Attributes

New technologies provide access to entirely new capabilities, allowing us to reimagine the business models we use to create and capture value. Our models are meant to act as conceptual frameworks for identifying strategic opportunities enabled by innovative technologies and relevant to the ever-evolving SEA Region 

The following industries have been chosen based on a variety of key factors which expose them to growth and act to reinforce broader social and economic development. 

Stage of Development 
As any economy goes through different stages of growth (refer to Rostow’s Stages of Growth) certain industries will be more important than others in enabling the most social and economic development. The following industries have been chosen due to their importance in enabling the the region to achieve. 

Disruptive Models 
Certain industries are more exposed than others to leveraging available technologies for the implementation of disruptive business models. At SEA, we focus on industries pre-disposed to taking advantage of our focus models

Available Technologies

Although technological innovation permeates all industries in an economy, certain industries are more exposed to newly available technologies than others. The following industries have been chosen due to the importance of key technologies in enabling their growth. 

Growth Enabling

No industry operates in isolation. As an economy develops key industries act as enablers for growth in other industries, sending positive feedback loops throughout the broader economy. At SEA, we focus on these growth enabling industries as they are key for long-term social and economic development.

Agile & Adaptive

An Agile-Adaptive model employs technology to make decisions that better reflect market needs allowing for real-time adaptation to changes in the marketplace.

To be effective at an Agile-Adaptive business model an organization needs to be hyperaware, employing the capacity to start quickly, make mistakes, learn, and ‘pivot’ the business to align with market opportunity. This hyperawareness is directly related to a company’s ability to detect and monitor changes in its internal and external business environment.

This business model values the ability to capture and make sense of market-specific data. Along with this, the ability to keep costs low by simply creating a “minimum viable product” that can be quickly tested and iterated upon if needed is critical. This model tends to result in greater value for customers and lower cost for companies.

To be effective at an Agile-Adaptive business model an organization needs to be hyperaware, employing the capacity to start quickly, make mistakes, learn, and ‘pivot’ the business to align with market opportunity. This hyperawareness is directly related to a company’s ability to detect and monitor changes in its internal and external business environment.

This business model values the ability to capture and make sense of market-specific data. Along with this, the ability to keep costs low by simply creating a “minimum viable product” that can be quickly tested and iterated upon if needed is critical. This model tends to result in greater value for customers and lower cost for companies.

Asset Sharing

An Asset Sharing model creates more value with existing resources by connecting spare capacity with excess demand enabling costs to be dispersed and assets to be used more effectively. 

With the rise of the Internet, connected devices, cloud technologies and other forms of digital technology, information has become more readily available, and the cost of coordinating sharing activities has fallen dramatically. Such technology has been the critical driver in connecting users and enabling transactions to be completed both on and offline.

Asset sharing unlocks value for everyone by reducing barriers to entry and increasing multi-sided positive network effects. This model allows consumers access, rather than forcing ownership, of a product or asset, in turn, unlocking value across multiple dimensions by maximizing existing capacity and encouraging effectiveness over efficiency.

With the rise of the Internet, connected devices, cloud technologies and other forms of digital technology, information has become more readily available, and the cost of coordinating sharing activities has fallen dramatically. Such technology has been the critical driver in connecting users and enabling transactions to be completed both on and offline.

Asset sharing unlocks value for everyone by reducing barriers to entry and increasing multi-sided positive network effects. This model allows consumers access, rather than forcing ownership, of a product or asset, in turn, unlocking value across multiple dimensions by maximizing existing capacity and encouraging effectiveness over efficiency.

Closed-Loop

Closed loop models reduce overall resource costs for companies by keeping products, components and materials at their highest utility value, reducing costs and risk exposure. 

Traditional business models based on a linear system assume ongoing access and availability of cheap natural resources. Closed-loop systems instead aim to keep existing products, resources and materials at their highest utility value, in turn, reducing costs, overall risk exposure and negative environmental impacts. Well designed closed-loop systems enable businesses to capture untapped value through a variety of strategies.

An organization’s ability to capitalize on this model is directly related to its’ ability to track materials and by-products across the value chain, in turn, enabling the identification of waste streams that can be turned into value. Existing technologies like RFID and GPS play important roles, while newer technologies like nanosensors, the IoT and Blockchain promise to enable much greater tracking power, data security and precision.

Traditional business models based on a linear system assume ongoing access and availability of cheap natural resources. Closed-loop systems instead aim to keep existing products, resources and materials at their highest utility value, in turn, reducing costs, overall risk exposure and negative environmental impacts. Well designed closed-loop systems enable businesses to capture untapped value through a variety of strategies.

An organization’s ability to capitalize on this model is directly related to its’ ability to track materials and by-products across the value chain, in turn, enabling the identification of waste streams that can be turned into value. Existing technologies like RFID and GPS play important roles, while newer technologies like nanosensors, the IoT and Blockchain promise to enable much greater tracking power, data security and precision.

