Business models

Question 1

What are the three business models?

Answer 1

Value Chain, Value Shops and Value Networks

Question 2

What is a business model?

Answer 2

Business model describes how a firms creates value for the customer an appropriates value from its performance of activities.

Question 3

How does Value Chain create value?

Answer 3

By making, delivering and supporting a product. (creating and combining components into products)

Question 4

How does Value Shops create value?

Answer 4

By providing solutions to complex problems. (creating and combining competencies into solutions)

Question 5

How does Value Networks create value?

Answer 5

By enabling interaction. (creating and combining connections among people, places, and things)

Question 6

Which value system is Value Chain using?

Answer 6

Sequentially interrelated value systems. (of

suppliers, producers, and distributors, each adding value to the output from the preceding chain)

Question 7

Which value system is Value Shops using?

Answer 7

Reciprocally linked value systems of sub-contracting and collaborating firms. (that together harness the
knowledge required to develop desired solutions)

Question 8

Which value system is Value Networks using?

Answer 8

Horizontally interconnected and vertically layered value systems. (Horizontal interconnection or
compatibility enables customers of one firm to network with customers of other firms. Vertical layering allows one networking service to use another networking service as its infrastructure)