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TitleEvolving Business Models: How CEOs Transform Traditional Companies
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LanguageEnglish
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Total Pages226
Table of Contents
                            Contents
About the Authors
Introduction: Globalization and the Opening of New Markets
Transformation of Teaching and Research in a Globalized IT-Driven World
	1 Chapter 1: Teaching and Research (The Traditional Paradigm as a Starting Point)
	2 Chapter 2: Changes in the Environment (Drivers of a Transformation)
	3 Chapter 3: New Models of Teaching and Research (Networks Between State and Market)
	4 Chapter 4: Outlook, A Regionally Rooted Faculty-Driven University with Global Reach (The Example of the HSG)
	5 Conclusion
	References
Banks Caught Between Regulation, Technical Progress, and Profitability
	1 Confidence and the Banking Business
	2 Regulation of the Financial Sector
	3 Risk Management
		3.1 Requirements Under Corporate Law
		3.2 Risk Strategy in Financial Institutions
		3.3 Risk Culture
		3.4 Remuneration Policy
	4 Capital and Liquidity
	5 European Banking Union
	6 Regulation and Profitability
	7 Digitization
	8 Commerzbank
Business Models in the Chemical Industry Amid a Changing Competitive Landscape
	1 Introduction
	2 A Brief Overview of the Chemical Industry
	3 Trends in the Chemical Industry
		3.1 Changing Landscape: Rise of Emerging Markets
		3.2 Regional Diversification: A Special Challenge for Europe
		3.3 Importance of Innovation
		3.4 Sustainability: An Integral Part of Today´s Business Models
	4 Business Models in the Chemical Industry
		4.1 Competitive Environment
		4.2 Business Models in Comparison
			4.2.1 Basic Chemicals
			4.2.2 Application-Oriented Solutions
			4.2.3 Product Innovation-Driven Specialties
			4.2.4 New Business Model on the Horizon: Circular Economy
	5 Business Model Success Factors and the Next Challenge
		5.1 Portfolio Management as a Precondition
		5.2 Success Factors for a Multi-business Model Company
		5.3 The Next Challenge: The Impact of Industry 4.0
	6 Conclusion
	References
Business Model Innovation: Some Key Success Factors at Bosch
	1 Business Model Innovation at Bosch
		1.1 State-of-the-Art Knowledge and Best Practices for Business Model Innovation
		1.2 Change Perspective to Open Up for New Business Models
		1.3 Core Competencies as Source for Business Model Innovation
	2 Case Studies for Business Model Innovation at Bosch
		2.1 Case Study 1: Parking Reinvented
		2.2 Case Study 2: Corporate and Start-Up as Perfect Complement
		2.3 Case Study 3: Bosch Internal Start-Up Success Story
	3 Leadership: Key Success Factor for Business Model Innovation
		3.1 Make Room for Creativity
		3.2 Dare to Explore New Territories
		3.3 Find a Strong Mentor in the Organization
	4 Conclusion
	References
Environmental Management
	1 Environmental Management
		1.1 Management Rules and Stakeholders
		1.2 Management Rules and Areas of Action
	2 Sustainability Management
		2.1 The ``Energy Revolution´´
		2.2 The ``Mobility Revolution´´
	3 Sustainability Management, Risk Management, and Opportunity Management
	References
		Further Reading
Innovation for Health: Success Factors for the Research-Based Pharmaceutical Industry
	1 The Drivers of the Industry
		1.1 The Market and Environment
		1.2 The Companies
		1.3 The Portfolio of Business Segments
			1.3.1 Patented Prescription Medicines
			1.3.2 Generics and Biosimilars
			1.3.3 OTC Drugs
	2 The Fundamental Business Model of Pharma Innovation
		2.1 Patent Protection as Backbone
		2.2 Change in Cost Structure Post Patent Expiry
