Hello everybody and welcome to today's session on Hochschule St. Gallen business model patterns. Enjoy the next couple of minutes and slides. It's going to be very interesting. My name is Professor Dr. Bernard Ostheimer and I've been running my own digital company for 10 plus years.
So some of the experiences in the next couple of minutes. Will be on my own. Some of the contents I'm going to deliver is on a lot of research work done primarily by Hochschule St. Gallen. Enjoy. Today's session is structured into three chapters.
First of all, we're gonna have a look on the motivation. Second, we're talking about the dimensions of a business model. You might have heard one or two pieces of that already but just to give you a small recap the third chapter and biggest chapter is a list of a lot of interesting business model patterns identified by hokshule sankalen let's start with the motivation obviously as you all know guys industrial economies are changing on a very fast track.
On the right hand side you see a couple of charts which refer to a company which is called Kodak. As you might know Kodak manufactured analog cameras and film rolls and by the end of the 1990s. The digital cameras were on a rise and the analog cameras had their peak point around the year 2000 and then declining a lot.
Unfortunately, even though Kodak had a lot of ideas and IP patterns on digital cameras, Kodak didn't make the change from analog to digital cameras and the company totally crashed. Have a look at the lower picture. It shows the number of employees over time and the share price, which is really an ugly picture.
So, to sum it up, the clock rate of innovation is speeding up and some companies are still sleeping a little bit. So, let's have a look on what they should and could do. When you have a look at the innovation research. You know, there are a lot of companies and people who are doing interesting and excellent technological product innovations.
But it's a little bit more complicated when it comes to the innovation of the business model of the company. The business model innovation itself can be divided into more or less four parts. First of all, there's something like a startup starting from scratch, a new company, a new idea.
It could be the transformation of a business model from a current model changing into another, a new model. It could be the diversification of a business model that is more or less the same, but a second, an additional business model is created. Or it could be acquiring an existing business model by acquiring another company, for example. Obviously, chances are there. For example, if you have a look on the coffee beans market or the coffee market for at-home coffees, Nespresso is a very good example.
which is going to sell you more or less a kilo of coffees for about 80 euros. And if you go to Ali or Lidl store, you might know the kilogram of coffee costs probably about 10 bucks or 12 bucks or something. So Nespresso is very interesting.
How are they going to do that? So we're going to have a look at that from time to time. Unfortunately, they're not. too many european companies which are innovating on a business model so maybe we should have a look to the east and to the west and maybe to the south too and see what other people other countries other companies are doing and get an idea on that If you have a look at the digital companies, the leading global public e-players, you'll find a lot of logos here.
Take your time, have a look at the logos and try to identify the European-based companies. There's not too many in these slides, unfortunately. It's probably 1, 2, Klana, for example, Spotify, those guys, and many other companies originated where?
Obviously in the US and in Far East. When you have a look at the top 100 websites, this statistics is based in 2019, the big ones are US websites and Chinese websites. Very interesting.
Zoom in a little bit and browse around and get an idea of the big websites of the world. Most of those websites are run on cloud-based systems. So who are the big cloud infrastructure providers?
Have a look on the left-hand side. You will see, obviously, it's AWS, Amazon Web Services. There's Microsoft and Google in here. And we have some Chinese companies like Alibaba, for example, or Tencent.
Where's the European companies? Let me have a look. Unfortunately, I can't identify one.
That's really a pity. When it comes to the world's most valuable platforms, you'll find a lot of those in the US. You see the big red bubbles. Obviously, Apple, Microsoft, Amazon, Facebook, and Alphabet, Google's mother company, are those you might have suggested. You'll find some of them in the Asian Pacific region, especially Tencent, Alibaba.
pinyang and all those guys which are people's republic of china mainland chinese companies and there's some others like samsung and lg for example who are korean based or japanese based if you have a look at europe well obviously the bubbles are much smaller the biggest one is sap located in waldorf next to heidelberg fortunately june 1. maybe i don't know and the others are even more smaller you have spotify revolut clara which you might have expected in there please have a look at the african bubbles there is prosos and aspers i'm pretty sure there's gonna be a couple of african companies in the next five six seven years because they're going to be on the rise There are a couple of African countries which are really keen and really working on digital platforms. I cannot see too many Europeans actually on the rising numbers unfortunately. So let's have a look China versus US.
