Category: Business model innovation

Methods and case studies of Business model innovation

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?

Business model innovationCollaborative business modelsCulture changeMarketing 3.0Strategy

The Marketing Plan 3.0: selling the vision to community stakeholders

The challenge of engaging the local community stakeholders requires its own marketing plan, usually known as internal marketing plan. This should be focused on the target stakeholders aimed at attracting in the first phase, encompassing the key partners and the local community. The Plan’s goals are to explain the vision, mission and the value propositions of the Destination Marketing Plan 3.0, encompassing the community related issues to be addressed through the destination development, the sociocultural transformation through life-changing experiences and the values that have to drive the organizational standards of behavior and the stakeholder community.

The Plan should distinguish between the different target audiences to assess convenience for targeted communication strategies. For instance, the professional audience and target partners may require a business oriented presentation, whereas for the bulk of the community members the presentation would be rather storytelling oriented.

Considering that many of the key partners and community leaders have been engaged since the mission definition, most of the effort should be focused on the local community members who have not yet been engaged with the project. For such purpose it is convenient to explain to them the project vision through a compelling story that connects first with their emotions and human spirit, to awaken interest for a deeper understanding of the marketing system.

Once these community members are interested, it is necessary to explain to them the operational functioning for them as potential contributors, and a series of communication tools should be developed to help them understand what their contribution experience is likely to be about. Such communication tools could be brochures, CD with video showcasing contributor’s fiction stories, web-based interactive presentation, social media based forums to solve queries, customer service hotline, etc. Finally, co-creation and storytelling workshops should be organized to empower potential contributors to participate in a first content creation contest with prizes for contributions in many categories so as to reward all valuable contributors proportionally and boost engagement.

To make a compelling story for this purpose it is convenient to use one main character similar to the audience profiles as the protagonist. Such a character should have similar problems, needs, concerns, fears and aspirations as most local community members, to allow them to identify with him or her and connect with the story. Then, the story shows the character finding out how the new destination model addresses all their needs and concerns, and how the open innovation system gives them an opportunity to contribute, showcase their skills and gain social reputation.

What other points would you consider when drafting the internal marketing strategy?

Business model innovationCollaborative business modelsInnovationStrategySustainability

Destination Models 3.0: Comparative performance between different destination models

To better realize how destination models 3.0 outperform other models in creating value, reducing efforts and marketing efficiently, hereby are compared three destination models:

Cultural destinations: based on cultural or natural resources with several business owners operating independently. In some cases these cooperate in partnership with the government for marketing the destination.

Resort destinations: based usually on natural resources with one owner operating or controlling all business units providing service in the destination, being also responsible for the marketing. All business units are therefore integrated within the resort.

Destinations 3.0: based on either cultural or natural resources with business units belonging to many owners, and operators cooperating with different levels of integration on the management and marketing of the destination.

COMPETITIVENESS & MARKETING: KEY DIFFERENCES BETWEEN THE THREE DESTINATION MODELS

  CULTURAL DESTINATIONS RESORT DESTINATIONS DESTINATIONS 3.0
VALUE PROVIDED
Experiences Typically local cultural experiences

Based upon cultural & natural resources, and locals creativity

Standardized experiences

Based on standard products, natural and artificial resources

Life-changing, personalized and imaginative experiences

Based on stakeholders co-creation

Feelings Cultural character and authenticity with heritage protection and hospitality programs Lack of character and authenticity (replicated facility style)

 

Enhanced authenticity through urban aesthetic harmony and locals’ inclusiveness as experience suppliers
Service quality control Some service suppliers have Quality certifications

Ratings for restaurants and accommodations

Comprehensive service quality control

Ratings for accommodation service

Comprehensive and incentivized service quality control
EFFORTS REQUIRED
Discomforts Dependent upon every service supplier and local service standards Fully specified comfort standards, adapted to the needs of tourists Only discomforts associated to cultural environment
Insecurities & risks Dependent upon government regulations and control Full information and safety controls on critical issues Full information.

