Category: Collaborative business models

Case studies and visions on how to shape collaborative models and partnerships, envisioning its benefits

Business model innovationCollaborative business modelsInnovationStrategy planning & execution

Destination Models 3.0: The business model canvas framework

The business model canvas is a strategic management template for depicting the rationale through which a business creates, delivers and captures value. It is a strategy blueprint with elements describing a business’ value proposition, infrastructure, customers, and finances to assist business leaders in aligning their activities by illustrating potential trade-offs.

This business model framework describes the key components that define the business’ DNA:

  • Competitive advantages & value proposition. Core strategic edges that provide advantage over competitors, experiences provided to the tourists and mission based value provided to all stakeholders. This should explain what differentiates the destination’s offer from others, and so the reason why tourists should go and other stakeholders should collaborate with the destination.
  • Customer segments. The target tourist segments that the destination wants to attract, based on criteria such as geographical markets, sociological and motivational profile.
  • Customer relationships. The kind of relationships the business model wants to establish with tourists, how to deliver the experiences and how to engage the tourists with the destination.
  • Marketing channels. The types of channels and marketing partners through which the destination is to deliver the stories and other marketing contents to engage potential tourists and other stakeholders.
  • Key activities & management system. The most important activities to sustain the competitive advantage through continuous improvement and execute the value proposition, as well as the platform’s management system including strategic goals, performance standards and metrics to measure the health of the business model.
  • Key resources and organizational structure. The necessary assets to start operating the platform and attracting stakeholders, which encompasses human, financial, physical and intellectual resources. In the organizational structure, every position is defined by its mission and key competences.
  • Key partners. The network of partners which are necessary to deliver the value proposition, as they bring along know how, resources and other value which are beyond the core capabilities of the business model, but should not be internalized, in order to reduce risk and costs, and to optimize operations.
  • Cost structure. The balance between overheads and variable costs, determining the potential to generate economies of scale or economies of scope.
  • Revenue streams. The way the business model generates income from the delivered services and products to different target clients and partners.
  • Social & environmental costs. The negative impacts that the tourism business development may cause in the natural environment and to the local communities. Hereby we may remark also the negative impacts saved by the tourism 3.0 development approach, in comparison with the usual practices.
  • Social & environmental benefits. The positive impacts that the tourism development is having both on the natural environment and local communities. They are to be measured through a series of metrics to assess the progression on the mission accomplishment.

Would you add or change any business model building block?

Business trendsCollaborative business modelsInnovationIntelligenceIntelligence methods

Destination Intelligence 3.0: Approaching tourism 3.0 from the regional level

Fostering the adoption of the practices and values proposed in the Vision of Tourism 3.0 entails transforming progressively the mindset of the tourism industry leaders towards a culture of collaboration and innovation.

Such efforts may well start in the top levels of the regional tourism boards, governments or industry associations. Either of these may take the lead in promoting the practices of Tourism 3.0 throughout the region down to the local levels, and a possible way to do so is by establishing a Destination Intelligence 3.0 system. This entails three main activities:

  • Capturing intelligence in the outbound markets
  • Monitoring the tourism activity in the destination
  • Leveraging the collective intelligence through an open innovation system

Destination intelligence 3.0 sets the stage for tourism destinations to develop their innovation strategy, providing a series of information flows and tools that facilitate and stimulate destination stakeholders to envision the need for innovation not only on the product development area but also on a more holistic approach encompassing all building blocks of the business model to continually improve the destination’s competitiveness. Further, it envisions how this practice is to become a key discipline in sustaining competitiveness and improving the destination’s marketing efficiency and effectiveness.

Apart from the consultancy reports, do you thing that intelligence reports elaborated by industry associations, governments and tourist boards are satisfactory to guide strategy, marketing and innovation planning in local destinations? If not, what is missing?

Business model innovationCollaborative business modelsCollaborative cultureCulture changeEnvironmental sustainability

Destination Marketing 3.0: Mission, Vision and goals

In Marketing 3.0 the mission is the main purpose of the destination development. This is to be defined by listening to and understanding the needs, concerns and aspirations of all stakeholders, starting with the local community leaders but without disregarding other potential stakeholders such as the communities of creative activists, who are to become the destination’s best brand ambassadors. Creating a mission often starts by thinking about small ideas that can make a big difference, and doing a Marketing Plan 3.0 gives an opportunity for reflection upon the mission definition, to make it more ambitious and attractive to the targeted mission driven stakeholders.