You've seen those are obviously the big fishes in the pond. If you have a look at the top 10 Chinese internet players, it is Tencent, Alibaba and Alibaba's financial part which is called Ant Financial. There's a company which is called ByteDance or in China it's Toujiao. Unfortunately my Mandarin is far from being perfect. Actually it's not.
being existent so it might be the wrong pronunciation you might excuse if you are able to speak mandarin just maybe give me a hint about the correct pronunciation by dance is a company you've heard of in the mid of 2020 because their main product is a product called tiktok an app which is really in the big discussions between the trump administration and some chinese officials but there are more like Didi and MyTuanDianPing which are really interesting platforms and companies. Those charts are taken out of the SCMP 2019 report on Chinese internet companies. SCMP is the South China Morning Post which is a newspaper published in Hong Kong and as far as I know owned by a guy called Jack Ma, founder of Alibaba.
If you have a look at the Chinese and US companies providing internet services, this is a more or less rough comparison between the western platforms you guys might really know like google for example for search shopping on amazon or ebay and the chinese or mainland chinese to make it clear companies on the other hand side so the typical search platform would be baidu and shopping could be done on jd.com for example you find a lot of companies you might never heard of but to be honest You guys should have a look on the Far Eastern platforms too. There are two ecosystems or families you should have heard of. It is first of all the BAT ecosystems.
BAT is an abbreviation for Baidu, Alibaba and Tencent. Baidu, you've seen... that on the last slide is providing a search platform and a lot of other applications and websites and platforms for example you can get some autonomous car software from value alibaba of course you might have heard of as the world's biggest online retailer when it comes to number of transactions but of course they have a lot of other websites and platforms around that too.
Tencent, another very important Chinese company or mainland Chinese company to make it clear, publishes not only the important WeChat app Sounds a little bit like a chat tool, but it's more or less a Swiss knife of an app. You cannot only chat with it, but you can do a restaurant reservation and you can get your passport, Chinese mainland, Chinese passport, of course, and stuff like that, pay with the app and much more. So it's not really comparable to something like WhatsApp. It's far more than that. It's an ecosystem.
Tencent, very important company based in Shenzhen, which is this city located next to Hong Kong on the mainland China border side. And you have TMD. TMD refers to ByteDance, MyTuan, Yanping and Didi.
So wait, T-ByteDance? Remember the last slide? Let me just skip back one slide. Two slides, bike dance on Mandarin it's something like this so that is the t in tmd we have maitian diaping and didi the last two companies of have been rising or from platforms uber-like platforms offering taxi services and ride-haul services all over china backends with their probably to western users most known product tick-tock The app logo should be under content and media, but there is much more.
Those companies are more focused on the core product and core ideas. And B.A.T., Baidu, Alibaba and Tencent try to build up a complete number of ecosystems, which is very interesting. Have a look at that, please.
When it comes to digital players in the world we could have a look at a couple of companies called the unicorns you might have heard of that term already unicorn is a company which is not listed on a stock exchange but it has a valuation that is bigger than 1 billion US dollars so when it comes to the most valuable companies summer of 19 there's obviously ByteDance You heard of that already with TikTok and Tuaqiao, the Chinese version of TikTok. We have Uber, we have Didi in the list, there's Airbnb in the list and Grab for example which is a kind of right hailing service too. Obviously most of the most valuable unicorn companies in the world are digital platforms.
So, when it comes to business models, keep in mind that companies running a digital business model might have some advantages compared to companies running a very physical business model. When you have a look at the different industries or sectors where those unicorn companies are located at, you'll see a lot of digital sectors in the lower part of this slide. Internet and software services, e-commerce, fintech, on-demand services, data analytics, social platforms and stuff like this.
All digital businesses. When you have a look at the parts of the world where those companies are located, you'll see the US and China cover, I don't know, probably three out of four of these unicorns. Fortunately, there's Germany in there. This statistic is done in summer 19. So it is not 8 but 7 right now because one of the unicorn companies which is called Biontech located in Mainz has done an IPO in the meantime and obviously cannot be counted as a unicorn anymore. By valuation most of the unicorns are smaller unicorns.