Safety dependent upon government regulations

MARKETING
Needs satisfied Functional and emotional Mostly functional, but also emotional Functional, emotional and spiritual
Target tourists All kinds of tourists Limited segments All kinds of tourists, but primarily tourists 3.0
Marketing guidelines Differentiation Differentiation or price Mission, vision & values
Tourist relationships Sales transactions and satisfaction monitoring Sales transactions and satisfaction monitoring Experience co-creation, storytelling through communities
Marketing channels TTOO, TTAA and direct sales TTOO, TTAA and direct sales Mission driven agents, communities
COMMUNITY IMPACT Economic prosperity concentrated in local business owners Economic prosperity concentrated in the resort owners Poverty alleviation, socio-cultural change, environment protection
MAIN CHALLENGES Harmonize experience system and quality standards Develop unique experiences to compete upon differentiation Integrate and associate stakeholders

Foster culture change

Would you consider other destination models to compare performance? And other relevant points to be compared?

Business model innovationStrategyStrategy planning & execution

Destination Models 3.0: Development strategies (IV)

Service planning

Once identified the portfolio of partners, infrastructures, facilities and service suppliers needed to start operating the platform, it is necessary to envision the necessary service capacity or carrying capacity for each of them throughout the subsequent development stages. This entails determining the needed capacity for every business and facility in each of the destination areas in a reference day, foreseeing the expansion of the model to the utmost of its potential.

There should not only be planned the service capacity of facilities, infrastructures and service businesses, but also for the entire portfolio of experience providers, to guarantee a balance in the variety of experiences offered throughout the destination, according to the demand.

The service planning serves as a layout for the expansion of the model, setting the direction on which services and facilities have to be developed in which location, ensuring a balanced and harmonious development in every stage of the model’s expansion. It depicts the type of businesses, facilities and infrastructures that have to be developed in each phase of the model expansion, specifying the service capacity of everyone. Such service capacity planning should be flexible for both facilities and service businesses, in different ways:

  • For facilities, some resources such as personnel should be flexible to adapt variable costs to the needed service capacity according to demand. Every facility should have an established maximum service capacity, but its associated costs would depend upon the needed capacity.
  • For service businesses, there would be an initial plan of the service portfolio, which could be changed as long as the experienced demand for every kind of service advises to do so.

Would you add any other consideration when planning the service capacity throughout the expansion phases of the model?

Business model innovationCollaborative business modelsThird sector and social sustainability

Destination Models 3.0: Development strategies (I)

Once designed the architecture of the model, it’s time to design the strategies to develop it to the utmost of its potential. The development strategies are likely to be quite different depending on the initial scenario, whether it is a resort, a decentralized destination or a group of resources to be exploited for the tourism business. Hereby are described the four key development strategies that are to determine the success of the destination model 3.0 in most of the cases.

Human resources development

One of the key factors that makes destination models 3.0 deliver a superior value proposition to other destinations is the better human development of its service suppliers, along with the service quality control and incentive system. The human resources development strategy intends to unlock and leverage all the human potential of destination stakeholders, by stimulating their creativity and empowering them to develop and bring in all their talents in benefit of the destination, giving them incentives and recognition for their contributions. There could be many kinds of training programs:

  • Empowering locals to become micro-entrepreneurs, coaching them on how to develop their idea.
  • Training employees and service suppliers on how to deliver a memorable customer experience.
  • Language training in the main languages of the target outbound markets.
  • “Storytelling training” for all local stakeholders on how to create and tell stories, developing their communication skills, and eventually giving them the chance of participating in rewarding contests and publishing their stories.
  • Training to develop artistic skills such as photography or graphic design, to be used in the creation of marketing contents.
  • Educating on business model innovation in order to both help entrepreneurs reinvent their own business and to participate in the open innovation system discussions about revamping the destination platform business model.

Some of these programs like the storytelling training and artistic skills development, should also be offered as life-changing experiences to the tourists, who eventually may generate ideas and contents for the destination.

Would you consider other skills development goals?