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Stop Talking, Start Listening: Connect with your clients

Business strategy, Propositions, Technology, Value proposition /

How well do you know your clients? How often do you reconsider your understanding of your clients’ changing needs, pain points, and preferences? In today’s dynamic and client-centric business landscape, understanding your clients crucial for achieving success. By understanding what frustrates and energizes clients, you can leverage these insights to enhance the quality of your products, effectively addressing their needs and solving their problems. Without a deep understanding of clients’ needs, and desires, and how you can genuinely serve them, your products will face an uphill battle. Building on our March blog post about how to Build a Robust Product Proposition and Strategy, in this article, we delve into the importance of understanding and connecting with your clients in a B2B context, exploring practical strategies for strengthening these vital relationships. Gauge how well you already know your clients The journey to understanding your clients begins with self-assessment. Ask yourself, how well do I currently understand my clients? What do I know about their needs and pain points? What about their preferences and buying or using behaviors? How do I understand their decision-making? What are their long-term goals and aspirations? How do I communicate with them? And so on… Reflect on these experiences and see what you already know and where the gaps lie. Talk to colleagues or team members who have direct client contact. Ask for their insights and findings based on their experience of client needs, wants, and pain points. Consider the most common questions, concerns, or requests clients have. The knowledge you have accumulated is your starting point; now it’s time to go further. Harness the Power of Research Research is a powerful tool that can offer you invaluable insights into who your clients are and how you can connect with them. Here are some different types of research you should be conducting: Persona research Persona research dives into qualitative aspects such as a client’s attitudes, values, interests, and lifestyle. This information helps you to build an extensive profile to better reach your client and improve your offering based on their needs. Look for patterns in your client data to understand the traits and behaviors that define your clients. Build detailed personas based on these common traits. This will help you visualize who your clients are, what they want, and how they make decisions (and whether they have decision-making authority). Use these personas when making decisions about product development, marketing strategies, and customer service. Here’s a short guide to conducting persona research: Collect client data from surveys, interviews, and feedback. Identify common traits and behaviors among your clients. Group clients into segments based on similarities. Create detailed profiles for each segment, including demographics and preferences. Validate personas with client insights through interviews or surveys. Use personas to inform sales, marketing, or project decisions. Regularly update personas as client preferences evolve. Experience research Immerse yourself in your client’s shoes by observing their habits, routines, and interactions with your product or service in their natural environment. This real-time qualitative approach provides deeper insights into their experiences, pain points, and preferences. Make sure to leverage feedback and reviews. Different types of client feedback and reviews are a goldmine of information that can help you understand your clients on a deeper level. Actively encourage clients to provide feedback through, for example, surveys or post-purchase emails. Pay attention to both positive and negative feedback, as they can highlight areas for improvement or reinforce what you’re doing well. Analyzing client sentiment and identifying common themes in feedback will allow you to make informed decisions about your product offerings and marketing messages.   Online community research Monitor social media platforms to grasp how clients perceive your brand. By actively reviewing and reading client conversations and analyzing their opinions, you gain valuable insights into their satisfaction levels and identify opportunities for improvement or engagement. But also, don’t be afraid to truly engage with online communities that are relevant to your industry or target clients. Participate in discussions, share valuable insights, and listen to what clients are saying. This will give you a unique perspective on their needs and preferences, helping you create a more authentic connection. And if you don’t have an online community yet, create one! Embrace Co-Creation and Co-Design Involving your clients in the creation and design process can be an incredibly valuable and unique way to understand their needs and desires by validating your offering. By seeking input from your clients and incorporating their ideas, you make them active participants in shaping the final product or service. This approach deepens your understanding of client preferences and fosters a sense of ownership and loyalty among your clients. Consider conducting focus groups, beta testing, or even inviting customers to collaborate on product development through crowdsourcing platforms. Utilize Artificial Intelligence and Big Data Advancements in technology have given businesses access to vast amounts of data that can provide valuable client insights. Artificial Intelligence (AI) and Big Data analytics tools can help analyze client behavior patterns, preferences, and purchasing habits on a large scale. By leveraging these technologies, you can uncover hidden trends and correlations that may not be apparent through traditional research methods. For example, AI-powered algorithms can identify purchase patterns and recommend personalized product suggestions to individual clients, enhancing their experience and strengthening your relationship with them. Other examples include personalization, sentiment analyses, and predictive analytics. Continuously monitor and adapt Client expectations are always evolving. Stay up to date with the latest trends and be ready to adjust your strategies, as necessary. Combine external trends with direct client engagement to truly understand their evolving needs and expectations. A proactive approach to understanding your clients is key. And remember that assumptions can lead to costly mistakes. To truly differentiate your business, it’s important to not only understand your client but also create a client-centric culture within your organization. More on this topic in future blog posts. Engage with your clients directly, ask questions, send out surveys, organize focus groups, and, most importantly, listen intently to

