Category: Business model innovation

Methods and case studies of Business model innovation

Business model innovationBusiness trendsCollaborative business modelsCollaborative cultureCulture change

Business ecosystems come of age

As it has been explained in many posts and Whitepapers, one of the key success factors of destinations in their evolution towards the Vision of Tourism 3.0 is to develop an innovation ecosystem integrated by different types of contributors. In that regard, Business Trend Series Deloitte’s report Business ecosystems come of age presents a series of articles describing how businesses are moving beyond traditional industry silos and conjoining networked ecosystems, creating new opportunities for innovation.

The report offers a glimpse of how some view the rise of ecosystems as an opportunity for creating powerful new competitive advantage as it becomes increasingly possible for firms to deploy and activate assets they neither own nor control and expand the possible beyond of their expertise and activities.

This brief summary outlines the various subjects and ideas dealt with:

Introduction: A brief history of the concept of ecosystems applied to business and how it all started in the technology sector but now is also taking root far beyond.

Blurring boundaries, uncharted frontiers: Long-standing boundaries and constraints that have traditionally determined the evolution of business are dissolving, allowing new ecosystem possibilities to flourish.

Wicked opportunities: Many kinds of complex, dynamic, and seemingly intractable social challenges are being reframed and attacked with renewed vigor through ecosystems formed by unprecedented networks of NGOs, social entrepreneurs, governments, and even businesses coalescing around them.

Regulating ecosystems: Regulators are challenged to create policies and solutions that protect the public’s interests and are also dynamic enough to keep pace with innovation born through ecosystems.

Supply chains and value webs: A set of powerful developments have worked together to help transform the business environment, changing how supply chains are configured, further heightening their strategic significance for many firms, and creating new leadership imperatives for the years ahead. Now “companies don’t compete—supply chains do.”

The new calculus of corporate portfolios: The rise of business ecosystems is compelling strategists to value assets according to an additional calculus, often generating different conclusions about what should be owned.

The power of platforms: Properly designed business platforms can help create and capture new economic value and scale the potential for learning across entire ecosystems.

Minimum viable transformation: Business model transformations are not unprecedented, they have always happened. It is not even new that business model transformations must consider the evolution of a company’s broader ecosystem. What is new today is that such transformations must be considered and accomplished routinely—not as storm-of-the-century events.

You may download the document at Business ecosystems come of age

This article is from www.co-society.com/official-business-ecosystems-come-age-deloitte-confirmed/

Business model innovationCo-creationCollaborative business modelsInnovationMarketing 3.0

Case study: Trip4real. Tourism experience collaborative business model

Trip4real is a paradigmatic example of how the collaborative economy flourishes in new business models for the tourism industry. Founded in Barcelona by Gloria Molins, it connects local experience developers with tourists eager to discover the destination through tailored experiences for them. Trip4real is a collaborative platform where any local may market a tourism experience to help the tourist discover the destination from a particular point of view or live special interest experiences.

The platform acts like a marketplace and also as an intermediary, so the payment is controlled by the platform and it gets a commission out of it. After the payment is done, the supplier and the client are connected to meet and live the experience. The motivation behind this business model is the will of the tourists for discovering the destination off the beaten track, where the locals go, and the hidden secrets that cannot be found in the Guides, as well as the authenticity brought by the interactivity with locals, who facilitate a deeper understanding about the local culture.

The first platform was developed for Barcelona, but other platforms have been developed in Madrid, Lisbon, London, Paris, Rome, Dublin, Berlin, Amsterdam, Edinburgh and a handful of Spanish destinations.

As has happened with Uber, do you think that these business models may be treated as unfair competitors to the local “official” tour guides and incoming agencies? Do you think there should be any kind of restrictions to letting it legally compete with standard tourism service suppliers?
You may check further details at www.trip4real.com

Business model innovationCollaborative business modelsStrategy

Small local brands: You either collaborate or you’ll be intermediated

In Destinations 3.0, DMOs work as marketing platforms intermediating for the local businesses and joining efforts with those businesses to reach the global market, just in the way that thousands of niche companies are willing to enjoy the benefits of the level of visibility and consistency that only a more “mainstream” brand can offer. This article explains the imperative need for small businesses and brands to develop cooperative marketing platforms to avoid being intermediated by wholesalers with a much higher negotiation power.

Some early Internet evangelists promised anybody with a website and an e-commerce platform can have a global market no matter how small the company or where it is located. A theoretical true, that statement does not take into consideration the laws of Attention Economics that Internet itself is boldly proving right from the very first moment.

