Innovation management

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Innovation management

• Innovating value capture
• Jaka Lindic, Ph.D.
• Faculty of Economics
• University of Ljubljana

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Agenda
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Before we move on innovation ecology

• CityCargo
• combining tram existing infrastructure with
  e-cars
• trucks go as far as the edge of the city to
  deliver their goods
• the goods are then transported to the city using
  cargo trams to inner city hubs
• quicker, because tram lines are mostly
  independent of the road network
• size of the trams makes it possible to combine
  different kinds of loads
• where they are transferred to electrical cars
  (E-cars) and
• then delivered to their final destination (the
  last mile).

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Innovation ecology CityCargo Benefits

• Less air pollution in the inner city (reduction
  of carbon emissions)
• reduce number of trucks in the inner city by half
  within four years (2500 less)
• reduced emission up to 16 in particulate matter,
  carbon dioxide and nitrogen oxides
• plans to commission a windmill to supply the
  energy for cargo trams and E-cars (carbon
  neutral)
• Efficient loading means less energy use (1 for
  four 7.5 ton trucks)
• Less noise pollution
• Reduction in noise levels in the city
• Reductions in the amount of traffic on the roads
• Increase of road safety (less transport traffic)
• Reduction in the cost of road maintenance
• Significant advantages to the distribution chain
• bundling, waiting times for deliveries not
  necessary, reduced needs for easily maneuvered
  trucks, reduced fines
• Annual savings of 125 million
• more efficient planning, because planning is not
  tied to limited delivery times
• reduce costs for entrepreneurs within the city
• supplied with a tracking device, which will
  reduce the vulnerability of goods to theft.
• 1,200 new jobs

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Innovation ecology Sustainable Dance Club

• http//www.youtube.com/watch?vrzb3VFi3Sew
• Human powered floor
• incorporates sustainable design and applied
  techniqueswith social responsibilities
• The electricity generating dance floor will
  generate electricity from the movements of
  dancing people.
• The electricity will be used for the LED lighting
  in the club.

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Innovating Business Model
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Value Capture Revenue ModelRevenue streams

• Revenue streams
• selling
• mediating (per transaction, commission)
• licensing
• lending
• advertising
• one time or recurrent (e.g. subscription)

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Value Capture Revenue ModelPayment mechanisms

• Payment mechanisms
• fixed prices
• time, quantity usage
• subscription
• menu prices
• differentiated prices
• based on characteristics, preferences, usage
• dynamic pricing
• yield management
• auctions
• reverse auctions
• Dutch auctions
• barter

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Yield Management

• Marmorstein, Rossomme, Sarel Unleashing the
  Power of Yield Management in the Internet Era
  Opportunities and Challenges, 2003

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Value Capture How is Amazon making money?!

• Selling products
• Selling services (e.g.. Cell Phone Services)
• Retail partners (Borders, CDNow)
• Application service provider (Target, Sears,
  Marks Spencer...)
• Amazon Services Business Solutions
• webstore
• fulfillment
• selling on Amazon (used to be known as zShops)
• Affiliate (financial, photo, travel services)
• Auctions
• Advertising
• Amazon Web Services

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Ryanair Ancillary Revenues

• Hertz Car Rental
• Hotels, Hostels, Ryanair Hotels/Inns
• Travel, Home, Life Insurance
• Ground Transport
• Car Parking
• Advertising Aircraft Painting, Overhead Lockers,
  Tray Backs
• Gambling
• InflightPhone
• Conversion
• Ryanair Bing (?)
• Dynamic Packaging
• Credit Card

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Task 3 Build/Explain Value Capture

• Search for innovative Value Capture techniques
  that would enable you to differentiate yourself
  from the competitors.