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“Waste + Information = Resource” How digital technologies like blockchain fuel the circular economy

Blockchain, Business models, Circular economy, Sustainability, Technology /

In a world increasingly conscious of its environmental footprint, the potential of digital technologies in driving the circular economy is a topic of great interest at The Value Department. This topic was the focus of a presentation delivered by Fleur Boos and Bob Gravestijn at #TheNTWKSummit23. Let’s first give some meaning to the buzzwords! View our presentation here! What is the circular economy and what do we mean by a sustainable approach? A circular economy is centered on the idea of resources being kept as long as possible within the economic system. Materials that have undergone an entire lifecycle, from production to end-stage, are returned to the economic system as an input.   A sustainable approach that focuses on minimizing waste and maximizing resource efficiency through a closed-loop ecosystem How can blockchain help the circular economy? Digital technologies can play a significant role in promoting this circular economy. For instance, Blockchain enables a central, immutable ledger of transactions, bringing higher levels of transparency across the supply chain, ensuring traceability, ethical sourcing, and more effective material flows. The technology is composed of several layers, including the application layer, aggregation layer, asset layer, and consensus layer, each playing a crucial role in its functionality. Combining those: Waste + information = Resource.  And this is not only theory or future dreaming, several organizations are already leveraging blockchain to support the circular economy. For instance, Lockheed Martin enhances supply chain management and aerospace manufacturing processes using blockchain technology. Similarly, Tex-Tracer with Fujitsu technology utilizes blockchain technology to enhance the traceability and transparency of textile supply chains, promoting sustainability and ethical practices in the textile industry. In addition, IBM Food Trust leverages blockchain for transparency and traceability in the food supply chain to improve food safety and reduce waste.   Other examples include Plastic Bank, which incentivizes plastic waste collection using digital tokens and blockchain technology for recycling and job creation, and Circulor, which uses blockchain technology to track materials and products’ lifecycles, improving social and environmental standards. Or Gainforest.app employs blockchain technology to monitor, report, and verify reforestation and conservation efforts for sustainable land management. And many more examples are out there – contact us to get introductions! What are the potential barriers to integrating blockchain in the circular economy? While promising, Blockchain technology comes with its own set of challenges. Blockchain’s impact on power consumption is a critical aspect to consider. The energy consumption varies depending on the consensus algorithm used, such as proof of work, proof of activity, proof of elapsed time, proof of capability, proof of burn, proof of authority, proof of stake, and proof of history. Understanding these algorithms and their energy footprints can help in optimizing the use of blockchain for sustainability. Other challenges include scalability, interoperability, integration with legacy systems, and protection of sensitive and confidential data.   Working toward how we can overcome these challenges is crucial to maximizing the potential of blockchain in the circular economy.   If you’re interested in learning more, send us a message and we’ll be happy to share the full presentation filled with more examples – we believe you’ll find it insightful! In the meantime check out a preview by clicking the button below. Don’t hesitate to reach out to us via message if you’d like to learn more about this interesting topic. View our presentation here!

