digital strategy Flashcards
what is a business model
A business model is a blueprint of how a company creates and captures value
1. Value proposition
2. Customer segments
3. Customer relationships
4. Channels
5. Key resources
6. Key activities
7. Key partners
8. Cost structure
9. Revenue streams
what is business model innovation
A business model innovation is a change in 2 or more dimensions of the business model simultaneously
* value proposition (what?)
* value chain (how?)
* revenue model (why?)
* target consumer (who?)
explain the razor-and-blade business model
RAZOR-AND-BLADE= The basic product is cheap or given away for free. The consumables that are needed to use or operate it, on the other hand, are expensive and sold at high margins. The initial product’s price lowers the customer’s barrier to purchase, while the subsequent recurring sales cross-finance it. Usually, these products are technologically bound to each other to f urther enhance this effect.
For example, Microsoft makes no money on the sale of its Xbox One X game console even at an average $499 price, but it gets about $7 out of each $60 video game.
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Service providers often sell mobile phones below-cost or give them away because they know they will make the money back over time from recurring fees or data charges. Printers are sold at cost, a loss, or at a low-profit-margin with the understanding that ink cartridges will provide recurring revenue
explain aikido business model
Aikido is a Japanese martial art in which the strength of an attacker is used against him or her.
As a business model, Aikido allows a company to offer something diametrically opposed to the image and mindset of the competition.
This new value proposition attracts customers who prefer ideas or concepts opposed to the mainstream.
Another example is the company Tesla, which has used the Aikido business model to disrupt the traditional automobile industry. Instead of trying to compete with established car manufacturers, Tesla has worked to change consumer perceptions of electric cars and has actively partnered with other companies to create charging infrastructure and battery technology.
explain cross selling
In this model, services or products from a formerly
excluded industry are added to the offerings, thus
leveraging existing key skills and resources. In retail
especially, companies can easily provide additional
products and offerings that are not linked to the main
industry on which they were previously focused. Thus,
additional revenue can be generated with relatively
few changes to the existing infrastructure and assets,
since more potential customer needs are met.
explain add-on and flat rate
ADD-ON= The core offering is priced competitively, but there are numerous extras that drive the final price up. In the end, the costumer pays more than he or she initially assumed. Customers benefit from a variable offer, which they can adapt to their specific needs.
FLAT RATE= a single fixed fee for a product or service is charged, regardless of actual usage or time restrictions on it. The user benefits from a simple cost structure while the company benefits from a constant revenue stream.
explain direct selling
DIRECT SELLING (Cutting out the middle-man)= refers to a scenario whereby a company’s products are not sold through intermediary channels, but are available directly from the manufacturer or service provider. In this way, the company skips the retail margin or any additional costs associated with the intermediates. These savings can be forwarded to the customer and a standardized sales experience established. Additionally, such close contact can improve customer relationships.
explain freemium
FREEMIUM= The basic version of an offering is given away for free in the hope of eventually persuading the customers to pay for the premium version.
The free offering is able to attract the highest volume of customers possible for the company. The generate the revenue, which also cross-finances the free offering.
explain long tail
One example of a company that has successfully leveraged the long tail model is Amazon. Amazon has a vast selection of products, including many niche and hard-to-find items. By offering such a wide variety of products, Amazon is able to appeal to a broad range of customers and capture a significant market share.
Another example of a company that uses the long tail model is Netflix, which offers a wide variety of TV shows and movies, including niche and hard-to-find content. By offering a vast selection of content, Netflix is able to appeal to a wide range of customers and capture a significant market share.
In summary, the long tail business model is a strategy that focuses on selling a large number of niche products or services, which collectively make up a significant market share. It is characterized by the ability to appeal to a wide range of customers by offering a vast selection of products or services.
deontology vs conesquantialism
Deontology is an ethical theory that emphasizes the importance of following moral rules and duties, regardless of the consequences. The theory holds that some actions are inherently right or wrong, and that moral duty should be our primary guide in making decisions. Deontologists believe that following moral rules is the only way to ensure that people treat each other with respect and dignity.
Consequentialism, on the other hand, is an ethical theory that focuses on the consequences of our actions. It holds that the moral value of an action is determined by its outcome, and that we should judge actions based on their net benefits or harms. Consequentialists believe that the ultimate goal of morality is to maximize overall happiness or well-being.
Disruptive new technologies often trigger debates between deontology vs. consequentialism: the “old rules vs. new tech dilemma”
Old rules that were designed before the new technology existed
vs.
New technologies bear promise of offering exciting new solutions
how do you approach ethical issues ?
with the ecc framework
EXPLICIT
Make explicit your assumptions, so that even if others do not agree with you at least they can better understand why they do not agree.
We often have strong moral intuitions which seem obvious to ourselves, yet others might disagree. Instead of just shouting to each other “This is good/bad”, it helps to make explicit your argumentation.
It’s not because ultimately there are no final answers, that you can’t reach agreement on certain values between your housemates, your partner, your colleagues, etc. It’s often just a matter of agreeing on what factors influence the decision, and how they should be weighed.
CONSISTENT
If not correctness, you can at least aim for consistency. If only to avoid taking that position which suits you best. E.g. many people think decisions should be made in such a way to minimize the number of casualties, but at the same time will want to protect their own life at all cost. This is not consistent.
Often explicit reflection about inconsistencies results in a more nuanced position (for example you might still want to save as many lives as possible, but will take into account the value of the individual -for example by weighing their age). Detecting inconsistencies in moral arguments is a good strategy to forge agreement on moral issues.
CONTEXTUAL
As the examples demonstrate, discrepancies between the deontological and consequentialist viewpoint is one of the main causes of ethical conflict. In the end, very diverse moral issues all come down to the same dilemma: deontological vs. consequentialist.
what do you do per context
Different viewpoints do best in different contexts.
In general: deontological performs better in complex contexts
Example: How to find the best needle in a haystack?
Consequentialist: Collect all needles, compare them, select the best
Deontological: Determine what a sufficiently good needle looks like, and search only until you find one
A DEONTOLOGICAL STRATEGY is typically less resource intensive. It only requires information about the action at hand, and a moral evaluation of similar such actions in the past.
BOUNDED RATIONALITY: In situations where time or information is limited, or complexity or uncertainty is very high, deontological rules are often preferable.
They provide time-tested rules of thumb that although not optimized for the situation at hand, provide some guarantee of a “good enough” outcome, especially in static environments.
A CONSEQUENTIALIST POSITION requires more input. It not only requires information about the action at hand, but also requires accurate predictions of its consequences.
VERY RESOURCE INTENSIVE: This might take a lot of time or require information that is difficult to obtain. In many situations different actions affect each other (complexity) and accurate predictions are all but impossible.
Nevertheless, consequentialist positions can in theory achieve superior outcomes, especially in new situations lacking time-tested rules.
