welcome today we learnt going to learn how to enhance your business model for that we're going to use the Apple iPod as an illustrative example when we think about Apple and most often as a firm which has dominated the high tech industry in the last decade however when we look a bit further back into the 90s then we encounter quite a different company one whose competitive advantage has been roading which was struggling for survival which in 1996 was close to being taken over by Sun Microsystems however one innovation was able to set Apple on the
course to a stellar success of the last decade and that was the Apple iPod now the iPod is portrayed by the media often as the example of Steve Jobs unfort bill instinct as an innovator and a closer look however Apple has previously failed two times to develop a successful music device and was close to abandoning the project altogether if you now wonder how the success finally has been created then I invite you to join me for the analysis of the failed and the successful business model for that analysis we're going to use the host of
all da business model canvas with its nine building blocks when looking at the mapping of the failed business model take particular notice of the weak value proposition in the middle and the absence of the solution for binding a strong customer relationship the business model reflects clearly apple's intention to focus on its role as a hardware designer and a hardware vendor this paradigm however was challenged and altered when Apple invited an external developer this developer was Tony Fadell who came up with the idea of using software installed on the computer to operate the more sophisticated functions
and thus being able to maximize the ease of use of the device while the ease-of-use of device was attractive we will see that more important enhancement were made on the level of the business model now if you want to put your analytic skills to a test I invite you to stop the video now rewind until you see the faith business model again and try to identify the elements that edit to the iPod success let us now move on take a look at the additions that turned the faith business model into the huge success which we
all know today first we can see the impact of the iTunes software which allowed in particular adding the ease of use to the value proposition but think also about the value proposition of being able to carry all your music with you on one device thus being able to enjoy the unique lifestyle of having all your music on the go and displaying your individualism to your friends and family and don't forget the white earplugs show it to everyone what kind of device you're using and create the sense of belonging to this exclusive community of music lovers
let us also not forget the digital rights management that made Apple the dearest friend of the music industry which at that time was facing crumbling revenues resulting from the illegal music sharing over the Internet last but not least Apple insured for its proprietary file format that once you started using iTunes to manage your music it was very difficult to switch back to another system creating a powerful lock-in effect we're looking at the final business model one can only marvel at how well it is working to ensure Apple's leading position in the industry and that already
over a whole decade with this little example we wanted to show that it's crucial that you systematically reflect on your business model that you're able to articulate your business model and using systematic approaches like the austere Valda business model canvas you can identify gaps and innovate your business model to create a lasting competitive advantage and remember no competitive advantage lasts forever even during successful times you're well advised to look at the weaknesses and dissipate frets and then identify elements that will strengthen your business model and lay the foundation for your future success