Collaborative Ecosystem

A Collaborative model improves collaboration with supply chain partners to help allocate risks more appropriately and reduce overall costs, creating greater value for the entire ecosystem.

While traditional value chains create value based on incremental value addition in the production of goods and services, a Collaborative model creates value based on knowledge exchange which drives the proactive production of goods and services. Companies can use this model attribute to create and scale system-level impact by working with non-traditional partners across industry, location and sector.

This model emphasizes connectivity at all levels, in all directions. This allows companies to gain advantages in speed, scale and flexibility by leveraging third parties, shifting strategic advantage from the internal bounds of the organization to the resources an organization can engage with to bring new value to the market. This model is especially relevant in emerging frontier markets where local relationships are so critical for market entry.

While traditional value chains create value based on incremental value addition in the production of goods and services, a Collaborative model creates value based on knowledge exchange which drives the proactive production of goods and services. Companies can use this model attribute to create and scale system-level impact by working with non-traditional partners across industry, location and sector.

This model emphasizes connectivity at all levels, in all directions. This allows companies to gain advantages in speed, scale and flexibility by leveraging third parties, shifting strategic advantage from the internal bounds of the organization to the resources an organization can engage with to bring new value to the market. This model is especially relevant in emerging frontier markets where local relationships are so critical for market entry.

Distribution Disruption

A Distribution Disruption model is about allowing more customers to be reached with a wider variety of products. These emerging channels benefit both buyers and sellers as traditional market boundaries are transcended.

These emerging channels act to transcend geographic proximity, leading to an increasingly fragmented producer market that is less and less inhibited by the scarcity of shelf space. This is especially beneficial in markets with underserved customers with excess demand for differentiated products. This disruption is often a key enabler for the emergence of online e-commerce platforms.

With disrupted distribution comes the diversification of sales channels where traditional retailers bundle online, mobile and physical channels to compete for sales. This results in omni-channel distribution where products can be ordered online and shipped directly to the customer or in shipped to store for customer pickup. This has a significant impact on the distribution network structure and capacity.

Emerging distribution channels act to transcend geographic proximity, leading to an increasingly fragmented producer market that is less and less inhibited by the scarcity of shelf space. This is especially beneficial in markets with underserved customers with excess demand for differentiated products. This disruption is often a key enabler for the emergence of online e-commerce platforms.

With disrupted distribution comes the diversification of sales channels where traditional retailers bundle online, mobile and physical channels to compete for sales. This results in omni-channel distribution where products can be ordered online and shipped directly to the customer or in shipped to store for customer pickup. This has a significant impact on the distribution network structure and capacity.

Free

The free business model comes in many flavors but the most common work by offering simple and basic services for free while offering advanced or additional features at a premium.

In order to employ the Free business model successfully the product or service offered must be high value to the customer, resulting in both high customer satisfaction and the likelihood of others sharing your product or service, leading to viral effects. This works because in a typical business the single biggest expense is sales and marketing. When something is offered for free customers can be acquired at a low cost, enabling monetization in a variety of ways.

A powerful effect of using the free strategy is that it usually results in a far larger customer base using the free products, who in turn, become proponents for the company. This expanded market share can also have a huge effect on the price that acquirers or investors are willing to pay for your company, as they recognize that even though these customers have yet to be monetized, they represent a great potential for future monetization.

In order to employ the Free business model successfully the product or service offered must be high value to the customer, resulting in both high customer satisfaction and the likelihood of others sharing your product or service, leading to viral effects. This works because in a typical business the single biggest expense is sales and marketing. When something is offered for free customers can be acquired at a low cost, enabling monetization in a variety of ways.

A powerful effect of using the free strategy is that it usually results in a far larger customer base using the free products, who in turn, become proponents for the company. This expanded market share can also have a huge effect on the price that acquirers or investors are willing to pay for your company, as they recognize that even though these customers have yet to be monetized, they represent a great potential for future monetization.

Long-Tail

The long tail model employs a value proposition that collectively targets products in low demand or with low sales volume to make up a market share that is profitable, creating value for all.

The Long Tail business model brings an assortment of niche products that sell relatively infrequently to market. This adds value to the customer experience, where previously underserved consumers can now access and purchase goods online. Likewise, this is also beneficial for businesses leveraging the model as aggregate sales of niche items can be as profitable as bestsellers due to low inventory cost of online retail.

Critical to the success of this model is the ability to offer consumers the tools needed to enable active searching and effective filtering. Offering more variety alone doesn’t shift demand, both supply and demand are active contributors. Algorithms designed for the detection of patterns in buyer shopping habits is also valuable, as shopping habits act to inform filters and recommendations, leading to positive feedback loops.

