C2P framework overview

Cruising to Profits ®BUSINESS TRANSFORMATION PROCESS OVERVIEW

R ICARDO V. P ILON

CEO, MILLENNIUM AVIATION , INC .

MILLENNIUM AVIATION, INC. © 2014 / CRUISING TO PROFITS®

Successful Business ModelDefinition: The value proposition that delivers the most value and

generates the highest return (revenue streams)

to the clients that value it most (customer segments)

by best capitalizing on/using the chosen activities and assets (key activities and key resources)

offered and delivered through the most effective mechanisms (channels)

and the most appropriate partnerships (key partners)

and thus develop deep and lasting relationships (customer relationships)

on the most efficient basis (cost structure).

2MILLENNIUM AVIATION, INC. © 2014 / CRUISING TO PROFITS®

Business Transformation

3

Is about addressing the “DNA” or core character of the airline

Is fundamentally overarching strategic planning Strategic planning is concerned with activities that attain the goals of the current business model

Business Transformation addresses a move toward future business models

Business Transformation Methodologies and techniques enable the creative development of new profits models in new business models, executed by the same team

Cruising to Profits® provides a framework, checklist and toolbox, but key elements are: It bridges business strategy and implementation (where most consultants are absent)

A focus on disciplined execution and a systematic process(95% of strategies or transformations depend on how it was implemented)

It cross-checks profit model components with traditional departments

It incorporates people and people-related aspects (simple, practical exercises translate to ownership)


What is the Methodology?• Cruising to Profits® Business Transformation service is:

• The connection between strategy and execution

• A practical map that guides managers to strengthen, revive, or transform their business model

• A process that allows airlines to obtain deep insights into the workings of the 9 building blocks of their business models

• A toolbox of pragmatic exercises that are simple, intuitive to adopt and put to practice

• The process is comprised of 6 phases and a total of 10 steps, each of which has practical exercises

• The method includes:• Self assessments and scorecards (qualitative) to clarify company identity and purpose from a more holistic point of view

• Quantitative metrics (how well the company is doing in profiting from its business model)

• Tools to analyze 9 business model building blocks and identify profit and revenue leakage (and inconsistencies)

• Techniques to identify and design new business models

• A checklist against proven business models and business model patterns

• The detailed content and process is customized to the unique DNA of the respective airline in order to incorporate the organizational, cultural, and human elements in transformation planning and change management.


Examples of Business Model Transformation Clients Cases

1. Domestic charter airline wants to convert to a scheduled low-cost carrier

2. Airline wants to move from transaction-based ticket pricing and implement subscription-based pricing (passes or membership)

3. An international airline wants to remove its business class offering and introduce a premium economy service

4. An Asian scheduled airline wants to convert to an ultra low-cost carrier

5. A merger

6. A partial stake and business alignment

7. An IT division of a cargo company wants to spin off its technology as a stand-alone company

8. Bankrupt airline needs a go-around and restart


Key Building Blocks

1/29/2014 6

Redefine perspective

Resize

Rebuild Business Transformation

Open Innovation(Customer Drives It)

The Process

The Roadmap Forward + Implementation Method +

The Toolbox


Execution

7

Cruising to Profits ® Business Transformation Process

Phase 1: Insights

Ground 0:Perspective

Phase 5: Execution

Phase 2: Visualize

Phase 3: Build


Driver of change

Phase 4: Test

Diagnosis & Redesign

Step 1:Define Identity

and DNA

Step 2:Commercial

Health Check

Step 3:Business Model Building Blocks

Step 4:Business Models Patterns

Step 5:Model Design

Step 6:Strategy Test

Step 7:Storytelling

Step 8:Delivery

Step 9:Leading Change

Step 10:Diagnosis

Next Transformation

Strategic Purpose

Industry Purpose

Company Role

Potential Role

Guiding Principles

Strategy Discipline Customer Intimacy Discipline

Consumer Trends

Industry

Trends

Competitive Context

Regulations

Guiding Principles

Perspective concentrates on: Characteristics of the fundamental drivers of demand

Objective Re-state the strategic purpose of the industry

“What we are” versus “what we do”.

Describe how the industry is fulfilling its purpose

Re-identify the key role of your airline in the industry (local community, nation, region, world).