Such concerns and aspirations addressed by the mission are to be closely related to poverty alleviation at the base of the pyramid, protection of the natural environment through sustainable practices, and socio-cultural transformation towards more open and sensitive mindsets, changing the way people do things in their life, unlocking their human potential through skill development, and also fostering discovery of the fulfilling power of contribution to the greater good.

When a good mission is created it introduces a new perspective which ultimately is to transform the stakeholders’ lives, becoming a symbol within the community. Such a mission has to be spread through compelling and real stories that appeal to the targets’ human spirit, also empowering them to contribute in the activities aligned with the mission accomplishment. Their participation is crucial and they should feel responsible for fulfilling the mission.

The vision depicts how the destination and its stakeholders are to be transformed through the accomplishment of the mission, what the destination aspires to become and attain. The vision has to be the guiding force that motivates all stakeholders to contribute to the mission accomplishment and become brand ambassadors for the destination.

Marketing the mission and vision to the stakeholders is to be a critical step in the transformation, in order to engage them in the collaboration and innovation efforts, in view of a better future for the destination’s community. This is to be explained in the section about Internal Marketing.

Once the mission and vision are defined, they have to be turned into goals to better focus the strategies and efforts towards the mission accomplishment. Further, these goals have to be converted into a series of specific, measurable and time-bounded objectives which are to be the reference upon which performance is tracked throughout the implementation of the marketing plan.

Such goals and objectives are to be classified in many different areas of scope:

  • Mission goals and objectives, related to poverty alleviation, environment protection or socio-cultural transformation.
  • Business goals and objectives, related to financial performance and business model development.
  • Marketing goals and objectives, related to brand awareness, storytelling contribution and popularity, content delivery, merchandise sales, etc.

All these goals and objectives are to be used in the definition of the key performance indicators to track the success in the implementation process of the plan.

Which do you think will be the key success factors in defining the adequate Mission, Vision and Goals, beyond stakeholder participation?

Business model innovationCollaborative business models

Destination Models 3.0: shaping the new generation of destination business models (II)

From the operational perspective, the platform has a group of core businesses and resources fully integrated –whose owners become platform shareholders or sell them to the platform-, and a group of businesses which may choose among several flexible integration formulas to become part of the platform, whose owners may keep control of their business and have the right to change their integration status upon complying with specified conditions.

Therefore, the small local suppliers (such as restaurants, accommodation, activity organizers) operate autonomously within the platform, taking advantage of the increased attractiveness of the destination due to the story-based marketing, the platform’s services and support in providing a higher-standard customer experience, and the aforementioned advantages of leveraging the collective intelligence. In exchange, they have to comply with the obligations established according to their chosen integration formula within the platform -see section 3 about integrating stakeholders-, which would mainly consist of complying with service quality standards and urban aesthetic guidelines, and contributing to the open innovation system.

In summary, the platform is in charge of several roles:

  • Ensuring that the tourism business is developed in harmony with the cultural and natural heritage.
  • Managing and controlling service quality of all integrated businesses.
  • Directing and managing the open innovation system and its outcomes.
  • Providing facilitation and support to integrating businesses, especially to new entrepreneurs.
  • Managing the incentive system to reward good service quality and contribution to innovation.
  • Managing the bookings of all service businesses through a booking center.
  • Managing the integration of all businesses within the platform.

As a result of the tourism 3.0 development approach, destinations integrate and engage all the local community in the tourism activity, maximizing their collective human potential to develop a vibrant and harmonious destination where visitors come to live authentic life-changing experiences which ultimately address some of the stakeholders’ concerns.

The following sections explain in further detail the structure and operation of destination models 3.0, and the detail of each of the building blocks that depict their rationale. In the upcoming blog posts the main challenges in developing business models 3.0 and their correspondent strategies will be explained.

Do you envision other roles that the platform could or should be in charge of?

Business model innovationCollaborative business modelsInnovationMarketing 3.0Strategy

Destination Models 3.0: shaping the new generation of destination business models (I)

Destination models 3.0 are conceived as collaborative models which intend to leverage the creativity and know-how of all the stakeholder community to gain competitive advantage over their competitors, by developing a large network of brand ambassadors who create and deliver stories about the life-changing experiences that take place in the destination, in order to engage new stakeholders in the pursuit of a mission that addresses the concerns of the destination’s community. They are also triple bottom line models, as they account not only for financial costs and benefits, but also for environmental and social costs and benefits. Usually, the mission encompasses some of these issues:

  • Fostering socio-cultural transformation through the promotion of healthier lifestyles, cross-cultural understanding, mindset shifting in leadership culture, developing mindfulness, etc.
  • Enhancing conservation and promoting the cultural heritage.
  • Protecting the environment through education, innovation and deployment of sustainable practices, and collaboration with partners’ environmental programs.
  • Alleviating poverty through the empowerment of the communities in the base of the pyramid to become micro-entrepreneurs and participate in the tourism business.
  • Unlocking human potential through the empowerment of all stakeholders to participate in the destination’s model innovation system, with the creation of experiences and stories.