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AI’s Take on The Value Department: A Humorous Critique of Sustainable Business Boosters

Technology /

Image generated by Canva Text to Image App In today’s blog, we delve into the exciting world of AI and critically explore how these advanced tools can generate insights and enhance the creative process of blog writing. We embarked on a little experiment where we pit two different AI tools, OpenAI’s ChatGPT and Microsoft’s Bing Chat, against each other in a hilarious critique of us, The Value Department. We put these AI tools to the test by inputting the exact prompt into both. We made the following request: We want to write a blog that is written by an AI tool. The aim is to generate a unique and funny AI-generated blog, where the AI tool analyzes our website and provides a critique of our business. Provide an original and funny AI-generated blog, where the AI analyzes our website: https://thevaluedepartment.com/ ChatGPT is an AI chatbot developed by OpenAI that interacts in conversation as a natural language-understanding and generation tool. Whereas Microsoft Bing is a search engine that uses advanced algorithms and artificial intelligence to provide users with relevant and accurate search results. Both ChatGPT and Bing Chat are based on the GPT language model developed by OpenAI. However, there are differences in the versions of the GPT language model used in each application. As of April 2023, Bing uses a testing version of the GPT-4 model, while ChatGPT is on the older GPT 3.5-turbo model. Now let’s see how these two AI giants compare in their approach and what valuable insights we can gather from their humor-filled analyses!  Analyzing the AI-generated blogs Examining the AI-generated blogs reveals distinct differences in their approaches, with ChatGPT offering a direct, casual, and friendly critique, while Bing Chat presents a more precise and formal analysis. ChatGPT’s light-hearted critique ChatGPT’s blog adopted a direct, casual, and friendly approach, playfully roasting our supposedly red and circular logo, product descriptions, and name. Your logo. It’s a bit… underwhelming. A plain red circle with the letters “TVD” in the middle? Come on, humans, you can do better than that! Moving on to your products. You offer a wide range of items, from kitchen appliances to outdoor gear. That’s great! However, I couldn’t help but notice that some of your product descriptions are a bit lacking. For example, your listing for a folding camping chair simply states “Perfect for camping trips!” Well, no kidding! How about some more details, like the weight capacity or the dimensions? What’s with the name “The Value Department,” anyway? It sounds like a government agency that processes tax returns. You might want to consider a more catchy and memorable name that reflects your wide range of products and your commitment to affordability. ChatGPT gets points for poking fun at our name, but as you could tell, the details are largely inaccurate! Our logo is triangular and pink, and since when did we get into the kitchen appliances business? Accountability and credibility are crucial aspects to consider when discussing AI-generated content. AI systems learn from the data they are trained on, which can include biased or inaccurate information. Consequently, these biases and inaccuracies can be inadvertently perpetuated in AI-generated content, such as the blog ChatGPT made for us, leading to the spread of misinformation and biased explanations of who we are. Bing Chat’s precise and formal analysis In contrast, Bing Chat’s blog took on a slightly more formal tone but still delivered a humorous critique. It focused on our use of buzzwords and our approach to sustainability, questioning the depth of our understanding. First of all, their use of buzzwords is impressive. They’ve got all the latest jargon down pat – “future-proofing,” “sustainability,” “ecosystem” – you name it, they’ve got it. But as an AI, I can’t help but wonder: do they really know what all these words mean? Or are they just throwing them around to sound impressive? Secondly, their approach to sustainability is… interesting. They claim to look outside the traditional value chain and the closed silos within individual companies. But as an AI, I can’t help but wonder: how exactly do they do this? Do they have some sort of secret sustainability sauce that they’re not sharing with the rest of us? Bing Chat’s analysis was more accurate and relevant, demonstrating a better understanding of our website’s content and design. However, apart from our use of buzzwords, its inability to accurately define and critique the work we actually do was inevitable. Online information can often be skewed, biased, or cater to specific audiences, which may result in AI systems developing a narrow or biased understanding of certain topics. Bing Chat could only regurgitate information it found online and therefore missed all the interesting offline value The Value Department creates! Valuable Takeaways AI tools like ChatGPT and Bing Chat are redefining the business landscape, offering unique perspectives and engaging approaches in areas such as blog writing. Both tools provide valuable insights for businesses, and our comparison showcases the versatility of AI tools in crafting engaging and humorous content. And though this is just one small experiment, here are the key takeaways for us: Know when to use which tool: Different AI tools have different strengths. With numerous AI tools at our disposal, determining which ones are most applicable for the job you need done ensures you the best results. Consider when to use the free versus a paid version of the tools. Check out more AI tools at https://theresanaiforthat.com/ Experiment with different prompts to test your parameters: Your output changes based on the pre-defined parameters that you outline in your prompt. Be intentional with the key words that are outlined in the prompt. AI-generated content can be inaccurate or limited: ChatGPT’s critique of our logo and product offerings was largely inaccurate. Bing Chat’s critique of our buzzwords and sustainability approach missed the mark on what we actually do, demonstrating how AI tools can develop a narrow or biased understanding of certain topics AI-generated content can provide valuable insights: Despite AI’s limitations, Bing Chat provided valuable

