Lecture 2 Flashcards
What is a business model
A set of planned activities (or processes) designed to provide value for th ecustomers and to result in a profit in a marketplace for the firm. so the focus is on value for the customer
Why value a business model:
Companies whose operating margins had grown faster than their competitors over the previous five years were twice as likely to emphasize business model innovation, as opposed to product or process innovation. One CEO explained why his companys focus on business model innovation had grown:
In the operations area, much of the innovations and cost savings that could be achieved have already been achieved. Our greatest focus is on business model innovation, which is where the greatest benefits lie. Its not enough to make a difference on product quality or delivery readiness or production scale. Its important to innovate in areas where our competition does not act
Business value modelling schematics:
Analysing relations among business actors in a value network requires schematics as they allow managers to configure their business models in ways that maximize their effectiveness, as well as helping others understand a model and, in doing so, helping to convince others of its investment potential
Business value modeling E3 value:
The exchange of objects of value between actors performing activities
Foundation in: (E3 value)
Value chain thinking, marketing, micro economics and E-commerce business cases
Actor:
: independent entity such as accompany or person
E.g. Listener and Music shop
Value activity:
A process, performed by an actor which adds or creates value
A value activity is performed economically and technologically independent from other value activities
A value activity cannot be decomposed in smaller activities. Each can be assigned to different actors
Value object (type)
Value objects are produced or consumed by value activities
Value objects interact with actors
The value of an object is comparative, personal and situational
Basic types: money, good or service
Value port:
Actors and value activities are connected to each other vie value ports
On ports, value objects are visible to the outside world
Value ports have a direction: in or out
Value ports have properties such as the unit price (range) of value objects
Value interface:
A value interface models a service offered or requested by a value activity
Multiple value interfaces per value activity
A value activity typically uses and produces service
Typically multiple versions of products are used/produced
value models
Focus on business value, abstract process details (the yh)
Process models
Focus on the processes as business actions in sequence (the what)
characteristic of the Reinvention phase of e-commerce
D) expansion of e-commerce to include services as well as goods
characteristic of the Consolidation phase of e-commerce?
brand extension and strengthening becomes more important than creating new brands
webbrooming
the practice of researching a product online before
purchasing it at a physical store?
