This week I was in Madrid to work together with XPLANE, the leading company when it comes to visual thinking in strategy & business. XPLANE will help me with the visuals for some examples and processes in my upcoming book on business model innovation.
Together with Pablo Ramirez of XPLANE we worked on several things, including the business model of the Apple iPod. Here is a first sketch – open for your input & feedback…
Don’t hesitate with comments & feedback. This is most certainly one of the examples we will use in the book. At every workshop & event I do, the Apple iPod comes up because of its influence on the music industry.
Hey Alex,
I’m interested to see the discussion on this business model evolve. I do think that while the business model includes all components it’s presentation seems to simple.
I would like to learn more about the exact relationships between Apple and the music and movie industry – which are complicated. Also, the iconic value of people walking on the streets with while earplugs is powerful, emotional and complicated.
Will you go into more depth on these and other issues?
Thanks for sharing
Steven
Hi Steven, I don’t know how deep I will go into the examples yet. There is always a lot to say. Goal is to point out the most important as to the business model.
Obviously, an important part of Apple’s success is also related to implementation (e.g. managing the relationship with the recording industry…).
Hi Alex,
Thanks for the second example!
Nice how you use visuals, instead of words or sentences, to describe the business model.
I suppose the lock on the iPod at Customer Relationships refers to the lock-in Apple creates? You mentioned this already before, and I certainly agree it is an important part of Apple’s business model.
Peter
Hi Alex,
I really can not agree with the Apple/Ipod business model suggested, I'm sorry!
I am sure you have studied the Apple 2006 & Apple 2008 Cases Studies, published by Harvard Business School.
Both cases conclude (I do agree) that Apple has been successfull delivering products and was not able to build a solid competitive advantage through a Business Model (they are smart guys, thet tried, but…). They are now trying another path, expanding to retail (apple store houses, brand recognition), but they could not complete a value proposition for PC, Ipod & Iphone products.
You are doing a fantastic job, go ahead!
Marcel
Alexander,
I think it is absolutely wonderful that you are working with Xplane to try to move from a textual description into a graphic description of a business model.
So I’m thinking
Strategic Partners: Music industry, Ipod manufacturers
Key activities: Design of product
Key resources: The apple brand, some people, Ipods, Music on Cd’s, Music on records with cords attached to them
Value proposition: Simplicity of handling the music on Ipod as well as the computer
Customer relationship: Fan based
Distribution channels: Website for downloading music, Apple store for selling the product
Customer segment: Any person who are happy using ear buds and an Ipod
Cost: Staff, Factory, Brand
Revenues: Music industry agreements, Product sales
It gets confusing sometimes like in the “Customer segment” the icon is a bit to generic, and in the “Key resources” the icon with the cord really is hard to grasp. But then again as it is icons and no text it is all up to the individual to interpret the visual.
The power in the graphic description is that in all its simplicity it lures you into thinking about each part of the business model.
Hi Alex,
I appreciate the example application of your template to a case that we all know.
While I agree that for us as the audience, interpreting the the icons can be difficult, I think the point is how the template can a) help tell the story, and b) help one organize their strategy.
I look forward to more.
Mark