		2.3 The Challenges for Research-Driven Companies
			2.3.1 RandD Productivity
			2.3.2 Making Innovation Accessible
	3 The Evolving Business Model and Its Success Factors
		3.1 Pharma Business Model in Transformation
		3.2 Success Factors for the Future
	4 Conclusion
	Bibliography
Industry Expertise and Dynamic Challenges: Perspectives of an Adopted Railwayman
	1 Introduction
	2 Definitions of Terms
	3 Derivation of Core Hypotheses
	4 A Case Study: Rail Transport in Germany
	5 Conclusion and Recommendations
	References
The Airline Industry: Flying on Its Own Is not Enough
	1 Introduction
	2 The Task of a Manager
	3 History of Aviation Industry and Management Skills
	4 Today´s Dynamics
	5 Business Models and Skillsets
	6 Conclusions
	References
From Data to Business: A Paradigm Shift in Industry
	1 Digitalization Is Radically Driving the Innovation of New Business Models
	2 Digitalization Is Spreading into Industry
	3 Technological Leadership Isn´t Enough: Customer Benefit Is Key
	4 What Makes a Business Model Innovative and Viable?
	5 Industry Business: Condition Monitoring for Machine Tools
	6 Energy Business: Flexible Maintenance Contracts and Tailored Solutions for Customers
	7 Mobility Business: Top Reliability and Availability
	8 Medical Engineering: Cloud-Based Platform for Radiologists
	9 Digital Market Success Increasingly Depends on Networking Business Models in Ecosystems
	10 Ownership Culture as a Success Factor in the Digital Age
	Bibliography
Engineering the Intangible: Strategic Success Factors in the Luxury Watch Industry
	1 Introduction
	2 What Is Luxury?
	3 Between Making and Art
	4 Luxury Products and the Nature of Luxury Spending
	5 More than the Sum of Its Products: The Luxury Brand
	6 Why Mechanical Watches?
	7 Eternity and Immortality
		7.1 A Functional Instrument
		7.2 It´s Got an Engine
		7.3 Complex, Compact, and Portable
		7.4 It´s Uniquely Recognizable
		7.5 Simply Irreplaceable
	8 The Luxury Watch Brand´s Market Environment
	9 The Luxury Watch Brand Mission
		9.1 Authenticity
		9.2 Desirability
		9.3 Client Experience
	10 Success Factors in the Luxury Watch Industry
	11 Creation
		11.1 Emotional
		11.2 Rational
	12 Making
		12.1 Emotional
		12.2 Rational
	13 Selling
		13.1 Emotional
		13.2 Rational
	14 Marketing
		14.1 Emotional
		14.2 Rational
	15 Digital Transformation
	16 Conclusion
	References
Industry Expertise in the Digital Media Industry: Specialization vs. Disruption of Online Business Models
	1 Introduction
	2 The Growing Importance of Industry Expertise in Digital Media
		2.1 Differentiation and Specialization due to Technology
		2.2 User- and Product-Centric Business Models
		2.3 Data-Driven Decision-Making
		2.4 Short Product Launch Times and Life Cycles
		2.5 Informal Networks
		2.6 Sector-Specific Regulation
	3 Offsetting Factors
		3.1 Continued High Intensity of Change and Possible Disruption
		3.2 Divergent Organizational Cultures Within One Industry
	4 Summary and Outlook
	References
Royal Dutch Shell in a Changing World: Navigating Uncertainty
	1 Understanding Shell
	2 Strengths
	3 Evolving Business Model
	4 Simpler Company
	5 Evolving Business Environment
	6 Lower Emissions
	7 Political and Economic Uncertainty
	8 Digital Technology
	9 Strategic Choices
	10 Making the Most of Shell´s Strengths
	11 Key Capabilities
	12 Conclusion
	Case studies: LNG and Retail
		LNG: Making Innovation Count
	Retail: A Local Approach in a Global Network
	Further Reading
Into the Future on the Digital Highway
	1 Product Creation 4.0: The Intelligent Factory
	2 Customer Service 4.0: The Digital Approach to the Car
	3 Freedom 4.0: The Connected Car
                        