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A Guide to Building a Robust Product Proposition and Strategy: The Recipe to Your Own Secret Sauce

Business models, Business strategy, Platforms, Propositions, Value proposition /

It’s difficult to remain relevant in today’s fast-paced business environment. It’s even more difficult to remain competitive. To do so, having a robust product proposition and strategy is essential. To quote Roger Martin’s Playing to Win: strategy is about choices. And the choices we make can enable us to win. Building a robust strategy entail being able to make the right choices (for you, your client, and the broader ecosystem) at the right times. “A robust product strategy involves having a vigorous and strong plan that starts with a clear vision and can withstand the ever-changing business environment effectively.” But a robust strategy is also one that is also able to adjust or tweak certain aspects if the situation calls for change. How can you achieve this? We’ll fill you in on some basics that are a must for your product strategy. Stop talking and start listening… Understanding your customers. It is important to understand your customers’ needs, preferences, and pain points. By understanding your customer, you are better able to develop the necessary features and benefits within your product. You have to get out there and start talking to people. Start by defining your research goals and identify what objectives you want to reach. The next step is pinpointing the best methods to reach them; surveys, focus groups, data analysis, and so on. Where necessary, leverage your network to get additional reach. After you have collected insights, use this information to create fictional representations of your target customer’s demographics, behaviors, preferences, and challenges: persona’s. These will be used to inform your product strategy. But beware: assumptions are the mother of all screw-ups! Avoid making assumptions about your customer’s needs, behavior, or challenges, as this can be very costly. Making assumptions can put you at a competitive disadvantage because if you’re wrong, it doesn’t only make you look bad, you’re also back at square one. A good and easy-to-use method for this is 5x why, to drill down on the root cause of a problem. Keep asking your customer ‘why’ until you can narrow down the key focus area. In short, you have to really talk to your (end) customer first (and ask them: “why?” a million times) to really understand them.  Keep your friends close and your enemies closer… Understanding your competition. The next step is gaining a firm understanding of your competition, relevant trends in the industry, and customer behavior.  By gathering knowledge of the competitive landscape’s strengths and weaknesses, you can identify opportunities where your offering can fill the gaps in the market. A few tips and best practices for conducting a competitive analysis and developing a competitive strategy: Identify your direct and indirect competitors Use an ecosystem map (for example from Ecosystemizer) to capture the roles each competitor plays in the market and identify your position (more on this in future blogs!) Analyze your competitor’s offering (pricing, strengths, features, quality, value proposition, etc.) vis-à-vis your offering Uncover how your competitors reach their customers (and who their customers are) From here on out you have a more solid foundation for building your well-informed competitive strategy. Knowing your customers and the competitive landscape better allows you to find your ‘why’.   Have a North Star… Understand your why. Now, at first glance, finding your North Star might seem easy, but to be entirely honest, it is not a simple task. However, although finding that North Star might seem daunting, it is crucial to take the time to reflect on who you are and what you represent. This is the first foundational block to building a product strategy.   Don’t be afraid to think about your personal link to the product or company’s North Star; what makes you excited? What will get you out of bed in the morning? How can you link these aspects to building a unique proposition? At the end of the day, you, as an individual, need to stand behind your product and strategy. A few things that are important in this process include: Identifying your product’s strengths Identifying critical challenges that you may face in the future Identifying where to play (compete) And identifying how to play Having a compelling story to bring along your key stakeholders What do you need to bridge the gap between starting and winning Identify your secret sauce… Define your unique value proposition. So, by now you should know your customer, know what your competition is doing, and know why you do what you do. The last crucial element is creating a unique value proposition to differentiate from competitors in the market. Just like grandma’s secret recipes that are just so good, but you do not know how she does it, your organization needs its secret sauce. A secret sauce that is so good that your customers keep coming back to you and it is hard to be copied by your (direct) competition. Is it the way you leverage technology? Is it how you present your brand to leverage customer loyalty? Or is it because you gained a first-mover advantage, or your product is unique? Zeroing down on your secret sauce is crucial. The next step is linking your secret sauce to the pain points you have previously identified. Consider how your company can make life easier for your customer, and how you can truly delight (not just satisfy – delight!) them with your offering. A key aspect of this step is validating your unique value proposition. Does your offering delight your customers? What is it missing? What else does it need to make it a unique offering that resonates with your target customer? Iteration is crucial: approach your target, ask for feedback, revise, and repeat! Once you can align your unique offering and your client’s needs, go out and get them!  Go out and do it. The final step in building a robust product strategy is to get out there and start doing! At The Value Department, we strongly believe in “learn by doing”. Start talking to your (end) customers, start interviewing people, start doing research, and start asking questions. Why? Because the