It’s also true “Long Tail” niche offers can overcome this barrier by the same differentiation and exclusivity that made them niche in the very first place. Yes, it’s possible to create a global audience or market by offering something nobody else is offering and then establishing a relationship with your customers leveraging all new media and tools available today. Yet, still, this level of differentiation is not always and for everybody possible.

Collaboration with others such niche brands can make this strategy less difficult and more potentially fruitful.  Good news is people seem to be rejecting the notion of large corporations and are looking for companies whose people and story they can connect with. Bad news is Attention Economics apply, making impossible for customers to have a relationship close enough with all niche brands that could be relevant to them in a particular moment.

This is why even living in a flat world we still need intermediaries. A different kind, but still intermediaries. But in the digital paradigm, once eliminated geographical proximity as a factor, we only need one of these intermediaries for each of the limited list of categories our minds can deal with, making monopolies or oligopolies a natural and logical outcome for every market.

Good for those understanding becoming the perfect interface for a particular category of products or services is the fast lane to success (and dollars) in the digital realm. Too bad for the ones who will have (or already have) to deal with a monopolist in order to make their products or services visible and purchasable. Too bad for thousands of musicians or app developers taken a cut of a third of every sale that would have been considered outrageous if taken by a local record or software shop. For every Etsy or Zappos of the world, there is the menace of them taking advantage of a dominant position, the threat of the “Upper Hand” syndrome we wrote about referring the case of Fulfillment by Amazon.

Collaboration will be the only possible answer for the convergence of a growing number of niche offers and the challenge for these companies of having enough scale for their offers to be visible and purchasable. If these companies do not create and own their own intermediation by collaborating with others, somebody else will create a digital intermediation for them.

Co-Society was recently involved in a project for an association of cooperatives looking for new roles in a changing, much different world in which the Co-op concept was born. There is still an opportunity to build many middleware platforms between consumers and niche offers, an opportunity for umbrella organizations representing smaller or local brands and offers with a promise to the consumer of a guaranteed consistency and quality. But for these to be owned by the smalls brands themselves, there will be no other way that to be implemented and managed by a more collaborative, democratic and horizontal organizations we are used to, organizations similar to the structure and mindset with which cooperatives were born more than a century and a half ago.

This article is from www.co-society.com/small-local-brands-either-collaborate-youll-intermediated/

Up to what extend could the local niche brand be differentiated from the destination brand if this niche business has to be marketed through the destination branded platform?

Business model innovationCo-creationTourism trends

Innovating in a religious center to create life-changing experiences

Innovation is not a transforming element exclusive to the business world. Promoting innovation in another ambit such as spirituality is not only possible but it can also teach us many useful lessons which are actually applicable to any kind of organization. The changes carried out in Cova St. Ignasi house of spiritual exercises, a Christian Catholic center in the Barcelona Area, prove that innovation is applicable in absolutely all fields. Actually, innovating in the field of spirituality is itself a disruptive innovation.

It took around 7 years for a group of young Jesuits led by Xavier Melloni to introduce a series of new activities among the programs developed in Cova St. Ignasi. Those activities were open to the participation of all kinds of people regardless of their religious confession or practice. These programs offer the chance to experience the inner search introducing both oriental techniques and elements of body expression.

Among the new internalization techniques there are yoga and tai-chi. Self-knowledge practices incorporate also elements from the Sufi tradition and have a base of both spiritual and psychological dimension. To these spiritual experiences some components related to body expression like dance have been added.

As you may guess, the introduction of these activities among the usual programs in this house of spiritual exercises was much more than mere novelty in an institution dedicated for centuries to the prayer and spirituality from the Catholic practice and doctrine. Years after offering these new activities, the novelty has positively surprised both the local population and the institution.

Key takeaways

From the success of an innovation in a rather conservative environment there are many interesting lessons to take away:

WITHOUT RADICAL BREAKING OFF. The introduction of new programs has not led to the disappearance of the traditional activities. This circumstance helped the transition by diminishing the anxiety in front of novelty.

CONVINCED PEOPLE, THE MAIN CHANGE MOTOR. The main characteristic of the group of people who led this innovation was the strong conviction in the ideas they were proposing and wanted to put into practice. Nobody had the obligation of getting involved in an activity which they did not feel comfortable with or did not believe in.

MULTI-CONFESSIONAL TEAMWORK. To develop the Project they decided to mix both catholic and non-catholic members, cooperating at the same level since the first day.

CONFIDENCE IS KEY. The proposal of Xavier Melloni and the rest of the team responsible for the Project generated many kinds of negative reactions at the beginning. For instance, one of the main concerns was fear that people could think that they were abandoning or relaxing the principles of the organization. But any innovation process requires a certain audacity to overcome the fears that arise with any change. For Xavier, this audacity has been as crucial as the necessary confidence not to be questioning the project over and over again. With the confidence shown by Xavier and his team it was easier to assume their own responsibilities and be patient with the development of the project.

