 

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My daughter wrote a letter to Santa Claus. Briefly summarize: “I want Kindle Fire!” I was tired of  ordering the gadget on amazon.co.uk and amazon.de. Order from Slovenia or Austria was not possible. So I just realized that the Santa had surprised Amazon.

Santa Surprised Amazon

 

Merry Christmas and Happy New Year!
Frohe Weihnachten und guten Rutsch ins neue Jahr!
Feliz Navidad y Feliz Año Nuevo!
Vesel božič in srečno novo leto!

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When I watched TED’s great lecture by David Kelly entitled “How to Build Your Creative Confidence,” I thought about my climbing. When you climb, you need complete self-confidence and you must have trust in the other climber, who is on the same rope with you. I see a bond between self-confidence and trusting others with survival. When you are in a precarious situation, if you are climbing with a stranger or are in an unknown area, your level of uncertainty can be very high. I always had a healthy appreciation for the dangers of upcoming climbs, and somewhere inside me, I felt the thrill of fear. However, after having accomplished a large number of such climbs, I have transformed that fear into respect, and I believe that change took place due to my acquiring a lot more self-confidence. Now, when I listen to Pink Floyd’s “Learning to Fly,” it reminds me of how I used to feel before and how differently I feel today.

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Confidence in yourself and trust in your companions are  important values in climbing. The same is the case with respect to business ventures. Customers will not buy your product or service if they don’t feel a sense of trust in you. Your sales and marketing personnel can’t sell a product if they do not have self-confidence and/or lack confidence into the product. It is difficult to do business if you don’t fully trust a partner to fulfill agreements. How can we trust a partner if he doesn’t pay invoices for work done properly, as agreed?Somebody who isn’t confident in his product and who lacks self confidence can’t be successful.

When I  worked for a company as Chief Financial Officer, responsible for payments, I had the opportunity in the early nineties to meet with a sales director He reviewed our invoices during the meeting, amended  the contractual payment period on those invoices, and changed the payment dates from 60 days to 90 or even 120 days. That was an outrageous violation of my climbing philosophy. Yet, this shoddy practice has been maintained in Slovenia till today, and has resulted in in a lot of uncertainty for businesses here. The larger companies with their legal staffs are adept at exploiting our too flexible rules and too compliant institutions. Payment schedules in many cases may extend to one year, and some obligations are never fulfilled. This changing environment has given  rise to business uncertainty, and this uncertainty grows worse every day.

But what can be done to reduce such uncertainty and to restore a healthy business climate?

When I was first climbing an exposed wall and the muscles in my arms hurt from the stress, I often thought, “What if I fall?”  I feared losing my strength and my grip while testing my limits with top rope protection. However after having climbed so many walls, now I have stopped thinking about anything except the next grip and how to grasp it. So, by raising my self-confidence, I have started to trust those who have the same level of mastery as I do and those who are more  skillful and experienced than I.

In the business world ,it is much more difficult  to attain such expertise than it is in climbing because many more circumstances can affect one’s confidence in the execution of activities; there are a much greater number of variables. For example, we need to recognize the building blocks of a business model that have the most impact on operations and stakeholders’ activities. These building blocks include  partners, employees, clients, customers, funders, etc.. Trust is not static; it has to be assessed on both an emotional  and a quantitative level. Only when we have made these assessments, can we start to think about solutions.

How can solutions that will reduce uncertainty be developed?

We need to create personal business models, ones which help us to transform our ideas into action on a personal business model canvas. In the testing phase, we must check customer confidence in our ideas and in how much trust exists between ourselves and our partners . By doing so, we can create our own self-confidence. Tests are essential parts of the learning process and help us in the process of “guided mastery,” as David Kelly calls it

Uncertainty can be reduced by checking the confidence level of a company and can easily be checked by creating a business model canvas. Increased business confidence is one of the most important results of business model testing. We can compare the quantitative level of confidence (for example, delay of payments, quality of orders, etc.) with the qualitative level of confidence. Then we can use the results to create more complex business model combining cases, ones in which our business model and those of our partners, owners and other stakeholders are involved.