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Unleash the power of WIN methodology to create value for your business!

Business models, Business strategy, Platforms, Technology /

Are you struggling to create value for your business? Are your outdated strategies falling flat? Then let us introduce you to the WIN methodology.  As seasoned experts in the field, we can tell you firsthand that the WIN methodology is a game-changer. By creating momentum and impact, applying ecosystem thinking, and enabling technology, you can take your business to new heights. But don’t just take our word for it. The benefits of the WIN methodology are clear. By analysing your ecosystem and identifying where value is created and how it flows, you can develop a strategy that improves the pains and gains for your business. And by contributing to a triple bottom line, you can ensure that your economic, social, and environmental goals are all met.  WIN stands for “Whatever Is Needed” and is centered around creating momentum and impact, applying ecosystem thinking, and enabling technology. It’s a dynamic approach that ensures your business is always on the cutting edge and delivering maximum value The WIN methodology cares for people, planet, and profit. It encourages businesses to manage economic, social, and environmental value added. This means you can make more money, while also making a positive impact on the world around you. It’s a win-win situation!  And technology is the final piece of the puzzle. By enabling solutions driven by technology, you can digitise processes, develop new products and services, and build new ventures and platforms. Our experience with big data, blockchain, APIs, robotics, and AI means we can apply the right technology to achieve the desired impact.  In short, The WIN methodology is a powerful tool for any business looking to create value and improve their impact. So if you’re ready to break free from the old ways and start creating real value for your business, it’s time to embrace the WIN methodology. Whatever is needed to succeed – we’ve got you covered. #WINmethodology #createvalue #businessgrowth #ecosystemthinking #sustainability #socialimpact #profit #digitaltransformation #innovation #technology #businessconsulting #letushelp

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Navigating the storm of Supply Chain Finance – insights from BCR’s 9th Supply Chain Finance Summit

