Exploring the Fit between Business Strategy and Business Model

Question 1

What does the contingency theory suggest?

Answer 1

There is no optimal strategy for all organizations and it states that the most desirable choice of strategy varies according to the contingency factors

Question 2

Why is the business model an important contingency factor?

Answer 2

since it affects the firm’s possibliities for value creation and value capture

Question 3

What does the contingency theory try to understand?

Answer 3

the behaviour of a firm by separately analyzing its constituent parts and making one-to-one comparisons of variables.

Question 4

What do novelty centered business models refer to?

Answer 4

new ways of conducting transactions between participants. They aim at creation new transaction types and addressing new market segments

Question 5

What should novelty centered business models be coupled with to enhance the firm’s performance?

Answer 5

differentiation or cost leadership

Question 6

What does a product market strategy focus on?

Answer 6

what type of product market positioning to adopt and when to enter the market.

Question 7

What does an effiency centered business model refer to?

Answer 7

to the measures firms may take with the intention to reduce the transaction costs for all transaction participants.

Question 8

What should effiency centered business models be coupled with to enhance the firm’s performance?

Answer 8

cost leadership

Question 9

When will two design elements fit well together?

Answer 9

if there exist complementarities between them, which means that the marginal benefit of A increases with the level of B.

Question 10

Why may a focus of innovation in multiple domains be mutually reinforcing?

Answer 10

by delivering new products and services and increasing the number of transaction types and market segments.

Question 11

What are considered entrepreneurial rents?

Answer 11

Capturing rents from business model innovation after moving into a market earlier