1 to 5 billion US dollars valuation. Only a couple of Those companies are huge, 20 billion plus US dollar valuation companies. You've seen them in the first slide on the top 10 unicorn companies. In Germany, well, let's have a look at the top 10 online shops running in Germany. We have Amazon and then only one third of these is Ottawa.
and then again probably half of this is Zalando. Of course you have to add MediaMarkt and Saturn to one company because it is more or less one company and some other of those guys but that is compared to the world market and some of the big economies in the world, US, mainland China, India of course, quite small numbers. Okay.
Let's talk about the dimensions of the business model in the next couple of slides. Obviously, as you might have already heard in your previous lectures or your previous studies, a business model can be divided into four dimensions. The idea I'm going to present now is more or less a St. Gallen way of seeing and structuring things. You can do that in a different way too.
I'm going to focus on that idea. So four dimensions is four questions you have to answer when it comes to the business model of a company. First of all, who is the target customer?
Who am I going to serve as a company? What are we as a company offering to this customer? What is the product or service we are offering to this guy? And how is the value proposition created for the customer? And why the heck are we earning money?
Why does the business generate a profit? So that is the four questions. The target customer, first of all. What are we going to offer? That is second.
what about the value proposition third and profits oh those guys done fourth right um you can see one idea how to run something like a figure on that which is uh well very nice obviously well by answering those questions by giving an idea why you generate profit who is the customer and stuff like this and you go a little bit into the dig into the details of the customer segments of the benefit promises you do of the value chain and the question of numbers you can make more details visible of the business model and This could be the basis for the business model innovation. So more or less, if we're talking about a business model innovation, you have to significantly change at least two of the four guys I told you about two minutes ago. If it's more than two, it's okay. If it's less than two, it's probably not a real business model innovation.
So if you're innovating an already implemented business model, please change at least two of the four dimensions we were talking about. To put it in a bigger picture, please have a look at this business model innovation framework. From a framework perspective, like big picture perspective, you have to have a look at the question of triggers. Why is there a business model innovation? If we're having or focusing on the digital part, In many cases, it's a technological innovation which forces you as a company to do some innovation on your business model.
It could be market-driven changes from the outside which forces you as a company to think about innovating your business model. Or your stakeholders, for example, your customers or your owners, want you to. change or innovate the business model.
There are even more triggers in the change of your business model. There could be a couple of innovation paths. We're going to focus on the business model patterns in this presentation, but that is not the only innovation path you can start with. Then you have to think about the design of your business model. remember that four dimensions it's in here and the question is where and how is the innovation seeable and detailed in the design and of course you have to think about the realization of that that is the implementation of the business model change into reality so motivation that's clear nothing but change is going on dimension we talked about that so let's have a look on the business model patterns what happened in san galen is they did some research extensive research And they figured out that a lot of business model innovation, more than 90%, is something like a recombination of 55 different business model patterns.
And those business model patterns will be presented in the next couple of slides. I tried to make it clear with some examples in there and to show in which way those business model patterns work. 55 business model patterns as the basis, the foundation for most of the business model innovation. So let's start with the first one.
It is called Add-on. Actually, the Add-on pattern is something you've seen and experienced a lot of time, I'm pretty sure. On the right hand side you see a screenshot of the current Ryanair website.
I was checking for a flight from Frankfurt Harn to Ireland, Cary and it cost me, let's see, a fare of 7 euros 99 cents which is quite cheap. And Ryanair offers me a couple of add-ons to my flight. For example, you can have the regular package which is 22 euros and some cents on top you can have a plus package and a flexi plus package with flexible tickets free check-in at the airport wow unbelievable fast track through security and stuff like that which is 80 euros on top so you get you get the basic product or service and you can add add-ons on the basic product which is obviously refers to higher prices.
Second pattern is affiliation. That is, if you've already had a look at the digital marketing stuff, refers to the point that there is or might be another company which is advertising your products and offers referring links to your shop. And if a customer comes to your shop and buys something using that referring link, the company offering that link the affiliate company gets a share of or a reward of the conversion so affiliation is something amazon is very actively using for 25 years or something let's have a look at the akido pattern that is japanese as far as i get it So again my Japanese skills are not perfect.
