Lecture 3 - Blockchain Technology and Smart Business Networks. Flashcards
Business model (Timmers)
An architecture for the product, service and information flows, including a description of the various business actors and their roles; and a description of the potential benefits for the various business actors; and description of the sources of revenues.
Defining business models (Alt, Zimmerman)
- Position the business model versus business strategy.
- BM is important for constructing an organization’s strategic positioning and offerings in the market.
- BM is interface between ‘business strategy’ and the ‘business process layers’ coping with the high dynamics in the digital business world. - Business Model Building Blocks:
- Mission, structure, process, revenues, legal issues and technology.
- Enables (technologies channels, network/partners), Structure elements (value chain, processes), and results (value proposition, revenues).
Two well known examples of business model methods:
- Business Model Canvas
- Business Model Elements - Business Model Types: can be based on specific BM examples. Can be classified on ‘degree of innovation’ and ‘functional integration’.
- The Business Model Process: defines how a firm develop a BM:
- Methodologies: prescribing phases and activities for business model development.
- IT tools (like E3 value modeling, Archimate, simulation techniques) that can help to enhance decision making on business models:
+ Visualization
+ What if analysis
+ Impact analysis
+ Requirements analysis
Business model (Laudon and Traver)
Set of planned activities (processes) designed to result in a profit in a marketplace. Not a:
- Business strategy
- Business plan (a document that describes a firm’s business model)
- Business case (supports an investment or project proposal.
E-commerce business model
Uses/leverages unique qualities of Internet and Web.
Single firm innovation / Not IT based innovation
Enhanced value proposition and/or operating model per firm.
Business network innovation / Not IT based innovation
Enhanced value proposition and/or operating model in the network.
Single firm innovation / IT based innovation
Internal IT and Business Bus Enhanced value proposition and/or operating model in the network.
Business network innovation / IT based innovation
Business Bus Enhanced value proposition and/or operating model in the network.
Way IT can affect (innovate) a Business Model
- By changing the value proposition and/or the operating model.
- By enhancing the (quality and speed of) managerial decision making on business modeling.
Only effective Business Model Innovation may lead to outperforming other networks and Smart Business Networks.
Elements of a Business Model
- Value proposition: what are we offering to whom?
- Target segment: which customers do we choose to serve? which of their needs do we seek to address?
- Product or service offering: what are we offering the customers to satisfy their needs?
- Revenue model: how are we compensated for our offering? - Operating model: how do we profitably deliver the offering:
- Value chain: how are we configured to deliver on customer demand.
- Cost model: how do we configure our assets and costs to deliver on our value proposition profitably?
- Organization: how do we deploy and develop our people to sustain and enhance our competitive advantage?
Why is Business Model Innovation relevant?
Provides companies with a way to break out of intense competition where product or process innovations are easily imitated. Can help address downturn-specific opportunities, enabling companies to lower prices or reduce risks and costs of ownership for customers. It can extract brand value by extending the business model.
Establishing a capability for business model innovation
Companies:
- Assess the opportunities and identify the most promising projects.
- Prepare the organization to pilot the projects and select the best one for scale up.
- Systematize these one-off efforts by building the platforms and skills needed to repeat the success.
Important activities:
1. Uncovering opportunities.
2. Implementing the new model.
3. Building the platform and skills.
