· Generate two different business architectures for one use case previously generated (in Section 2), thinking through each element, as outlined in the lectures. You should aim to:
1. Summarize each of your business propositions in two sentences; this is a “headline” that you would use to describe your firm quickly to investors or customers
2. Capture your business/operating models using the framework provided below
· Value Creation: How does your firm create value for your customers (i.e., what benefits would you provide or what problem would you solve)? Please try and quantify where possible.
· Value Capture: How would you earn revenue from the value you create?
· Structure: How is your business and your value offering structured?
· Assets: What facilities, equipment, human capital and other assets would you need to enable your business?
· Capabilities: What unique strengths and abilities would you need to enable your business? How are these difficult to replicate?
Selected Technology: Structural Health Monitoring by measuring difference in thermal conductivity across surfaces.
This technology essentially allows “real time”, rapid and non-invasive monitoring of changes in thermal conductivity from a baseline value across an interface between two mechanical components leveraging a standard SHM technique. The patent describes its applications in satellites, where the structural integrity of bolted joints, which are subjected to thermal cycling, is highly important. Stock parts, if damaged before assembly and launch during shipping or storage, need to be evaluated for integrity and performance as per design and any shortcomings detected therein. The described technique can greatly reduce the cost associated with such evaluation and testing, which currently, is done by repeated thermal cycling in a vacuum environment. The latter procedure can cost several thousands of dollars and takes several weeks to months.
Business Architecture 1 – Monitoring and Testing Products Provider
Value Creation: In this version of our business, our primary model of creating value is to co-design with customers solutions for thermal property testing and monitoring needs based on our technology. For each industry (beginning with testing satellite component joints) we would save our customers (a) time (and in the satellite industry, this translates to several weeks and man-hours) and (b) money (in the order of thousands of dollars). Can you quantify what these savings might be for other industries?
Value Capture: One way to capture value is by margin – we would charge customers for the design services and the final products that we use in developing relevant testing methods for their industry. Can you think of why this model is suitable for our value offering?
Structure: In this model, we are primarily a services and equipment provider. What we deliver to our customers is the design expertise to develop a relevant testing methodology for their needs based on our products and then the required equipment to carry out such tests.
Capabilities: The key capabilities required for our business is in engineering and expertise in thermal testing. As such, the engineering knowledge and expertise that our team possesses is the key capability. Another key capability of our firm is based on our technology itself – we are able to deliver low cost, and quick testing procedures for our customers, which others without access to our technology may not be able to replicate. Note that we would need to acquire additional capabilities in sales and other areas which would strengthen our business – our customers are specialized organizations, and we need to reach them through specific channels. Having the ability to sell to such customers would be critical.
We would also need to acquire, potentially by developing the right relationships, the capability to manufacture the equipment we would deliver to our customers. This capability is external in the sense that we would want to keep the company lean by not investing in manufacturing facilities, but rather working with contract manufacturers with whom we can work.
Assets: The key assets in our business are (a) the engineering expertise and capabilities of our design team and (b) the unique intellectual property of our technology which is not replicable directly. Note that we would potentially need to acquire other assets such as additional IP by developing our technology further and more human capital on the sales side.
Business Architecture 2 – Technology Licensing
Value Creation: In this model of our business, we would create value by allowing our customers, manufacturers and providers of thermal testing equipment and services, to deliver more value to their customers. We would do so by allowing them user of our novel technology to create better products and services. Can you think how you would quantify this value?
Value Capture: Our means of capturing the value we generate is by an appropriate licensing fees. Can you think of how you would arrive at the right fees? It is helpful to think of it in terms of the additional value that our customers (service and equipment providers) could capture by using our technology to serve their customers over the ‘lifetime’ of the test.
Structure: As mentioned, we would be structured as an IP holding company. Taking advantage of our team’s expertise in engineering and research, we should aim to further develop our IP portfolio to develop newer technologies or additional applications of the technology that we could protect.
Capabilities: Our primarily capabilities are our team’s ability to develop relevant and ‘state-of-the-art’ technology for thermal testing and monitoring that would be difficult to be replicated. An additional capability that we would require is the ability to protect our findings – therefore, our ability to patent any technologies developed is also critical. Finally, we would also need to acquire the right sales capabilities – as our customers are again specialized firms operating in particular industry segments, it would be important to find and effectively utilize the right channels to reach them and build a compelling case for the use of our technology.
Assets: Our primary assets would be our intellectual property portfolio, our human capital with its relevant expertise and finally, any laboratory facilities we would need to further develop additional technologies and IP.
Question 1 – Business Architecture 1
Enter your first business architecture idea.
Question 2 – Business Architecture 2Enter your second business architecture idea