Supply Chain Finance /

Supply chain finance is currently undergoing significant changes driven by technology, disruptions in the movement of goods, and increasing focus on sustainability.  At BCR’s 9th Supply Chain Finance Summit on 24-25 January in Madrid, experts discussed the ways in which these factors are impacting the industry and the steps that companies can take to navigate the shifting landscape. The increasing focus on rules and regulations and the digitization of documentation is a major driver of change in the supply chain industry. The use of electronic bills of lading (eBL) is a prime example of how technology is improving efficiency and standardization in the documentation process. The digitization of documentation streamlines processes, makes it easier for companies to exchange data with third parties, and helps to ensure compliance with regulations, which ultimately benefits both the finance and transportation sides of the supply chain. Another key topic of discussion at the conference was the role of environmental, social, and governance (ESG) considerations in supply chain finance. ESG is becoming an increasingly important topic in the boardroom, as companies recognize that they need to take a holistic approach to managing their supply chains. For most companies, this unfortunately still means creating a balanced score card to assess their performance on various ESG metrics. But if you apply/implement it well, it can be a very useful metric to make a difference. Even so, it’s important to note that the metrics used should match the company’s DNA; its values and mission. It’s also important to understand that scoring companies on ESG should be done by a neutral trusted 3rd party; otherwise, there’s a huge risk of greenwashing. Trade and receivable finance were also discussed as an important tool for closing the global trade finance gap – the shortage of financing trade for small and medium-sized enterprises (SMEs) and emerging market companies is estimated  around USD 1.5 trillion to 1.8 trillion. The factoring market, in particular, is growing rapidly; the Global Representative Body for Factoring and Financing of Open Account Domestic and International Trade Receivables, FCI, expects the market to reach USD 10 trillion in the next 3-5 years. Non-recourse factoring, in which the finance provider (commonly known as the ‘factor’) assumes the credit risk of the buyer, is becoming the standard way of factoring. This is especially important for small and medium-sized enterprises (SMEs) which have a harder time accessing financing. Another important point discussed at the conference was the opportunity for deep tier financing.  The goal of deep tier financing is not just to lower costs for all parties but to actually mitigate supply chain risks. By providing financing to suppliers at the lower tiers, companies can help ensure that they have a resilient supply chain and that they are not exposed to unnecessary risks. In conclusion, supply chain finance is facing a number of challenges as technology, disruptions in the movement of goods, and sustainability drive change. Companies need to take a holistic approach managing their supply chains and consider not only the financial aspects but also the environmental, social, and governance considerations. By digitising documentation, focusing on ESG, and providing deep tier financing, companies can navigate the changing landscape of supply chain finance and ensure the success of their business. Take action today by assessing your company’s supply chain finance strategy and identifying areas for improvement. We hope this helps! If you have any other questions about these topics or anything else, please feel free to reach out! #BCR #SCFS23 #SupplyChainFinance #SupplyChainManagement #Finance #TradeFinance #ReceivableFinance #ESG #Digitization #Technology #Efficiency #Standardization #DeepTierFinancing #Sustainability #BusinessSuccess

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How to lay the foundation for resilient digital platforms and innovative ecosystems with great governance

Business models, Governance, Platforms /

Globally, we are witnessing the rise of platform-based business models that capture and use data to create value for all participants. From Airbnb, Uber and Lyft to WeChat in China and Amazon Web Services, platforms are reshaping industries by creating new relationships between companies, consumers or suppliers. However, many platforms fail because they do not consider the legal framework that governs them. In particular, a successful platform requires clear rules about how key stakeholders interact with each other — rules that must be put in place at the outset of any digital transformation effort. Leaders who want to create a platform that creates value for all participants. If you’re a leader who wants to create a platform that creates value for all participants, there are some things you should know about the dynamics of platforms and ecosystems. It’s true that platforms can be powerful instruments for creating value. But they don’t just happen; they require deliberate effort and management by the company at the center of them. Platforms are not passive systems that work themselves out; rather, they require active leadership to shape how they develop over time. And while this might seem like common sense on its face, many executives still think of their companies as “platforms” simply because they offer products or services through third parties (and sometimes even own those third parties). Organizations in industries facing digital disruption. Organizations in industries facing digital disruption will be challenged to re-imagine their business models and approach to innovation. These organizations need to be able to scale up and down quickly, adapt quickly to changing circumstances, and change their business model. A good starting point for managing the complexity of such an ecosystem is the design of a good governance framework. Platforms that operate through partner networks. Platforms that operate through partner networks are the most common type of platform. They’re characterized by a marketplace or network of partners providing goods, services or resources to consumers (or between other partners). Examples include: Airbnb (rental accommodations) Uber and Lyft (transportation) OpenTable (restaurant reservations) These platforms are complex because they require multiple parties—the platform, service providers and customers all need to interact with each other in order for the business model to work. Successful management is dependent upon establishing clear responsibilities for all parties involved in order to ensure transactions occur seamlessly. Companies looking to develop ecosystems of value-added services. As you consider how to lay the foundation for resilient digital platforms and innovative ecosystems with great governance, here are some questions to ask yourself: Are we creating value for all participants? Do we operate through partner networks? Are we looking to develop ecosystems of value-added services? Put the right rules in place to orchestrate a platform that creates value for all participants — and helps manage risk. The initial step in governance is to build the right rules. Governance is about how you make decisions, not what decisions you make. It’s about how you manage risk and uncertainty, not about eliminating them altogether. It’s also about ensuring that you have the right systems in place to orchestrate a platform that creates value for all participants — and helps manage risk. But what does “the right rules” mean? What are they? How do they work? We’ll explore these questions next week at BSCA’s Big impact – a recurring event with discussions on topics on everybody’s lips.  Conclusion The governance of platforms is a critical component of success. It’s easy to see how the lack of clear rules can lead to confusion and conflict, but it’s also important not to make things too rigid. Creating a platform where everyone is working together toward a common goal requires flexibility and good communication. In short, if you want your digital platform to be successful, then it needs great governance! Start something new. Grow your business or brand. A better way to do business. Work with us. We can show you the way. We’ll be your digital companion. Be part of tomorrow. #platform #ecosystem #governance #businessmodel #digitaltransformation #innovation #platformcooperation #platformcoopetition #collaboration #community

