The Business Model Navigator Testimonials The Business Model Navigator™ has been successfully applied in a number of companies to date. Here is what people who are already acquainted with our methodology have to say: ‘Product innovations alone won’t be enough to ensure our company’s continuing success; we want to encourage our people to turn more of their attention to new types of business models. The Business Model Navigator™ helps us to foster creativity and think in other dimensions.’ Dr Volkmar Denner, CEO Robert Bosch GmbH ‘The Business Model Navigator™ with its tools, strategy, and visualizations is a perfect complement to the “Foresight and Innovation by Design” philosophy at Stanford. They work in practice and in theory.’ Professor Dr Larry Leifer, Founding Director of the Stanford Center for Design Research ‘The Business Model Navigator™ demonstrates impressively that sustainable innovation is not created by inspiration alone, but can and should be approached systematically building on shared experience and based on data. Identifying patterns in fast changing environments and dynamically adapting your companies’ business model to them will be crucial for success in any industry.’ Dr Ralf Schneider, CIO Group, Allianz ‘BASF has been working for more than five years with the Business Model Navigator™. It has led to concrete business concepts and also created a more open mindset. We applied the methodology described in this book in various environments and industries – and it worked fantastically!’ Dr Petra Bachem, VP Marketing and Sales Excellence, BASF ‘An aspiring field such as New Space really benefits from the Business Model Navigator™ because the market will be defined by a variety of innovative business models – going through all the possibilities is a real competitive advantage!’ Dr Henning Roedel, NASA Ames Research Center ‘The Business Model Navigator™ has opened our eyes towards business model thinking within the overall innovation process of the company. It brings together commercial and technical leaders and improves the success rate of innovation.’ Stefan Borgas, President and CEO, ICL Group, Tel-Aviv ‘How would Amazon’s CEO conduct my business? Which new customer segments would Robin Hood open up if he were in my place? The Business Model Navigator™ helps us to break out of our own industry logic and opens the way to a dazzling display of new ideas.’ Wolfgang Rieder, Managing Partner, Head of Advisory Business Unit Switzerland, PricewaterhouseCoopers ‘In our Entrepreneurial Clinic we use the Business Model Navigator™ to coach start-ups in Business Model Design. This book goes far beyond other publications regarding concrete guidelines. It is a must for every strategic entrepreneur.’ Prof Dr Dr Thomas Schildhauer, Director Entrepreneurial Research Lab and Clinics, Berlin ‘Well researched and easy to apply in practice! That’s exactly what an excellent management book should be! It is inspiring, enthusiastic and rule breaking!’ Prof Dr Ellen Enkel, Editor in Chief, R&D Management ‘The Business Model Navigator™ is an exceptionally helpful book, using a clear concept and lively examples from real businesses. It is a must-read handbook for managers who want to revolutionize their business.’ Dr Bernd Riggers, President and CEO, Lufthansa Technik Shenzhen Co. Ltd. ‘The Business Model Navigator™ offers a great opportunity to challenge our habitual thinking concerning business models and revenue generation. Challenging discussions with project teams and staff are thought provoking and trigger collaborative development.’ Dr Ian Roberts, CTO, Bühler ‘The Business Model Navigator™ is a useful tool in defining exactly how and why a business derives revenue from customers. Many nimble start-up companies iterate and/or pivot in their business models (whether planned or unplanned) at different phases in their development. At Datafeel.io, our business model will no doubt change over time and it is helpful to know that it will reflect our evolving value proposition. This demonstrates the reality that start-up companies must remain resilient in order to better solve stakeholder problems and optimize value.’ Robert Schultz, CEO and Founder Datafeel, Boston ‘For us at Bosch, too, it will be increasingly important in the future that in addition to developing first-class products we use new business models. The 55 business models identified and described here provide an excellent toolkit for developing our own business model, especially with respect to our future presence in the Internet of Things and Services.’ Dr Heinz Derenbach, CEO of Bosch Software Innovations GmbH ‘The Business Model Navigator™ is a very effective way to help local businesses challenge their dominant logic and develop new business models.’ Richard Walker, Business Manager, Queen’s University Belfast ‘The Business Model Navigator™ makes it possible for us to grasp the business model as a whole and to work within a coherent system. The St. Gallen methodology not only brings results, but broadens the mindset.’ Daniel Sennheiser, President, Strategy and Finance, Sennheiser ‘We leverage the Business Model Navigator™ for our Business Model Innovation approach and discovered that it is a great methodology with high practical relevance.’ Dr Ulrich Eisert, Research Manager, SAP (Switzerland) ‘All organisations from start-up to the largest organisation need to keep their customers and innovation in full focus – The St. Gallen team’s Business Model Navigator provides a very clear methodology to take the next quantum leap in business.’ John Glynn, Managing Director, ShannonFerry Ltd. ‘I found that the Business Model Navigator™ has given me a very valuable new approach to use when working with companies helping to define their future direction and it really supports “thinking outside the box”. The Business Model examples provide a very useful guide from which to select one or a combination of patterns that can help to define new business models’ Mary Donovan, CEO, Caragh Consulting, Cork ‘We applied the Business Model Navigator™ in a 3-day workshop format with a key customer. Apart from jointly developing a promising business model option, the common experience has also strengthened our bonds for future intensive co- operation.’ Dr Susanne Schröder, Innovation Manager, Siemens Energy Sector ‘Business innovation requires overcoming mental barriers. This excellent book lays out a new way to think about new business models in the 21st century.’ Reza Vaziri, Managing Director 3M Germany ‘Working with the Business Model Navigator™ helped us not only to structure our internal approaches better, but drove us also to analyse and understand our competitors’ business models and therefore their and our position in the market space.’ Dr Reiner Fageth, Management Board, CEWE Color ‘These patterns are a very powerful creativity method and a great tool to generate a “business model thinking” attitude.’ Dr Angela Beckenbauer, Corporate Innovation Manager, Hilti ‘The Business Model Navigator™ provides a structured approach to the fuzzy field of business model innovation. The 55 patterns make it easy to think about alternative ways of running your business.’ Dr Michael Daiber, Innovation Agent, ABB Turbo Systems ‘These business models are an important source for inspiration and best practice to create and implement radical innovations.’ Daniel Ledermann, Head of Incubation and Portfolio, Swisscom ‘Applying the Business Model Navigator™ helps in challenging today’s business logic, opening up the solution space and creating a new mindset. We see this as a prerequisite for future success.’ Dr Christoph Meister, Corporate Innovation Manager, Holcim ‘I have learned from others to appreciate successful business models, but I learned from the St. Gallen team how to develop them myself.’ Thomas Moriarty, CEO, Firecomms, Cork ‘The world in 55 business models, at first sight unimaginable, but at second glance an incredible source of inspiration to innovate one’s own business model and carry it successfully into the future. Compulsory reading!’ Bernhard Klein, Director of Brand, Vienna Tourist Board ‘Working with the Business Model Navigator™ provides you with a broad portfolio of ideas and structures for business models. It helps you to create new and individual solutions for your specific business challenge.’ Stefan Strauss, Director, Business Development Service, MTU Friedrichshafen Contents Acknowledgements Introduction PART ONE How to drive business model innovation 1 What is a business model and why should it be innovated? The age of business model innovations The elements of a business model The challenge of business model innovation 2 The Business Model Navigator Creative imitation and the importance of recombination Initiation: Analysing your ecosystem Ideation: Adapting patterns Integration: Shaping your business model Implementation: Realising your plans 3 Managing change Drive change Define a plan of action Define structures and goals Build capabilities PART TWO 55 winning business models – and what they can do for you 1 Add-on 2 Affiliation 3 Aikido 4 Auction 5 Barter 6 Cash Machine 7 Cross-selling 8 Crowdfunding 9 Crowdsourcing 10 Customer Loyalty 11 Digitisation 12 Direct Selling 13 E-commerce 14 Experience Selling 15 Flat Rate 16 Fractional Ownership 17 Franchising 18 Freemium 19 From Push to Pull 20 Guaranteed Availability 21 Hidden Revenue 22 Ingredient Branding 23 Integrator 24 Layer Player 25 Leverage Customer Data 26 Licensing 27 Lock-in 28 Long Tail 29 Make More of It 30 Mass Customisation 31 No Frills 32 Open Business 33 Open Source 34 Orchestrator 35 Pay Per Use 36 Pay What You Want 37 Peer to Peer 38 Performance-based Contracting 39 Razor and Blade 40 Rent Instead of Buy 41 Revenue Sharing 42 Reverse Engineering 43 Reverse Innovation 44 Robin Hood 45 Self-service 46 Shop in Shop 47 Solution Provider 48 Subscription 49 Supermarket 50 Target the Poor 51 Trash to Cash 52 Two-sided Market