THE BEST OF EVERY PRACTICE. Successful innovations in any field are not absolutely original. They do not start from scratch, but rather from combining elements of the best practices in a new way. The spiritual exercises designed by Xavier Melloni claim to integrate the most positive elements from both oriental and western cultures, attracting people who are distant from the Catholic practice, probably due to the Church’s official message. Many people want to work on their spirituality but consider that Christianity is too inflexible and excessively moralized. On the other hand, seriously introducing elements from other religions requires going through an educational process encompassing language, mythology, etc. which may be quite long and demanding. Xavier’s proposal consists in offering the chance to rediscover spirituality through the local language.

INNOVATION AS AN ELEMENT WITHIN A VISION. Changes coming from a concept or a vision that goes beyond that particular change have more chances to be successful than those that are made as a result of a short term challenge. The new proposals from Cova St. Ignasi come from considering the various religions as different vehicles to achieve the same destiny, the philosophy which Xavier Melloni has been working on as an expert in inter-religious dialogue for many years.

POSITIVE CONTAMINATION. Innovation usually comes from the merge of ideas and practices from different fields which are barely ever in touch. Xavier Melloni thinks that it is crucial to distance yourself from the small and closed worlds in which we usually are. Why not create the glocal (global-local) also in the religious ambit?

This post has been inspired by an article in www.infonomia.com , the leading Spanish Forum on innovation.

What life-changing experience do you envision inspired by these case studies?

Business model innovationCo-creationInnovationMarketing 3.0Strategy

How to develop new products

Beyond the cluster’s and cross-destination conditions, product competitiveness is no doubt a key factor to consider in the overall assessment and strategy. Product competitiveness strategies entail sometimes developing new products and others just improving the current ones. In this regard, this section explains the key product development strategies and methods, some product development programs that are used in most destinations, and also the product competitiveness strategy and most common programs.

Developing new products is not an easy challenge. Once the product portfolio strategy is defined, the product categories to develop are established. Then, from the product category to the marketable product is where creativity and product development mastery make the difference. The main steps of the product development are the following:

  1. Conceptualization
  2. Business model design & test
  3. Feasibility study and assessment of social and environmental impacts of the product
  4. Business Plan
  5. Launch
  6. Monitoring performance & improvement

Even if the Product Manager is solely responsible for the product development, in Tourism 3.0, the co-creation and the ideas coming from the open innovation bring support in the steps 1, 2 and 6. Steps #1 and #2 are supported by the contribution of the co-creation workshops and the Open Innovation System through various types of contributions: professional and non-professional; whereas the step #6 is supported by the visitor’s creative reviews after their experience with the product.

The case of the life-changing experiences is where co-creation and open innovation play the most decisive role, due to their complex nature, as they have to provoke some kind of personal transformation in the visitor, far beyond the usual tourism experiences. Their development process is therefore more complex as well. The development of life-changing experiences entails the following steps:

  1. Starting from the mission as an inspirational mantra, and listening to related stories to better understand the life-changing idea, define the experience concept based on its life-changing goals (effects or impacts), the constituents of the positive change (those who benefit from the activity), and the activity behind the experience.
  2. Try to include storytelling training as a part of the experience, to generate new stories
  3. Business model design & test
  4. Feasibility study and assessment of social and environmental impacts of the product
  5. Business plan
  6. Launch
  7. Monitoring performance & improvement

In this case, the Product Manager has to supervise the adequacy of the ideas being developed through the open innovation, the product development contests and the co-creation workshops, to help improve & refine them, and to invigorate contribution. The Product Manager is also in charge of selecting and managing channel partners, organizing the aforementioned events, benchmarking and managing customer feedback.

Once the life-changing experience product has been launched, the performance is monitored and creative reviews are encouraged, along with the creation of stories about the experience. These two are the most inspirational sources for product improvement and new products development. The capacity of the product to be customized for every tourist makes it more productive in terms of stories created and creative reviews.

Would you consider other steps in the product development process?

Business model innovationCo-creationCollaborative business modelsEnvironmental sustainabilityInnovation

Story innovation concepts: added value & crowd game driven experiences

Beyond the explained details of the four prototypes, there may be many other added value experiences to support the main one in fostering its popularity and conveying new contributions both in virtual and real world platforms. Some of these story related experiences could be video games (in the case of the prototypes 3 and 4 the video game is an essential component), comic based stories, theater plays, board games, movies, spin-off stories, merchandise products, etc. This is actually what film series such as Harry Potter, Star Wars or Lord of the rings have done to some extent, trying to satisfy the desires of their followers for more story related experiences.

