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Summary Accounting Game, ISBN: 9781402211867 New Business Models
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Hogeschool Utrecht (HU)
Creative Business
New Business Models
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NEW BUSINESS MODEL
20.04.2022
A company’s start is triggered by customers. More precisely, the problem/ job to be done from the customers.
There are no right business models. A business model is often a living framework that is reviewed and
adapted every year based on strategy, changes with customers, employees and the market. A business model
can help get off to the right start and make sure the early product and marketing decisions are tied back to the
strategy.
What is value?
Something’s worth. Value is created through an irreversible process which gives a resource’s “order” greater
usefulness to other humans. A bar of iron costs $5, made into horseshoes its worth is $12, made into needles
its worth is $3500, made into balance springs for watches, its worth is $300,000. So, value is determined by
what you are able to make it.
The purpose of a business is to create value (through work), sell it or trade it to customers, and capture
some of that value as profit.
Create/ deliver and capture
Value creation
Value can be created in two ways:
1. Firstly, by producing an offering (a good or service) that is worth more to customers than its cost to
produce.
2. Secondly, by preventing the production of an offering that is worth less to the market than its production
cost.
Clearly, expending more to produce something than its market price destroys the value.
Value delivery
The ultimate decision to do the deal always lies with the customer. Customers are willing to accept and use
your value because of their awareness of your company (nurtured by your marketing), their belief that your
offering will solve a business problem (reinforced by your sales approach), and their expectation of improved
operations (made credible by your customer service practices).
,Value capture
This is the stage at which your organisation gets paid. How much of the total value should you take? Simple
math dictates that you would get whatever amount is left after subtracting your costs of value creation and
delivery from the offering’s sales price. But it is never that simple because of other considerations, such as
competitor's pricing, the amount of surprise and delight you are trying to create for your customers, and your
longer-term market strategy, etc…
Creating customer value
Customer value = Benefits / Costs (in the perception of the customer)
Benefits can be created by product features, the user experience or other product/service benefits that are of
value to the business. Costs are the sacrifices your customers needs to make to enjoy your benefits. The
sacrifices may consist of, mustering the confidence that everything will be alright, taking the time to
understand the value proposition, learning how to use the product or service and paying the price for the
product or service.
21.04.2022
Entrepreneurship is the process of launching, developing and running a business venture along with its
financial risks.
"Entrepreneurship" the word "entrepreneur" comes from the French verb "entreprendre", meaning "to
undertake”. But as a basic entrepreneurship definition, that one is a bit limiting. The more modern
entrepreneurship definition is also about transforming the world by solving big problems. Like bringing
about social change or creating an innovative product that challenges the status quo of how we live our lives
on a daily basis.
4 main types of entrepreneurship
1. Small business entrepreneurship
They make profit only to make a living and support their families. Such businesses lack the scale to attract
investors and they are funded via friends/family or small business loans. In today’s world, the majority of
business are still small businesses.
2. Scalable startup entrepreneurship
They have impact at a bigger scale. Their funding comes from investors and they hire the best employees
possible. Finding a scalable and repeatable business model is their goal.
,3. Large company entrepreneurship
Companies become large through sustaining innovation, offering new products that are variants around their
core products. Often, companies do this by partnering with or buying innovative companies
Google, Microsoft, Apple
4. Social entrepreneurship
Social entrepreneurship is where an entrepreneur creates products and services to solve social needs and
problems. Their only goal is to make the world a better place and not to make profits or acquire wealth. They
can be non-profit, profit or hybrid (non- and for-profit).
Entrepreneurial risk:
Personal risk Financial goal
Small business high Feed the family
Scalable startup high Get rich/ implement vision
Large company low Feed the family/ get promoted
Social moderate Save the world
Entrepreneurs:
Is an individual who, rather than working as an employee, founds and runs a small business, assuming all the
risks and rewards of the venture. The entrepreneur is commonly seen as an innovator, a source of new
ideas, goods, services and business/or procedures.
Intrapreneurs:
An intrapreneur is an in-house entrepreneur, or an entrepreneur within a large firm (Google news, Google
AdSense), who uses entrepreneurial skills without incurring the risks associated with those activities, at the
same time has access to the company’s resources. Downside is that there’s a lot of resistance due to
organisational structure.
, Social entrepreneurs:
Social entrepreneurship is all about recognising the social problems and achieving a social change by
employing entrepreneurial principles, processes and operations. (Toms, Too Good To Go).
Solopreneurs/ digital nomads:
Solopreneurs and Digital nomads are one-person companies. They are people who are location independent
and use technology to perform their job. Digital nomads work remotely, telecommuting rather than being
physically present at a company's headquarters or office. (DNC: Digital Nomad Community, Hacker
Paradise).
Startups:
A startup is temporary company in search of a business model that is replicable, sustainable and scalable.
This normally takes 2 to 3 years.
Types of startups:
Startup - Scaleup - Scaler
Looking to grow in terms of market access, revenues, and number of employees.
Adding value by identifying and realising win-win opportunities for collaboration
with established companies.
Creative monopolies:
Are companies with unique value propositions that lead to little to no competition. Creative monopolies,
therefore, control the price, enjoying monopoly profits for decades.
There are two ways to accomplish this:
1. Create a completely new market by creating a unique product so the competition doesn’t exist yet, (I.e.
The iPhone).
2. Make products that already exist and already have a global market around them but make your product
better than the existing ones by a landslide (Uber).
They are based on no inventory + sharing + value their business is based on unique value propositions.
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