The pronunciation might be different. I call it Aikido. If you know how to pronounce it the correct way please let me know again. So that is actually a typical Japanese martial art thing and you use the strength of the attacker against this attacker which is quite smart by the way. And from a business model point of view, you're going to offer something that is very different, very opposing to the business models all your competitors are running.
On the right hand side, you can see the typical 1980s Akido example. The typical watch at that time is provided by Casio, for example. Very functional thing. You buy it once and then you use it all the time and on the right hand side you see Swatch which is an abbreviation actually for a second watch.
The watch not only as a functional thing but as a fashion statement or accessoire which you can change matching your shirt color or your shoes or your I don't know. So that is what Swatch changed in the business model. The watch not as a functional thing, but as a fashion statement and something you change very often. Very interesting.
Next pattern, it's about an auction. Obviously, you've heard about auctions. I'm pretty sure most of you guys already tried to auction something off at eBay or buy something on the eBay platform.
The auctions, of course, have been popular in digital platforms for... maybe 20 years before that auctions were only on specialized segments and industries the next pattern is about a barter about a trade actually where you trade in something not for money us dollars or something but for another product or another service a very popular example here is pepsi uh who was more or less the first u.s brand which was sold in russia in 1972 and the russians they couldn't buy the pepsis from pepsi america paying in russian rubles or something because of the export restrictions so they were not paying in us dollar or rubles but they were paying in vodka that is the and the bottle you can see here on the slide so it was pepsi coke trade in trade out russian vodka called stoli or something again obviously it's russian i cannot speak any russian if you know how to pronounce it the right way let me know thank you next pattern is about the cash machine obviously the customer pays in advance and So the company receives the money from the customer before the company itself has to pay for it. For example, have a look at all the voucher platforms like Groupon.
You buy the voucher first and then of course you pay for the voucher. And if you're using the voucher later on, the company has the money already. probably for quite a time. The cross selling pattern. is about offering products or services which are probably not closely connected to your core product.
A very good example on that is the Chibo stores, which are selling not only coffee, but a lot of other non-food products too. Crowdfunding, increasingly popular pattern in the last 10 to 12 years, where a product or company as it is is financed by a group of individuals who want to support the company the product the startup or whatever it might be so if you have time have a look on startnext one of the big crowdfunding platforms and have a look for interesting products and services you might want to support or maybe you got an idea for a product and you want to collect some money So this might be a place to go. The crowdsourcing idea or pattern is about asking the big mass of internet servers on their opinion or ideas. For example 99designs where you can say, okay, I need something.
I like a design for my company or my PowerPoint presentation. I'm going to start a contest and some designers can apply for that contest and you choose them. So it's about crowdsourcing.
A very common pattern is customer loyalty. Obviously you might have a Lufthansa, Miles and More loyalty program or you're collecting payback points when purchasing products at REWE or somewhere else. So this is the bonus programs, loyalty programs we're talking about.
Digitalization obviously is a very important pattern, for example, for a faster and simpler form of distribution. A typical A business model pattern is direct selling. You might have heard of that, of course, already. On the right-hand side, you can see some structural example on direct selling.
Actually, there are some quite old examples. For example, Vorwerk and Topervare are companies which are relying heavily on direct selling for tens and tens of years. Direct selling model obviously is about disintermediation of intermediaries, retailing companies in the smallest and most efficient way the manufacturer himself will directly sell to the customer without any intermediaries, any retailers in between.
E-commerce is selling products Online is a typical business model pattern you can use as an innovation. And the pictures on the right hand side refer to Red Bull as a typical company using experience selling. The value of a product, the Red Bull lemonade, which really tastes difficult, if I might say like, is enriched. by a very special experience, Formula One racing, jumping from the sky or whatever it might be.
Next pattern we're going to talk about for sure is a flat rate. You guys might be customer of a company offering their services with a flat rate, for example Spotify, Amazon Prime or Netflix. That is a fixed single fixed fee for a product in a special amount of time.
We could talk about fractionalized ownership. What is that? Obviously, typically, a car, for example, belongs to one owner. In the fractional case, a car belongs to a couple of owners. If you are talking about fleet-based subscription car sharing, there are a couple of Lots of owners and lots of cars.
