In our previous module, we have described the three pillars framework, which is a simple and yet comprehensive way to describe a firm's business model. We have shown how it can be very useful, both to capture the current business and corporate strategy of a firm and to think about its future. We have also highlighted how many firms have been able to reinvent their business model when their current one was becoming mature, using, for example, the case of movie theaters in France with the introduction of multiplexes at the beginning of the 1990s. New and different business models have also successfully been developed by firms entering established industries such as Southwest Airlines, for example, in the US or its European copy, Ryanair, in the airline industry. In fact, we have looked at dozens of cases of business model reinventions, both by existing firms or new entrants. Some are very recent and some are less recent, but as relevant since business model reinvention is not a new phenomenon but a very permanent one. Reinventing your business model means reinventing its value proposition and its value architecture and as a consequence, generating a new profit equation. From this large base of case studies of which we have fully documented 85 in our app-book that spreads over time, industries and geographies, we have drawn an approach to reinvent your business model. We call it the Odyssey 3.14 approach and I will explain shortly why we named it like this. The question we asked ourselves was: what have these companies done to find radically new value propositions and value architectures? What common patterns can we identify? And based on our observations, we are proposing fourteen directions in which to explore to find new ideas for a new value proposition or for a new value architecture. Seven of them refer to the value proposition and seven of them refer to the value architecture. Thus, the name of our approach. Odyssey is for the exploration, the travel, 3 is for the three pillars of the business model and 14 is for the 14 directions to explore. In fact, a direction means a topic to be discussed. The best way to materialize it is in a series of questions to ask yourselves. For example, exploring the direction and title "Reduce clients' hassles" means asking yourselves two questions. What are the complications our clients experience when using our products or services? And how could we reduce these complications? In fact, these directions are a way to structure a discussion, or a brainstorming session, or an ideation session one would say these days, within the company. These directions are not exclusive of one another and discussing those related to the value proposition or those related to the value architecture is equally interesting and productive in terms of new ideas as both pillars are really closely related. Therefore, if one wants to be exhaustive in one's search for a new business model, all fourteen of them should be explored even though some of them might lead to fewer ideas than others. However, before we move into presenting those fourteen directions there are two very important points I would like to stress for you. We could call them prerequisites to business model reinvention. We can find them in every single business model innovation story. They are permanent features. We call them: have a customer insight and break an industry belief. Let me explain what we are talking about. Having a customer insight comes from seeing small behavioral details in customers - entering their intimacy. For example, one of the most successful bikes in the world, the B'Twin, was conceived by Decathlon, a French sports retailer that carries its own brands. After hundreds of hours of observation on their shop floor, they would observe how male and female buyers behave in the bicycle section, how they circulate, what they do with the exposed bike, how they try them and from these observations, they designed a bike for both men and women. As for the industry beliefs, sometimes called industry myth, they are everywhere. In all business sectors, you will find that all players, all competitors follow certain common ways of doing things. Usually, these common behaviors come from the past. They are former key success factors of the industry, and they have survived over time without ever being challenged. They have become myths, beliefs, constraints. Let's look at a few examples. In the airline industry, for many years, all airlines have offered meals during their flights. In the hotel industry, it was understood for ages that a hotel should have a reception, whatever its category. In the banking industry, banks would only lend money against a guarantee of some sort, an asset or secure source of revenues. However, all of these myths, these industry beliefs have been challenged, pulled down by companies that have launched very successful business models: in the airline industry by low-cost airlines, such as Southwest or Ryanair; in the hotel industry, by Formula 1 hotels; in the banking industry by Grameen bank and all the other microfinance institutions. We will have the opportunity to discuss these examples later. So having these prerequisites in mind in our next module, module three, we will detail each of the seven directions related to the value proposition, illustrated by many company examples, and in module four, we will detail in a similar way the seven directions related to the value architecture.