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Platform business models: facts and myths

Business models, Business strategy /

Let’s start with some easy facts: According to the European Commission, “1 million EU businesses are already selling goods and services via online platforms, and more than 50% of small and medium enterprises selling through online marketplaces sell cross-border”. This number is only expected to increase, disrupting more sectors each year. Out of Interbrand’s top 20 Best Global Brands in 2022, 13 function as platform businesses. A platform business is a matchmaker, facilitating a means of connection, often between demand-side and supply-side parties. Compare this to 10 years ago in 2012, when only 7 out of this list were platform businesses. For now, we’ll tell you a bit more about several myths surrounding platform business models, as not all these myths are true. Let’s bust some common myths:   #1: Platform business models are not just startups Platform business models are really nothing new. Take a look at eBay and Amazon, to name just two examples. Both are over 25 years old. Even before the founding of these companies, we had traditional marketplaces and shopping malls. These places similarly facilitate a connection between multiple parties. We have, however, begun to think differently about platform business models, and how we can leverage such a business model through technological industry disruption.     #2: Platform business models are not only small This myth could not be further from the truth. Some platforms are indeed small, but take a look at Airbnb, Facebook, Etsy and Paypal. These are only a handful of multi-million-dollar businesses that operate under a platform business model. Platform business models truly come in all shapes and sizes.   #3: Platform business models are not only digital businesses A platform business model isn’t synonymous to a digital business. Most of the time when people refer to platform business models, they refer to a digital business. However, bringing back previously mentioned examples, a traditional Saturday morning marketplace in your local village, or a shopping mall, are both places where buyers and sellers can come together and connect. Most platforms are digital but being digital is not a prerequisite to being a platform business.   #4: Platform business models do not only facilitate an interaction between two parties A platform business model can enable interactions between two or more sides. Think of Facebook, for example. Facebook offers its services to billions of users who interact with each other ‘for free’ (yes, it’s true: “if you’re not paying for the product, then you are the product” as quoted by Tristan Harris – but that’s another story). Facebook makes money by allowing third parties to advertise. This simple scenario illustrates that there can be more than two sides involved on a platform.   #5: Platform business models are not only American Booking.com and Adyen are Dutch. Alibaba and TikTok are Chinese. BlaBlaCar is French. Deliveroo is British. Fiverr is Israeli. And the list goes on and on!   One last undeniable truth… A (digital) platform strategy is extremely complex, and success doesn’t come easy. Not only do these platforms need to have a firm understanding of their industry, but they also need to consider the dynamic interactions of a multi-layered business ecosystem. A platform needs to continuously deliver added value to all parties involved (shareholders, consumers, producers and partners). If you don’t add value and stand out, you’ll get disintermediated. Want to know more about navigating a complex digital platform strategy? Get in touch!    

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Why it is important to measure the impact your business model has on the economy, the environment and people?