Document Text Contents
Page 1




Management for Professionals
Evolving
Business
Models
Christoph Franz
Thomas Bieger
Andreas Herrmann
Editors
How CEOs Transform
Traditional Companies



Page 2




ManagementforProfessionals



Page 113




becomemoreinnovative,collaborative,diversiÞed,andvalue-driven.Today,most
pharmaplayersareinthemidstofatransformationtothenextlevel,namely,
towardunderstandingandusingITtechnologywithrespecttohealthcareand
movingtoanevidence-based,outcome-focusedenvironment(Ernst&Young
2012
)(Fig.
9
).
Unliketheprevailingcurrentmodel,whichisinessenceproduct-centric,the
emergingmodelwillneedtobemorepatient-centric(PricewaterhouseCoopers
2007
).Thisdevelopmentisleadingtomoretargetedtherapies(personalized
healthcare)andexpandingtheindustryÕsfocusbeyondtreatmenttoincludepre-
ventionanddiagnosis.
13
Andbydoingmoreforpatients,thismodelwillalsohave
implicationsontheentirehealthsystem,deliveringrealvaluetohealthcareÕsother
stakeholdersÑregulators,providers,andpayers.Whileprescriptionsusedtobethe
soleprerogativeofthedoctor,theyarenowincreasinglyinßuencedbypayers.
Thismodelandthemovetoaworldtowardindividualizedtreatmentswill
accrueÞnancialreturnstothosewhocanbestdemonstratethattheysigniÞcantly
improvehealthoutcomes.Thisdevelopmentisalsocreatingtremendous
opportunitiesforcompaniesnewtothehealthcarebusiness.Asaconsequence,
nontraditionalentrantsÑinformationtechnologycompanies(seeSuccessFactor4,
page108),retailers,nutritioncompanies,telecommunicationcompanies,etc.Ñare
movingintothehealthcarearena.
Fig.9
PharmabusinessmodelintransitionbasedonErnst&Young,Progressions,
2012
13
Accuratediagnostictestsreducecostsbyidentifyingpatientswithaveryhighlikelihoodof
respondingtoadrug,diminishingsubsequenthealthproblems,reducinghospitalization,or
avoidingunnecessarytreatment.
104
C.Franz



Page 114




3.2SuccessFactorsfortheFuture
Theemergingbusinessmodelsareshapedbysixkeysuccessfactors:
SuccessFactor1:ExcellenceinScience
Theprogressinscienceandtechnologydrivenbythegenomicrevolution
14
will
enabletheindustrytodiscovernewmedicinestotreatmanyoftodayÕsincurable
diseases(Fig.
10
).
Overthepastfewdecades,biotechnology(amongothertechnologies)has
enabledmedicalprogresswhichusedtobebarelyimaginable.
Themedicinesavailabletodayallinvolvethesame120orsotargetmolecules.
Inrelationtothemorethantwomillionproteinsinthehumanbody,thatisavery
smallnumber.Thedecodingofthehumangenome,thegrowingunderstandingof
genesandtheirfunction,theproteinstheyencode,andthebiologicalpathways
theseproteinsareinvolvedinÑallthis,amongmanyotherdiscoveries,providesthe
pharmaceuticalindustrywithadramaticincreaseinplausiblebiologicaltargetsfor
noveltherapeutics(LoweandReddy
2015
).Scientistsareonlynowlearningto
understanddiseasemechanismsandwhatitisexactlythatismalfunctioninginside
thebody,withaviewtodevelopinghighlyspeciÞcmoleculestocountertheroot
causeofdisease.
Yetscienceisnotonlychangingthewaymedicinesarediscoveredbutalsohow
theyaredeveloped.Today,clinicaltrialsaccountfor36%ofR&Dexpenditurein
theindustryandthusconstitutethebiggestsinglecostindrugR&D(Strategic
Insights
2013
).Withincreasinglywell-deÞned,preselectedpatientpopulations,the
futurewillholdanincreasingnumberofsmallerandmorecost-efÞcienttrials.
Fig.10
TurningscientiÞcknowledgeintonoveltherapies.Source:Rocheinternalanalysis
14
Thefastanddramaticincreaseinunderstandingthehumangenomeanditsinßuenceonthe
biologicalpathwaysinthehumanbody.
InnovationforHealth:SuccessFactorsfortheResearch-BasedPharmaceutical
...
105