Results Refreshed sense of focus and set of guiding principles.

8

Strategic Purpose

Industry Purpose

Company Role

Potential Role


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Tool:Cruising to Profits ® - The Magnifying GlassTM

Contents:Scorecard based assessments.


9


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Step 1:Define identity

and DNA

Step 2:Commercial health check

Step 3:Business model building blocks

Analyze each BM component

Review departments /

functions against BM

components

Obtain all relevant data by activity / department

Cross-Analysis:ProfitabilityProductivityEffectiveness

Decompose business model

(BM)


Cruising to Profit® - The ThermometerTM

Predictive Analytics


VP

RS

KA KR

CS CR

KP KC

CS


Phase 1 allows you to:

Gain deep insights into how your identity and business model translates into: Profitability, Productivity, Effectiveness

Identify profit and revenue leakage, customer attrition

Perform a deep segmentation of your customer base Why do your customers travel?

What are they interested in, or what do they do “out-path?”

Conduct hybrid segmentation, e.g.: What combinations of experiences can enhance the

customer’s experience overall?

10


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test



Cruising to Profit® - The ThermometerTM



VP

RS

KA KR

CS CR

KP KC

CS


In Phase 2 you will be able to:

Generate new ideas that will create incremental revenue streams

Envision different ways of what the company can be and offer

Formulate and picture different business models around The unique characteristics of your building blocks that fulfil a strategic purpose

How the building blocks are arranged to solve the customer’s problems

How to create an irresistible value proposition for those customers

11


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test



12


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Tool:Cruising to Profits ® - The ThermostatTM



VP

RS

KA KR

CS CR

KP KC

CS

Evaluate alternative

patterns

Apply current commercial

data

Align business model

components

Step 4:Business Models Patterns

Identify current pattern

Align business functions

Select 1-3 scenarios

Sale

s &

Mar

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Dis

trib

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on

Techn

olo

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rod

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Pri

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g &

RM

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lty

OP

STalen

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Guiding Principles: Each Building Block has Departmental Touchpoints

Identify Inconsistencies and Remove Destructive Patterns


13


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Tool:Cruising to Profits ® - The ThermostatTM



VP

RS

KA KR

CS CR

KP KC

CS

Known needs of non-

customers

Identify unknowns

Step 5:Business

model design

Unmet needs of customers

Sale

s &

Mar

keti

ng

Dis

trib

uti

on

Techn

olo

gyP

rod

uct

Pri

cin

g &

RM

Loya

lty

OP

STalen

t

Guiding Principles: Each Building Block has Departmental Touchpoints

Identify Inconsistencies and Remove Destructive Patterns

Brainwave technique

Think post(visual

thinking)

Activity stories

Customer empathy map Test drive Scenarios

Deep customer insights

Periphery markets


14


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Business model trend

analysis

Strategic planning

tools

Apply Blue Ocean

method

Step 6:Strategy Test

Competitive environment

Multi-Divisioncheck up

Global application validation

Step 7:Storytelling

Customer’s problem

view

Deliveryview

Employeeview

Investorview


15


Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


Step 8:Delivery

Step 9:Leading Change

Appoint Departmental

Change Agents

Create Multi-Disciplinary

Change Design Teams

Develop Business

Plans

Appoint Chief

Integration Leader

Design New Organization

Build Change & Delivery

Process

Simulate and Produce

Quick Wins

Step 10:Diagnosis



Driver of change

Phase 1: Insights


Phase 5: Execution

Phase 2: Visualize

Phase 3: Build

Phase 4: Test


The business model will evolve: Competitive environment forces it to

Lessons learned need to be incorporated

Adapt and modify in response to market reaction

Set up the management structure to continuously monitor and assess progress

Assess scorecards

Assess performance

against scenarios

Assess governance

performance

Modify building blocks

Rerun and implement


NotesThis was the first level of granularity.

There are 5 levels.

Beyond that, there are 2 more levels of granularity that are tailor-made together with the customer to reflect their DNA. The unique identity, skills and personalities are at play at that level of detail and cannot be driven by us. It should not. We are a resource.


Date post:	21-Jan-2015
Category:	Leadership & Management
Upload:	millennium-aviation-inc
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C2P framework overview

Leadership & Management