So, fractional ownership is you own probably 30% or 40% of a car. There are a couple of very interesting businesses who rely on that business model pattern. Something you might know for years already is about franchising. Franchising, so you have a company which acts as the franchise provider, the franchiser it's called, and it offers a brand and an idea and products and corporate identity and public relations and an image, for example.
And it sells licenses to franchisees. Those are companies who are paying for the use of those services the franchisor offers. There are a lot of companies running as a franchise.
already you might know McDonald's for sure or in Germany Apollo Optic and many many more. The freemium business model pattern refers to a product or a service which is divided into two parts. The basic version of this product or service is offered for free and the company hopes of course that the customers really like the basic product and want to have extra features and customers are paying for those extra features so part of the product or service is for free that is the free part in freemium and part of the product of services the premium parts of the product and services um have a price so customers have to pay for it so it's a combination of free and premium it's called freemium of course you guys know for example dropbox for example or linkedin where you get a basis basic version of the product for free and for extra features you have to pay so the next business model pattern we're going to have a look at it's called from push to pull which refers to a strategy when a company makes its own processes more flexible to focus on the customer.
For example, on the right hand side, the chart refers to Zara, the apparel textile reseller, who has a close look to the local competitors. and actually give the information about the local competitors, products and shirts and trousers and stuff to the Zara Design Center in Spain. And they are able to react in a very short time on the local changes in style.
So the customer and the customers... way of behaving at the Zara store and at the local Zara's competitor's store directly influence Zara's products and services, designs and stuff like that. So the customer is the center or one center of the product innovation. The business model pattern called guaranteed availability refers to a product or service which is available for a guaranteed amount of time for example for 99.95 percent of a year it is available typically this business model pattern is used for software services and you have a service level agreement on the availability and the quality of service of a software platform for example your dropbox account or something like that the hidden revenue business model pattern refers to the question who is generating the revenue have a look on the right hand side so google itself offers something like the google search platform for example to you as a customer for free but They are placing ads around these search results and companies are paying a lot of money to place their ads around the search results for the search term you search for.
So the revenue doesn't come directly from the customer, that is you as the searcher, but it comes indirectly from companies placing ads around that. So that is obviously called the hidden revenue business pattern. The ingredient branding business model pattern refers to the fact that there are parts of a product inside the product which are not visible from the outside but they are actually referred to as a brand i think a very good example on that is the intel inside thing if you have a look at the computer and there might be a chipset inside from intel you cannot see that you have to open the computer and disassemble parts of the computer to see the intel chipset competitor could be amd for example And so what did Intel do?
Intel started to force the manufacturers of computers to put a sticker on the computer which says it's Intel Insight. And Intel was also running lots of TV and newspaper ads and stuff like that with Intel Insight, referring to the part of the product which is not visible, not directly visible to the customer, but it has a brand on it. So the integrator business model pattern is about horizontal and vertical integration of a company.
For example, a company which is manufacturing something like Zara, manufacturing t-shirts and stuff, doing forward or backward integration that refers to adding additional steps in the value chain. to the company's value chain like manufacturer selling the products directly to the customer or integrating companies which are producing goods and services which are used for manufacturing the suppliers integration of suppliers in the company itself so the layer player business model pattern refers to the company which focuses on being the intermediate company between a producing company and the next step of the value chain so it is a layer in between two steps of the value chain for example paypal is a layer player in between the online shop and the customer because paypal is handling the money transfer between those two oh that was a little bit quick we're going to talk about the leverage of customer data which is indeed a very interesting and very important question in generating and analyzing data about your customer So you need a huge amount of data, which we might refer to as big data for example, and you need a way of statistical methods and... High performance computing infrastructure to analyze your customers or suppliers data and you use the results of this analysis of the customer data to enhance your products and services.
A very good example On that is of course Google and Facebook and those digital platforms who are collecting huge amount of customer data and using the customer data for tuning and improving the products and services. The next business model pattern is about licensing. So obviously there are companies which are really research focused.
on the development of intellectual property and patents and they are trying to license their patents and intellectual property to others. But be aware this only works if there is a stable legal environment by the state where intellectual property is something you can package as a product or service. There might be countries in the world which do not focus too much on intellectual property and so this business model pattern won't work there right we should talk about the lock-in business model pattern what is that about the lock-in is the basic idea of walled gardens so there are companies who are trying to build up an ecosystem of a couple of products which fit together. And if you have one of the products, it is easy for you as a customer to use fitting other products from that company. If you're already an Apple customer with an iPhone, it is easy to ramp up an iPad and synchronize your data, photos and apps and stuff like that.
from the iPhone to the iPad. So Apple built some kind of ecosystem, some kind of beautiful walled garden with wonderful inside. And the more and the heavier you use the hardware and software of that company, the more complicated it is to change to another company like Google and Android devices.