With regards to the crowd game driven experiences, the environmental challenges would be driven by volunteers, usually entailing some kind of field work to achieve a certain goal in relation with the environment protection in the form of a game driven experience to make it more fun and stimulating. In the case of the creativity & cooperation challenge, it would be driven by contributors willing to prove their creative skills, in the form of a game driven experience where participants also have to prove teamwork capacity by solving one or more innovation challenges related with the mission purpose, which also serves as an educational experience in collaborative innovation. Finally, the educational fun experience is for tourists willing to entertain while taking away some significant learning outcomes related to skill development or social consciousness, for instance.

In the case of contributors in creativity & cooperation challenges and also in the case of story making contributors, there should be a system that not only facilitates but also rewards contributors based on a reputation and incentive system, in order to stimulate talented followers to bring in their passion and imagination to build the story world. This is not only crowd sourcing but also providing the audience members an opportunity to live a life-changing experience by exploiting their skills. The Whitepaper “Envisioning Open innovation in destinations” is to further develop the idea of the incentive and reputation system for contributors.

Do you envision other story innovation concepts to enhance the aforementioned ideas or to inspire new story based experiences?

Business model innovationCo-creationInnovationMarketing 3.0Open innovation

Story innovation concepts: story platform

A key idea to understanding the aforementioned prototypes is that of the story platform. In this concept there is one principal author who drafts the main guidelines of the story, like the location, the value proposition, a basic plot, and some of the main characters. This could also be called the story backbone or the story constraints.

 Taking this platform story as a starting point, the free contributors –working individually or in groups- may create their version of the story by filling all the gaps that the backbone leaves to develop the contributors’ imagination, adding new characters and sub-stories that shape its uniqueness. As a result, there end up being many different stories with a common purpose related to the mission for which tourism is being developed in the destination. This is the case of prototype 2.

In the case of prototypes 3 and 4, there would also be a platform story with constraints and pre-determined ingredients. But the difference is that they are game driven experiences applicable to many kinds of missions that are created to draw flows of contributors, volunteers or tourists in taking real action in benefit of the mission purpose.

 Further, in these cases the roles of the participants are all pre-determined and every individual decides what type of role he or she wants to play in the story, with freedom to develop the role with his or her skills, ideas and knowledge.

Do you envision other types of story platform to develop story based experiences?

Business model innovationCo-creationCollaborative business modelsInnovationMarketing 3.0

Destination story based experience prototypes

Needless to say that many more possibilities for each variable may be envisioned, but these are just some examples to help the reader understand the innovation method. Based on these ideas, we have drafted four story driven prototype experiences to illustrate the type of result that the innovation method may produce.

  1. Personal awareness & Spiritual development journey, in line with pilgrimages and similar experiences. This is usually a journey that is carried out alone as of a process of self-reflection and discovery. The role of the protagonist is that of a tourist, so long as he or she is the only beneficiary of the experience, and may encompass both walking routes and static setting stays. In this case, the tourist is to write the story at the end of the experience, ideally with the support of a training workshop, but the protagonist should work on drafting the story from the beginning of the experience. The goals of writing the story are completing the self-awareness and discovery experience, and to inspire others in living their own transformational experience.
  1. Story driven development of a theme route, as in the cases where some novels or films have inspired the development of tourism routes for the fans of the story. This would consist of a story contest launched by the destination management organization (DMO) based on some constraints or even a story backbone. In any case, the story has to be developed based on the destination as the story platform. The contest should be open to both individual creations and group co-creations. At this point, many formulas could be envisioned to encourage the contribution of as many people as possible. The value proposition of the story driven experience should be in line with the tourism 3.0 principles, which means that it should have at least an educational or cultural transformation goal, without disregarding the fun or entertaining value.
  1. Crowd gaming ongoing experience consists of an ongoing story driven experience that takes place in a certain setting without a time limit. This experience takes the form of a mission driven game or challenge, and so the mission accomplishment is what keeps on driving the development of the story game. There is no foreseen end, as long as the mission is not fully accomplished. Such story would work like an MMO game where everybody is entitled to participate both in the virtual and the real world platform in the destination. The location could be any type of destination and the protagonists could either play the role of tourists, volunteers or contributors, depending on the type of challenge: educational fun for tourists, environmental protection challenge for volunteers, and creativity & cooperation challenge for contributors. In this story driven experience, the story plays the role of drawing tourists, volunteers or contributors to the story making and to visit the destination to participate in the real world experience.
  1. Crowd gaming event consists of a crowd sourced game driven story that is played like an MMO game with some real world experience along the story, but especially at the end of it. The events could take place in almost any type of location, including cities, nature settings, cultural destinations or theme parks –for instance- depending on the ultimate purpose and nature of the real-world experience. Such purpose could be for an environment protection challenge, creativity & cooperation challenge, or an educational fun experience. As in the case of the Crowd gaming ongoing event, the role of the protagonist is related to the purpose of the experience, and so could be a volunteer, contributor or tourist. In this type of story-driven experience, the story also plays the role of drawing attention, participation and contribution of individuals in the co-creation of the story, the contribution related to the purpose and in visiting the destination when the event takes place.