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If we want to work with a partner, they must help us in one of the following three areas.
1.       They should have to perform tasks that are associated with the execution of our processes.
2.       They must solve problems which we do not have sufficient resources to implement, or we do not have the expertise to resolve them.
3.       They have to help to satisfy needs that we have in the company. One of these needs is the need to communicate.
If the partner does not help in any of these areas, then it is pointless to cooperate with them.

What do partners have to give?
When choosing a partner company, it is useful to analyze its business model and figure out how we will be treated. We are going to be their customers, co-creators, and/or intermediaries, any or all of the foregoing. Is such a successful relationship going to be possible?
If you find that the company’s response is too rigid, then you have to find a more flexible partner.

Partners have to give…
Many companies in Slovenia assess potential suppliers. However, most of these assessments are not  made ​​in terms of the business model. They look only at estimated criteria of price, quality, personnel response, documentation management, etc. While these are all important factors, neglecting to analyze a potential supplier’s business model can easily result in a failed relationship.
Consequently, it is vital to realize that companies can have great benefits from an audit that analyses the conformity of the partner’s business model combined with their business model. The models have to be  compatible; otherwise, the companies won’t be able to work together..
If we assess our business model in terms of business model combining with the models of partners, we need to develop a business model combo which will help finish tasks, solve problems and meet all our mutual needs.

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I joined the EmpireAvenue site three weeks ago because, after reading an interesting article (Serious Play: The Business of Social Currency about the EmpireAvenuein Harvard Business Review,) I became curious as to how this challenging, innovative service works. What I read in the article and saw at the site caused me to start thinking about the EmpireAvenue business model and the possible advantages of combining that model into a company’s business model.
The EmpireAvenue offer platform gives members the opportunity to trade shares with other participants. Shares are used as social currency and each participant (individual, company, or institution) is a partner who gives information to EmpireAvenue information about his/her/its activities on various social media. The frequency of activities on a participant’s social media are measured and calculated and then expressed as the value of one’s shares. Thus, the basis for one’s social currency depends to a great degree on the quantity of a participant’s activities. That is the “real “ virtual value because measuring quality of content is virtually impossible. Therefore, one’s “value” is largely determined by a participant’s followers, friends, and partners on his/her/its social networks.

EmpireAvenue enables members  to see how active and how influential a participant is in the virtual world of social media, and it was an interesting experiment to see how much impact I supposedly have. In addition, companies may want to combine the EmpireAvenue or similar business models into their own business models because by doing so they can get information about influential individuals and other companies or institutions. That information gives them an opportunity to collaborate with important participants. Thus, EmpireAvenue can be great tool for businesses and for high-value players who could sway a company’s significant customers.

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I’ve joined a group which works on new sport devices for training; we brainstorm hypotheses of new business models. One original product that we created enables an innovative approach for recreational and professional sportsmen. We were able to answer the question “how to make the product” quickly and easily. However, the project starts to become more complex when we try to rethink value propositions, add supplement services, and put all the considerations in the context of  financing.
Our goal is to find out what jobs recreational and professional sportsmen want to get done, and if our product and supplemental services will help them to reach their objectives. We are focusing on the “who” side of the business model and distribution channels. Therefore, we start by discovering who our potential customers may be.
The new product and services will have a better chance of success:

  • if the group of customers who like this inventive way to use technology is large enough
  • if the product helps this same group of customers get their jobs done .

 

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Modern companies such as Zipcar are focusing on customers who need simple, individualized solutions for their temporary transportation needs. They want cost flexibility and a variety of cars for different occasions. There are many potential advantages to both the customer and the supplier when the transaction is based more on subscriptions than on one-time purchases. Modern companies such as  Zipcar want to have a lot of members since that will guarantee them predictable revenue streams. Zipcar subscribers also want to  be able to easily find the cars they hire. They can do so with Google maps, which displays all the locations of Zipcar pick-ups and drop-offs. This convenience makes Google maps the perfect distribution channel for Zipcar offers.  When a customer uses the car, he /she can employ Google maps for navigation and to discover where  the car can be returned once it is no longer needed.