So there are a couple of very interesting examples on the log n business model pattern actually. Let's have a look on the long tail pattern. The long tail pattern focuses not on the blockbuster, the hits, the top products, but it also includes a lot and lot and lot of products for example which are not sold too often in a store.
So yeah You don't have only the top products, the top sellers in your store, but you also have lots and lots and lots of products which are sold only a couple of times a year or only a couple of times in a couple of years. So those products belong to the long tail. You can see the long tail on the right hand side actually in yellow or orange or whatever that color might be. So typically YouTube and Amazon are long tail examples. Let's have a look on the make more of it pattern.
What is that all about? Sometimes a company has a lot of resources and the resources are used only in a specific amount of time in a year. For example, Here we have AWS, Amazon Web Services, and Amazon developed that, Amazon Web Services, from the idea that they are running a lot of servers throughout the year, but they need the servers only for peak times, before Christmas, for example, or something like that, and many other times of the year, those servers are running only on 10 or 20 percent of their possible performance so they started renting out during the rest of the year and the performance of the service and that is where aws amazon web services the world's biggest cloud service actually took off the mass customization is a very interesting pattern you can see on the right hand side nike shoe which can be customized by yourself on the website on different colors and materials and stuff like that and it is the using the advantages of mass production but with individualized or personalized products and services the no frills pattern refers to a company who is concentrating on what is really really necessary to provide the core of the customer service. So you can see the Ali shop floor on the left hand side photo here. Picture which is really focusing only on the core versus providing all the service and stuff on a small retailers outlet on the right hand side.
That is obviously a very big difference to the Nofril's shopping experience or non-experience at a Nofril's shop. the open business model there's the question of cooperation with partners in the ecosystem and the open business model opens up some cooperation for example a typical open business model affecting a marketing cooperation between companies in the same ecosystem so apple and producer of an app in the ios store are doing marketing cooperation i would be an example for the open business model open source is something very different open source is something which comes from the software development and the source code is open to the public and it is not private property so typically When you refer to operating systems, you have Microsoft Windows on the one hand side, which is a closed source operating system. You cannot download the source code and have a look inside it. And the Linux operating systems, on the other hand, where everyone who is able to read the source code can read it and change it.
So it is public property. It's freely available. to anyone who is interested.
A typical other example would be Wikipedia. The orchestrator business model pattern is focusing on the core competencies in the value chain and the orchestrator actually orchestrates all the other important steps of the value chain itself. But the orchestrator himself is only focusing on his or her core competencies. The pay-per-use pattern is very interesting as you as a customer are only paying for the amount of service or the part of the product you are using.
For example, if you are using a car sharing platform, you are not buying the car with an upfront fee, but you are only paying for the miles or the minutes. you're using the car itself. The pay what you want pattern is a kind of interesting thing because there is no fixed price for the customer.
It offers the customer the flexibility to choose a price which he or she wants to pay. In most cases, those prices the customer has freely. committing to pay a higher than the prices maybe the company would have set him or herself the peer-to-peer pattern refers to the point that there is a platform typically a digital platform which brings together different groups interested in one subject for example there are this is an example an example from india where some guys want to run a startup business and need some funding for that. And there are other guys who are lenders who are offering some funding, maybe parts of the funding for these startup guys. And the platform itself brings together the borrowers and the lenders of the funding.
Performance based contracting is a typical pattern which is offered by digital companies like Amazon Web Services again. So you as a customer are not buying the server but you're buying the performance you need at the time you need the performance itself. Razor and plate.
refers to a typical company offering a razor for shaving for free or for a very small price. But the plates you need to run the razor will be quite expensive. Some examples could be the inkjet and the ink you're going to buy for the inkjet or the Nespresso.