The model is a multi-sided platform which creates value by facilitating interactions between tourists and local service suppliers, also attracting many mission driven stakeholders through the network effect. Further, the collaborative business model intends to leverage and engage the collective intelligence by:

  • Creating life-changing experiences which directly or indirectly address the mission issues.
  • Designing and developing marketing contents and materials to brand the destination.
  • Revamping the business model as new challenges and opportunities come along.
  • Sharing resources among the community and developing economies of scale.
  • Leveraging the negotiation power of the community to obtain favorable deals with external suppliers.
  • Providing more professional development opportunities to community members.

Do you envision other issues to be encompassed in the mission? Do you think of other advantages of collaborative models, other outputs of the collective intelligence?

Business model innovationCollaborative business modelsMarketing 3.0StrategyStrategy planning & execution

Approaching tourism 3.0: Destination models 3.0

 

The “destination models 3.0 approach” is the one entailing the highest degree of transformation in the destination, not only in its marketing but in its business model and operational rationale. In the Whitepaper “Envisioning destination models 3.0” this concept is explained in full detail, and many case studies are to be explained in separate Whitepapers to better illustrate this vision.

Destination models 3.0 consist of the integration of most tourism businesses within a multi-sided platform which connects local service suppliers with tourists and other stakeholders. This platform is mainly in charge of controlling the service quality of all integrated and associated businesses and managing the marketing activities of the destination. A key element of this platform is the open innovation system, which intends to stimulate the continuous creation of experiences and marketing contents, as well as discussion about innovation in the business model.

They are conceived as collaborative models which intend to leverage the creativity and know-how of all the stakeholder community to gain competitive advantage over their competitors by developing a large network of brand ambassadors who create and deliver stories about the life-transforming experiences that take place in the destination, in order to engage new stakeholders in the pursuit of a mission that addresses the concerns of the stakeholder’s community. They are also triple bottom line models, so long as they account for financial, environmental and social costs and benefits.

The main idea behind this concept is to develop a tourism cluster with a high level of control over the service quality, as well as with urban aesthetic harmony and a spirit of collaboration and innovation among all stakeholders to sustain the destination’s competitiveness and marketing system. This should be applicable to existing clusters, resorts and new developments.

The mission of Envisioning Tourism 3.0 Ltd. is to keep on designing new business model prototypes approaching the Vision of Tourism 3.0 with different levels of complexity.

What kind of destination models do you envision approaching the Vision of Tourism 3.0?

Collaborative business modelsMarketing 3.0

Key concepts of tourism 3.0: Collaborative business models

Tourism 3.0 embraces many trends and concepts already existing in the most innovative industries, though not all concepts may always be applied together, as explained in the three proposed approaches and the corresponding case studies.

Understanding these concepts is essential to envision the different approaches presented, as well as to envision new ones. The challenge of envisioning tourism 3.0 is just at the outset, and is to be continually demanding new approaches so long as destinations require their own adaptations to the local culture and stakeholder status quo.

Collaborative destination models are the destination’s business models operating like a platform that facilitates interaction between local service suppliers and tourists. As in many business models in other industries, multi-sided platforms are like scenarios or marketplaces where players with complementary interests interact and exchange goods or services. As explained in the upcoming White Paper “Envisioning destination models 3.0”, these may have multiple kinds of players beyond service suppliers and tourists, entailing volunteers, non-profit organizations, sponsors, investors, etc.

These destination models fully embrace the trend of collaborative consumption, already ingrained in many business sectors, and increasingly present in the tourism industry. The main advantage of this type of model is that it empowers the local community of stakeholders to bring in their value not only benefiting the platform, but also the rest of the community by fostering entrepreneurship at the base of the pyramid and being able to keep ownership of their business. Further, it leverages the community’s creativity through participation in innovation practices.

What kind of collaborative business models would you suggest to develop tourism 3.0 at the local level, apart from the proposed multi-sided models?