The Long Tail business model brings an assortment of niche products that sell relatively infrequently to market. This adds value to the customer experience, where previously underserved consumers can now access and purchase goods online. Likewise, this is also beneficial for businesses leveraging the model as aggregate sales of niche items can be as profitable as bestsellers due to low inventory cost of online retail.

Critical to the success of this model is the ability to offer consumers the tools needed to enable active searching and effective filtering. Offering more variety alone doesn’t shift demand, both supply and demand are active contributors. Algorithms designed for the detection of patterns in buyer shopping habits is also valuable, as shopping habits act to inform filters and recommendations, leading to positive feedback loops.

Market Network

The long tail model employs a value proposition that collectively targets products in low demand or with low sales volume to make up a market share that is profitable, creating value for all.

The Long Tail business model brings an assortment of niche products that sell relatively infrequently to market. This adds value to the customer experience, where previously underserved consumers can now access and purchase goods online. Likewise, this is also beneficial for businesses leveraging the model as aggregate sales of niche items can be as profitable as bestsellers due to low inventory cost of online retail.

Critical to the success of this model is the ability to offer consumers the tools needed to enable active searching and effective filtering. Offering more variety alone doesn’t shift demand, both supply and demand are active contributors. Algorithms designed for the detection of patterns in buyer shopping habits is also valuable, as shopping habits act to inform filters and recommendations, leading to positive feedback loops.

The Long Tail business model brings an assortment of niche products that sell relatively infrequently to market. This adds value to the customer experience, where previously underserved consumers can now access and purchase goods online. Likewise, this is also beneficial for businesses leveraging the model as aggregate sales of niche items can be as profitable as bestsellers due to low inventory cost of online retail.

Critical to the success of this model is the ability to offer consumers the tools needed to enable active searching and effective filtering. Offering more variety alone doesn’t shift demand, both supply and demand are active contributors. Algorithms designed for the detection of patterns in buyer shopping habits is also valuable, as shopping habits act to inform filters and recommendations, leading to positive feedback loops.

On-Demand

An On-Demand model fulfills consumer demand on the basis of immediate access to goods and services, making more efficient use of existing unutilized assets and infrastructure at scale.

On-Demand marketplaces can only scale through continuous growth in two separate user groups; the seller and the buyer. While both parties value immediacy, buyers are dependent on the merchant to facilitate the transaction. In a traditional business the only party that needs to be convinced to buy a product is the buyer but with an On-Demand model, both the buyer and seller must be convinced of the inherent value of being an active participant on the platform.

This model qualifies for the chicken and the egg scenario and is one of the most difficult to execute. Not only is the business responsible for creating a sustainable business model for themselves, but also for the sellers in order for them to even consider joining. In short, you are creating an online economy, not simply a business. This requires two different messages of value, two different marketing strategies, two different sets of customer preferences and so on.

On-Demand marketplaces can only scale through continuous growth in two separate user groups; the seller and the buyer. While both parties value immediacy, buyers are dependent on the merchant to facilitate the transaction. In a traditional business the only party that needs to be convinced to buy a product is the buyer but with an On-Demand model, both the buyer and seller must be convinced of the inherent value of being an active participant on the platform.

This model qualifies for the chicken and the egg scenario and is one of the most difficult to execute. Not only is the business responsible for creating a sustainable business model for themselves, but also for the sellers in order for them to even consider joining. In short, you are creating an online economy, not simply a business. This requires two different messages of value, two different marketing strategies, two different sets of customer preferences and so on.

Open

An Open model encourages the sharing of knowledge under open licenses, promoting an intimately integrated ecosystem of stakeholders operating under a model of transparency, promoting positive externalities.

While small minorities often harness technologies and domain-specific knowledge at the cost of other stakeholders and the broader market, an Open model seeks to democratize this value by redirecting the returns to those that produced them. This model tends to create an open network of exchanges, where knowledge and information is curated and grown in a commons, accessible to all. IP is not hoarded but released under a license that allows for different types of re-use.

Open models generally come in one of two flavors; an Inside-out approach where organizations license or sell their knowledge/resources or an Outside-in approach where an organization brings external knowledge/resources into its value creation process. In a world characterized by distributed knowledge, organizations can often create more value by integrating outside knowledge into their innovation strategy, avoiding costly and time consuming R&D processes.

While small minorities often harness technologies and domain-specific knowledge at the cost of other stakeholders and the broader market, an Open model seeks to democratize this value by redirecting the returns to those that produced them. This model tends to create an open network of exchanges, where knowledge and information is curated and grown in a commons, accessible to all. IP is not hoarded but released under a license that allows for different types of re-use.

