9.1 Case Studies: Introduction

Cautionary Tales are fiction, stories based on the author's experience in commerce and ecommerce. They don't purport to be true, but simply paint a picture of what often happens in business, i.e. behind the annual reports, the blogs and the case studies as written up.

Case studies are not fiction, but the facts tidied for presentation, much as a scientific paper presents a flawless body of research that omits the dead-ends, funding problems, quarrels with colleagues and other troubles {2} that vex human beings.

Case Studies Grouped by Business Model Elements

Case studies where the business model elements {1} are worthy of special mention:

Model as a Whole

A simple business model can identify business plan weaknesses from the outset: Whisky Galore.

Simple business models can be very successful: Craigslist.

Business models commonly evolve: Google Ads.

Brilliant innovation will not save a company from a weak business model: Netscape.

Customer Segments

Companies that serve two or more distinct customer segments can be unbundled: Halberd Engineering.

Keyword research can help identify customer segments: Seascape e-Art.

Acquiring customers can be very expensive, especially with untested value propositions: Early Dotcom Failure.

Market segments can be increased by organic growth and acquisition: eBay.

High marketing spend to increase customer channels can be recouped by charging a premium for the product: Intel Corporation and GlaxoSmithKline.

A wide range of services and expertise is often needed to gain customer confidence: Liquidation, Inc.

Companies may be successful by focusing on a small segment of the market: Netflix.

New ideas can come from an unbundling of companies: Nespress SA from Nestlé.

Success can come from changing the customer segments targeted. Nitendo's focus on casual gamers.

Customer Channels

Third party channels are often useful to young companies: Fine Art Ceramics.

Selling direct to customers over the Internet can cut out middlemen and offer low prices: Dell Inc.

A new customer channel can be made with an add-on: Nitendo with hardware, Easy Diagnosis with software.

Marketing techniques may be mixed, new and traditional, even in Internet-based companies: OpenTable.

Customer Relationships

Ecommerce can weaken customer relationships: A Start.

A simple website may equate with honesty: Craigslist.

Companies adopting the customer relationships of another industry may secure a competitive advantage: Commerce Bancorp.

A focus on the customer is essential in many industries: Aurora Health Care and Wal-mart.

An outside-in, customer focused business model can be very competitive. Tesco plc.

Key Resources

Skills and technological know-how can be obtained by company acquisition: Cisco Systems.

Companies not possessing a key resource can outsource the work: Eneco Energie with Yokogawa.

Leadership is a key resource: Fiat and Apple iPod.

Internet technology is widespread in industry today: Fiat, Wal-mart and Aurora Health Care.

Key resources can be found in new relationships with companies and individuals: Proctor & Gamble.

Acquisitions fail if there is no synergy between the two companies: eBay with Skype.

Key Partnerships

Many businesses depend on partnerships with others in the field: Coins International.

Key partnerships with other industries can be vital: Apple iPod with music recording companies.

Key partners can include government institutions: GlaxoSmithKline with the FDA.

Key partnerships may not be obvious: SIS Datenverarbeitung GmbH.

Key Activities

First mover advantage can be overrated: Early Dot Com Failure, but does apply: eBay and PayPal.

Value Proposition

Ecommerce can improve what is offered to customers: Ipswich Seeds Ltd.

Skills acquired in one customer segment can be leveraged into another: Amazon.

A value proposition can be a public service: Andhra Pradesh e-Governance.

As a product or service matures, its value proposition may change: Commerce Bancorp.

Internet technology creates new services: Easy Diagnosis.

A commodity can be sold as a service at a premium price: Eneco Energie.

A product may arise through a coming together of several industries: e.g. Internet, digital and printing technology in Lulu.

Branding increases the perceived value of a product: Proctor & Gamble.

A business may have obvious advantages to many parties, but still be difficult to launch: Zipcar.

Cost Structure

Advanced web technologies can reduce costs and maintain competitiveness: Cisco Systems and Fiat.

Companies can turn something that doesn't cost them into a value proposition: Skype.

Revenue Streams

Revenues generally need to be invested in the product to maintain a competitive advantage: e.g. Google Services and Lotus Notes.

Companies can have paper values even when loss making: Amazon and Twitter.

Viable businesses may have slim profit margins: Zappos.

Other Models

Much can also be learned from SWOT (Amazon, Inc., Craigslist, Tesco plc, PayPal), Pestel Analysis (Tesco plc) Value Vectors ( Commerce Bancorp), Value Chain Analysis ( Tesco plc) and Porter's Five Force Analysis (Apple iPod).

Questions

1. Briefly describe the nine elements of the Osterwalder and Pigneur business model. Give one case study example of each.
2. What are customer segments? Give three Internet examples where customer segments are important.
3. What are key partnerships? Give two examples of key partnerships that not obvious on first inspection.
4. Explain what is meant by a value proposition, and give five case study examples.
5. What is meant by unbundling of a business? How can it be helpful? Give two examples.
6. Give some examples, noting the relevant case studies, of other business models/analyses.

Sources and Further Reading

1. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur. Wiley 2010.
2. #overlyhonestmethods. Twitter. January 2013.