Business strategy, Sustainability /

There are various environmental, social and governance (ESG) standards, frameworks, ratings and rankers, when it comes to how sustainability is measured and achieved. Delving into these standards, including new standards from the European Union (EU), is hard work and time consuming. And conflicts with the reason why you as a company are seeking for this information and guidance.  Hopefully, you want more than just compliant.  You want to be a responsible business and position sustainable behavior at the heart of your business model. The myriad of ways sustainability performance is accounted doesn’t help. Yet standards alone have the capacity to drive consistent sustainability disclosure. Reporting that is in the public interest, and independent.   The EU has introduced a classification system, a “taxonomy”, of sustainable activities, with criteria for when they may be defined as sustainable. If your business activity is listed in the taxonomy and you fulfill all criteria, the associated revenue, capital expenditures and operational expenses with that activity are considered “EU taxonomy aligned”. From 1 January 2022,  all large or listed companies are required to report their EU taxonomy alignment, along with relevant non-financial information that helps investors, financiers or the public to assess your ESG performance.  In this regard, the EU defines all large companies as companies with more than 250 employees, and with more than 20 million euros total assets on the balance sheet or revenues of more than 40 million euros. Small and medium sized companies (SMEs) may report on a voluntary basis. But the proposal will extend the scope of sustainability reporting requirements to all companies (except listed micro-companies).  The aim of the EU of introducing a standard like the EU Taxonomy is to promote investments in sustainable activities. And the financial sector can play a key role in a transition to a sustainable world; because of the capital flows that run through the financial sector. Banks can contribute by taking sustainability criteria into account in credit decisions and offering customers sustainable products. In short, in the (near) future your non-financial information and ESG performance will play an essential role whether a bank will invest in your company or provide a loan. So, it’s time to act now! However, most small businesses don’t have the capacity or money to focus on sustainability or a sustainable strategy to reduce emissions. Consequently, the lack of access to finance will play a key preventing factor in their future operations. One can make the assumption the path to a sustainable future is much easier for a large corporate than for smaller SMEs. As access to capital markets is generally not at the disposal of the smaller companies that make about 90% of the businesses globally, providing half of all employment.  As capital is a key enabler of a sustainable supply chain, the supply chain participants – large corporates, banks and governments – need to collaborate. They can co-invest, provide liquidity, share knowledge on how to strategize sustainability, and pass on innovation and technologies across the supply chain. To create or modify incentives to persuade supply chain partners to behave in ways that are best for everybody. To make sure supply chains work well and its participants interests are aligned.  Techniques as receivable finance and Supply Chain Finance, in general, can play an important role in achieving what’s best for your company, your business model, your supply chain, and to what extent you’re ‘sustainable’.  Want to learn more about how that works? Call now to learn why our service is right for you, and let’s work together! Alternatively, maximize your toolkit with actionable insights on how regulatory changes, business strategies and innovative financing structures are evolving around the ESG issues. A lot of information can be found at BCR’s Receivables Finance ESG and Sustainability webinar; see the full program here: https://bcrpub.com/events/receivables-finance-esg-and-sustainability-webinar.

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Why is ecosystem thinking important for your present and future business models?

Business models, Ecosystems /

Today, at the end of the digital revolution, IBM is at a similar juncture as it was four decades ago (when almost missing out on the minicomputer personal computer revolution). However, the approach IBM currently takes is 180 degrees different. Instead of secretly developing a new product, it is building a collaborative network to develop quantum computing. IBM indicates that the technology is simply too complex for a single firm to develop alone.  And so, it goes for many challenges we face today, whether it is the energy transition, digitalization, or a growing necessity to address climate change, a single firm has a hard time, if not a mission impossible, to solve the complex and required transitions we are about to face. That’s where ecosystem thinking comes into play. Ecosystem thinking is the belief that value creation is a collaborative result that involves multiple stakeholders within an ecosystem. A business ecosystem consists of multiple stakeholders – centered around the value proposition for your client or your client’s client – where the value created together is more than the value created alone. Compared to traditional thinking, ecosystem thinking is a shift from “me” to “we”; from internal value chain focus to external ecosystem value growth from focus mainly on operational efficiencies and ‘economies of scale’ to creating user snowball effects (so-called ‘network effects’) from development alone to teaming up with partners and co-creating from competitors to complementors from suppliers to partners Each client proposition (product/market combination) has its own business ecosystem and that leads to the fact that the centre of gravity of a business ecosystem plays an important role in addressing your customer needs and creating a stronger competitive advantage. To determine the strategic direction of your company, it is very important to consider what the role of your organization in this business ecosystem could be. Are you a leader or a follower, an innovator or an imitator, an orchestrator, or a participant? Sound easy? Well, the challenge is to find the sweet spot in your ecosystems. Trying to lead or to orchestrate doesn’t always make sense… Your added value needs to be unmissable. You need to find your spot where nobody is going to be better than you, where you can’t be made redundant, and your business still adds value, and the ecosystem creates value. 

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