Open models generally come in one of two flavors; an Inside-out approach where organizations license or sell their knowledge/resources or an Outside-in approach where an organization brings external knowledge/resources into its value creation process. In a world characterized by distributed knowledge, organizations can often create more value by integrating outside knowledge into their innovation strategy, avoiding costly and time consuming R&D processes.

Personalization

The Personalization model utilizes technology to produce products and offer services that are better tailored to customer’s individual and immediate needs at a competitive price.

This model generally comes in one of two flavors; a Mass Personalized approach where products are mass produced and modified in the way that they reach customers using data specific to the individual or a Mass Customization approach where products are mass-produced but customers have the ability to customize the order. This model is especially relevant in emerging markets where creating new markets for economic and employment growth is so crucial for development.

This model generally comes in one of two flavors; a Mass Personalized approach where products are mass produced and modified in the way that they reach customers using data specific to the individual or a Mass Customization approach where products are mass-produced but customers have the ability to customize the order. This model is especially relevant in emerging markets where creating new markets for economic and employment growth is so crucial for development.

Personalization goes beyond just serving existing customers better to enable entirely new customer segments experiencing real world problems and unmet needs. Key to this model is the ability to recognize customers in context of the communities they exist within and the problems they face. Consumer data is critical to give businesses deeper insight into individual customer needs, while E-commerce and digital transactions enable businesses to interact with customers in new ways.

This model generally comes in one of two flavors; a Mass Personalized approach where products are mass produced and modified in the way that they reach customers using data specific to the individual or a Mass Customization approach where products are mass-produced but customers have the ability to customize the order. This model is especially relevant in emerging markets where creating new markets for economic and employment growth is so crucial for development.

Unbundling

An Unbundled model leverages advances changes the economics of production and distribution, allowing for product offerings to be decomposed into narrower, more specialized component offerings.

Whereas the traditional integrated business model combines customer relationship, product innovation and infrastructure management under one roof, an unbundled model separates these capabilities due to each’s’ own unique economic, competitive and cultural imperatives. This, in turn, enables customers to gain access to offerings that are more effective, cheaper or better fit their specific needs. This model shifts traditional thinking form expecting “more than what you want” to “just what you want”.

While customer relationship companies are highly service-oriented and adopt a customer-first mentality, product innovation companies are all about speed to market and nurturing their creative stars. On the other hand, infrastructure management is about building and managing facilities for high-volume, repetitive operational tasks. The Unbundled model is most likely to be useful for businesses that operate in markets that rely on products with multiple integrated yet underutilized and expensive components.

Whereas the traditional integrated business model combines customer relationship, product innovation and infrastructure management under one roof, an unbundled model separates these capabilities due to each’s’ own unique economic, competitive and cultural imperatives. This, in turn, enables customers to gain access to offerings that are more effective, cheaper or better fit their specific needs. This model shifts traditional thinking form expecting “more than what you want” to “just what you want”.

While customer relationship companies are highly service-oriented and adopt a customer-first mentality, product innovation companies are all about speed to market and nurturing their creative stars. On the other hand, infrastructure management is about building and managing facilities for high-volume, repetitive operational tasks. The Unbundled model is most likely to be useful for businesses that operate in markets that rely on products with multiple integrated yet underutilized and expensive components.

Usage-Based

The Usage-Based Pricing model allows customers to benefit from being charged only when they use a product or service, rather than having to buy something outright, increasing both access and demand.

Aligning pricing with usage is becoming increasingly viable for a wider range of products and services, both physical and digital as technological advances facilitate smaller and more dynamic increments of use across a variety of customer contexts. Aligning product pricing with use can unlock latent demand by reducing up-front costs while expanding market size. Markets with significant up-front asset requirements and unmet demand are best positioned to capitalize on this model.

Whereas in the past, an Access-based Pricing model tended to be based on expected need, rather than actual usage, today we’re seeing a new crop of Usage-based Pricing models that allow customers to pay for actual usage of a product or service, rather than bearing the costs of ownership. Aligned with Asset Sharing and representative of a broader societal shift from ownership to access, Usage-based Pricing offers considerable benefits to customers and businesses alike.

Aligning pricing with usage is becoming increasingly viable for a wider range of products and services, both physical and digital as technological advances facilitate smaller and more dynamic increments of use across a variety of customer contexts. Aligning product pricing with use can unlock latent demand by reducing up-front costs while expanding market size. Markets with significant up-front asset requirements and unmet demand are best positioned to capitalize on this model.

Whereas in the past, an Access-based Pricing model tended to be based on expected need, rather than actual usage, today we’re seeing a new crop of Usage-based Pricing models that allow customers to pay for actual usage of a product or service, rather than bearing the costs of ownership. Aligned with Asset Sharing and representative of a broader societal shift from ownership to access, Usage-based Pricing offers considerable benefits to customers and businesses alike.

Have a specific question regarding the SEA Ecosystem?

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© 2019 SEA. All rights reserved.

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