Techno cake presently has forty-nine members, and that number could, and most likely will,  increase with each talk. Techno cake can exist in the long run only if we have a sustainable business model that extends beyond just  profit.  This is the  reason that I created the prototype of the Techno cake business model and now, to further develop that prototype,  I need  to brainstorm with the current members of the movement.

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Business Model Canvas, Osterwalder, Pigneur & al. 2010, CC BY-SA 3.0.

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Presently, almost one out of three Slovenians is a Facebook user; among these, those thirty-four years old and younger represent seventy-five percent of our country’s Facebook users. Such statistics make it very evident that it is especially younger Slovenians who love this social network.

Alexander Osterwalder wrote a great post (SOCIAL MEDIA AND BUSINESS MODELS) about the value of social media for business. He drew a map (called the Business Model Canvas,) dividing social media into three areas on business models: co-creation, marketing as conversations, and open innovation. However, I think that , at present, Facebook would not be the best tool for open innovations.

I discovered that Slovenian companies and organizations which use Facebook, such as Toper (12,850 fans), Mi2 band (14,825 fans), and PerpetuumJazzile (38,346 fans) have used Facebook only as a marketing tool. They haven’t utilizedit for product or service co-creation, or for open innovations.

It is also interesting that a lot of car manufacturing companies worldwide haven’t used Facebook as a serious marketing tool.  BMW and Audi are exceptions; they both have large numbers of fans (BMW: 4.313.395 fans; Audi USA : 2.816.715 fans) currently on Facebook. They have developed strategies to use Facebook as a distribution channel for marketing BMW and Audi product offers. On the other hand, Volkswagen has only 251.552 fans and Renault merely 73.236 fans,) indicating that they have no such effective strategies whatsoever.

My research has also concluded that that biggest car manufacturers don’t use Facebook for co-creation and open innovations. However, I think that, with proper planning and execution, that social media site could also be a great tool for the co-creation of products such as cars and car equipment as well as a crowdsource for open innovations.

Even now, Facebook is a great distribution channel for my business. However, when we compare Facebook users in European countries, it becomes clear that the opportunity for major growth potential lies mainly in the Central European countries, Russia. My prediction is that the trend will go in the direction that we can see in Great Britain and Norway, where currently nearly one of every two citizens uses Facebook.

FPE

Facebook will be the key distribution channel in Slovenia since its ad platform allows advertisers to target users with regard to age and geographical location. Companies can set ads to appeal to users based on specific age ranges, interests and/or connections on that network.
In the coming years, Facebook will surely develop into one of the most effective marketing channels, offering co-creation tools, and a forum for crowdsourcing for companies with the foresight and imagination to take advantage of the many opportunities offered.

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A week ago, I talked with the manager of a medium-sized enterprise from the region where I live. He was very optimistic about the economic trends in Slovenia. He told me that his company has had a substantial increase of orders from abroad. As a result, he expects considerable growth in both income and added value in the future.  However, I think that possibility of growth for his company will need a longer period of time in order to affect the regional economy.

The main reason for this situation is that the company mentioned above is unwilling to collaborate with other local enterprises. Older companies which have old-fashioned opinions like to think they are self-sufficient or they work in limited business networks. Those enterprises don’t want to combine business models with any smaller companys’ business models. They mistakenly believe that they cannot share their companies’ value propositions or share in the value propositions in any other companies from the local region. If a company with an increase of orders starts to combine with the value propositions of the local enterprises, then it can increase incomes for commercial and value network services.

What do larger companies have to do to change this situation?

1. They have to eschew isolation, discard their outmoded ideas, and realize that businesses in today’s world flourish more through collaboration than competition.

2. They have to assess own business models.

3. They have to determine the areas suitable for changes.

4.  They have to determine appropriate scenarios.

5. They have to find possibilities for collaboration with the business models of complementary, local area partners.

6. They have to prepare prototypes of business models combining.

7. They have to implement combined business models collaboration in the involved companies.