Page 225




andrelaxinunpleasantdrivingsituations.Thecarwillbecomeaprivateplace
ofretreatinaworldoftightspacesandhecticactivity.Thosewhowishtowilluse
thejourneytoworktotakeanotherlookatthedocumentationforthe˚rst
meetingŠandtakeanaponthejourneyhome.Andhowwoulditfeelifthecar
droppeditsdriveroffoutsidearestaurant,droveofftoparkitselfautonomously,
andlatercollecteditsdriveragain?
Autonomousvehiclescanalsomakelifesaferforus.Mostroadaccidentsare
duetohumanerror.Sensors,ontheotherhand,areimmunetodistraction,fatigue,
andshockreactiontimeŠtheyalwaysrespondreliablyandpredictably.Traf˚c
˜owscouldalsoimprovethankstotheparticularlysafeandappropriatedriving
style.Sowillthefunfactorbeleftoutoftheequationinthefuture?Wethinknot.
Whereverdrivingremainsenjoyable,wealsowishtogivecarloversthefreedomto
takeoverthecontrolsthemselvesinthefuture.
Butprofessionaldriversalsoknowthis:Tiring,monotonousdrivingsituations
areoftenthenorm.Thatisonereasonwhyautonomousdrivingisofveryspecial
importanceinthecommercialvehiclesector.Accordingtoforecasts,roadgoods
traf˚cintheEUissettofurtherexpanditsshareoftotalgoodstransportationover
thecomingdecades.Ontheotherhand,thenumberofnewtruckdrivinglicenses
hasforyearsbeenstagnatingatalowlevelinGermany.Inotherwords,adriver
shortageisbecomingarealproblem.Autonomoustrucksmaybeawayout:The
vehicleswillbecomeintelligentparticipantsinaprocess,andthedriverswill
becometransportmanagers.Theywillbeabletoapportiontheirtimebetter,take
careofadministrativetaskswhileontheroad,moreeasilykeepintouchwith
familyandfriends,andbeathomemoreoftenfollowingapossiblereviewofthe
regulationscoveringdriverworkingandrestingtimes.Daimleristhe˚rstmanu-
facturertohaveshownthewayinthisdirection,withthefiFutureTruck2025fl
researchvehicle(Fig.
7
).
LettheFutureBegin
Allinall,onethingisclear:Morethaneverbefore,thecarhasthepotentialtobea
motorforsocialchangeŠnotleastthankstoacombinationoftheautomotiveand
digitalworlds.Forusasamanufacturer,digitizationallowsmoreef˚cientand
˜exibleproductionprocessesplusmoredirectaccesstoourcustomers.The
customersinturnreceivetailor-madeproductsandservices.Autonomousdriving
givesthemcompletelynewwaysinwhichtospendtheirtime.Andsocietyasa
wholebene˚tsfromadditionalgrowthpotentials,improvedroadsafetyand
moreef˚cienttraf˚c˜ows.
Fig.7
Intothefutureonthedigitalhighway(ownpresentation)
218
D.Zetsche



Page 226




Naturally,fiIndustry4.0flisnotexemptfromwhathappenswithmanyfuture
trends:Hardlyhavetheybeenidenti˚ed,whenanalysesappearquestioningwhether

Germanindustryhasaleadingroleorhasfailedtonoticethesignsofthetimes.The
examplesshowthattheGermanpremiummanufacturersarebynomeansonthe
receivingendoffiCarIndustry4.0,flbutaremassivelydrivingtheprocessofchange

themselves.
Likeanyfundamentalchange,digitizationisaccompaniedbychallenges.First
onthelistaredatasecurityanddataprotection:Wewanttoproducenotonlythe

safestcarsforourcustomers,butalsothemostsecure.Tothisend,wecarryout

comprehensivetechnicalandorganizationalsecuritymeasureswhichweconti-

nuouslyimproveinlinewithongoingtechnologicaldevelopments.Clearregulations
concerningdataprotectionwillbecomeevenmoreimportantinthefuture.A
crucialfactorherewillbeconstructivecooperationbetweenindustry,politicsand

research.Thesameappliestoaspectssuchasthelegalparametersforautonomous

driving,thecreationofaninfrastructureforfastdatatransmission,furtherdevelop-

mentoftheeducationsystem,thecreationofindustrystandardsandde˚ninga

frequencyforvehiclecommunication.
Allthesethingswillnotcomeaboutfromonedaytotheother.Likewhenthe
automobile˚rstenteredpeoples™lives,thechangeswillcomestepbystepŠthough
atamuchfasterpace.Currentprogressshowsthatitisbynomeansyesterdaythat
weembarkedonthisjourney.InGermany,wehaveanunrivalednetworkof

manufacturers,suppliersandresearchestablishments.Andasthemostresearch-

intensiveindustryintheFederalRepublic,wehaveallittakesalsotoleadthe˚eld

onthedigitalhighway.Letthefuturebegin.
IntotheFutureontheDigitalHighway219

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