Coffee maker and an espresso coffee capsules. It's up. The rent instead of buy business model pattern refers to companies who are not forcing the customers to buy the product as it is, but they are offering the rent of the product.
For example, you can see here the Adobe Lightroom or Adobe CC plans. which offer rental software rental services for 99 oh no it's nine US dollars a month which is quite expensive if you add it up for 24 months or something like that the revenue sharing pattern refers to the share of revenues between different companies or between the company and the stakeholders of the company for example if you're a developer of an app and you're releasing the app on the apple app store the ios app store for 99 cents one-time payment of course there's tax in there and of course apple wants to have some of the revenue typically one-third of the revenue goes directly to Apple as the App Store running company. Reverse engineering is a business model pattern which refers to the fact that there might be companies who have a look at the product of some other company and they're reverse engineering the product and they are building up an own product or own service which is based on the experiences they made in that context. So here on the right hand side there's I think a Swiss company, Denner, who is offering coffee capsules for Nespresso coffee makers much cheaper than the Nespresso coffee capsules itself. The reverse innovation is quite interesting, that is, when a company which is located in an industrialized country uses products and services from a developing country and integrates those products and services into the own company and offers those products and services to the customers in the industrialized country too.
For example it is Renault and Dacia. Renault bought Dacia I think in 1992 or something 1999 as far as I remember please look it up on the internet to be sure about the right year and they offered the dacia duster car as a Renault duster car in some markets the robin hood pattern refers to the fact that some products or services which are sold to people with high incomes or in a rich industrialized country to some higher price as the same product is offered to people living in a poor environment. The self-service pattern refers to the fact that some companies just skip some parts of a service or a product and the customer himself has to do this serve himself for example so typically if you're going to an italian restaurant you'll be served at the table but if you're going to an italian restaurant by va piano or any of those similar restaurants you have to serve yourself ikea mcdonald's typical examples on the self-service the shop and shop business model shows that it is possible for a company to run an own store inside a store.
So here you can see a typical market with tools and stuff like that. And the company Bosch is running an own store with some own shelves and stuff in there inside the Hornbach or whatever it might be, a tool market. A solution provider is typically a full service provider.
offering not only the core product but a lot of services around that, which makes it easier for the customer not only to buy the product but to make use of all the services and to end services around that. The subscription business model pattern refers to the fact that the customer typically pays a regular fee. like a monthly weekly or daily fee maybe in your flat rate context like your netflix or spotify subscription as you can see in the chart on the right hand side which is unfortunately in german these subscription commerce revenues are on the rise currently the supermarket pattern refers to a company which sells a lot of readily available products already under one roof in one shelf for example like Toys R Us and companies like that. The target the poor pattern is referring to products which are made especially for people with a lesser amount of money on their bank account.
So on the right hand side you can see a Tata Nano, which is a very cheap car offered by the Indian company Tata to customers who are not able to buy a mid-sized car. From time to time this business model pattern works or does not work. The Tata Nano example didn't work out too good.
The trash to cash. Business model pattern refers to the fact that a lot of products which are not used anymore, like old mobile and smartphones for example, can be collected and can be reused or materials from those phones can be reused and in new forms or services. The two-sided market business model pattern refers to the fact that there might be companies who are offering interaction between several groups of customers for example Airbnb offering and addressing people who are looking for an accommodation on the one hand side and people who are going to offer accommodations as a host on the other hand side so it's like a two-sided market and they're addressing both those who are looking for a night somewhere and those who are offering a night somewhere the ultimate luxury business model pattern refers to the top level of the income period the rolls royce lamborghini guys and it's the opposite to addressing the The user-designed business model pattern shows that a customer can be both the manufacturer of a product and the consumer of the product too.
For example, if you're designing your own photo book on the CV page or app. The white label pattern allows some retailer for example or other companies to sell a many already manufactured product with their own brand Branding and their own label on it typical example are the Amazon basic products sold by Amazon But not produced by Amazon. So the question is ladies and gentlemen You've seen a lot of those business model patterns, which of those business model patterns might affect your ideas, your projects and your teamwork. Please think about that and identify business model patterns which fit your teamwork.
I hope you guys enjoyed today's lecture on business model patterns. If you have any questions, please don't hesitate to contact me. Enjoy the day and bye bye.