Out of the innovation parameters explained in the previous post, do you envision other story based experiences?

Business model innovationCo-creationInnovationMarketing 3.0Open innovation

Story innovation framework and guidelines

Based on the trends mentioned in previous posts, we have envisioned some innovation guidelines to integrate storytelling with real world tourism experiences. To do so, we have identified seven variables that define each of these story-driven tourism experiences. By playing with different combinations of values for each variable, we can develop an innovation method.

Type of experience refers to the variables that shape the way the experience is delivered, such as individual or group activity, ongoing availability or scheduled availability (the case of events), location based or route based, game based or journey based, etc. In this regard, there have been envisioned four main types of experiences:

  • Walking route, to be experienced by oneself or in group
  • Stay in a location, to be experienced by oneself or in group
  • Crowd gaming event
  • Crowd gaming ongoing experience (24/7)

Type of story authorship refers to how many people have contributed to the creation of the story. In this regard, there have been envisioned three main types of authorship:

  • Individual
  • Group co-creation, referring to a limited group of people
  • Crowd co-creation, referring to a story where everybody is entitled to bring in their ideas

Type of location refers to the kind of setting where the experience is to be delivered. In this regard, there have been envisioned five main types of settings:

  • Theme park or resort
  • City
  • Nature setting
  • Cultural or Theme route
  • Cultural destination (other than a city)

Type of value proposition refers to the core of the experience, its aim and its value. In this regard, there have been envisioned four main types of value proposition:

  • Environment protection challenge or rally
  • Educational fun
  • Creativity and cooperation challenge or rally
  • Personal development and awareness journey

Role of the protagonist refers to the type of role developed by the person who is to live the experience. In this regard, there have been envisioned four main types of roles:

  • Tourist
  • Volunteer
  • Contributor
  • Brand ambassador

Type of story creation refers to the creation process of the story, in line with the aforementioned trends. In this regard, there have been envisioned four main types of story creation process:

  • Contest and crowd or group co-creation based on backbone story, with location and value proposition constraints
  • The author writes the story at the end of the experience, with the support of a storytelling training workshop, though he or she drafts the story for as long as the experience takes place.
  • The story-game is co-created in digital platform –like an MMO game- and the real-world experience takes place when the virtual story-game is already advanced or right at the end.
  • Ongoing open co-creation by the crowd contribution –under established rules- both online and on the real site, like a never ending MMO game that takes place simultaneously in the real and virtual space.

Role of the story refers to the relationship between the story and the experience, in terms of cause-effect and temporary sequence. In this regard, there have been envisioned four main types of story role:

  • Inspire the development of a new tourism experience or product, like a themed route
  • Draw a crowd to drive an MMO game based challenge that ends with a real world event
  • Tell the personal journey experienced in relation to an existing tourism product
  • Draw audience to follow a story driven game or challenge, learn from it, and inspire them to live their related on-site experience and contribute to the story building

Would you consider any other story innovation parameter to this method framework?

Business model innovationInnovationMarketing 3.0Open innovation

The Marketing Plan 3.0: Open innovation outputs from professional contributors

Even if the bulk of the open innovation activity is expected to be carried out by the non-professional contributors in content creation and product development, there are other outputs and players to whom it is necessary to pay attention to for their key contribution in improving the destination competitiveness and marketing system.

It is necessary to note that the open innovation system is likely to be applicable only in the case of large DMOs and large DMCs, though simplified structures and formulas could also be designed for smaller organizations. To envision the open innovation system, let’s consider some of the outputs that may result out of it other than content and product:

  • Innovation in marketing strategy: new marketing channels, targets, business units, etc.
  • Innovation in marketing operations like new infrastructure and tactics
  • Technological innovations to streamline operations or create more value
  • Technological innovations to tackle environmental challenges
  • Innovative strategies to solve socio-cultural issues related to the mission statement

 Do you think of other interesting outputs to be obtained from professional contribution?