Alternative Approaches to Business Models Flashcards
How a firm decides who they are creating value for
Identify - the stakeholder for and with whom they seek to create value. e.g. customers, suppliers, shareholders.
Prioritise - rank the stakeholders.
Establish and identify - the needs of the high priority stakeholders.
Formulate value propositions - that meet the needs of the high priority stakeholders.
Each stakeholder is ranked by:
Power - ability to impose their will.
Legitimacy - according to the norms and values of the firm and society.
Urgency - the need for immediate action in the light of a stakeholder claim.
Capturing Residual Value
Cost Model - established when defining value. key factors of total cost are: efficiency of the processes, levels of activity, resources consumed during activities, price paid for resources.
Revenue Model - earned when goods and services are delivered. prices should reflect the customer segments that the firm addresses, the market conditions and any regulatory control in place.
