Normann, 2001 Ch. 2 - Reconfiguring the Value Space - quite good "deck"

Question 1

What dimensions might technology enable?

Answer 1

• The effect of technology is to loosen constraints.
• As a result of technological development, what was not possible becomes possible or what was not economically feasible becomes so
• Innovations in transportation and communication (roman empire), significant change in transportation technology (renaissance), engine and transportation infrastructure (Industrial revolution)
• Today’s new technology liberates us from constraints particular in terms of

o Time (When things can be done)
o Place (Where things can be done)
o Actor (Who can do what)
o Constellation (With whom it can be done)

• Together, the elimination of constraints along all these dimensions open up a new, much larger opportunity space of reconfiguration. Some economic actors will be quicker and more comprehensive in seizing the potential and thereby occupying the space (they are prime movers).

Question 2

Draw the “Drivers promoting density - overview” and explain the Desnity principle

Answer 2

The density principle
= the best combination of resources is mobilized for a particular situation (e.g. for a customer at a given time and a given place) independent of location to create the optimum value/cost result

‘Principle of density’, the best combination of resources is mobilized
for a particular situation.

• An immediate effect of dematerialization is liquification, meaning that what has been dematerialized can easily be moved about
• Unbundleability: Know how/what to change (place, time, actor… )
• Dematerialization and unfreezing and liquification promote

Rebundability - Co-Production

Question 3

What is Dematerialization?

Answer 3

Trying to free information from the physical artefact. Example is internet, money and knowledge

• The more we are interested in the utilization of an asset (e.g. car), the more we need to know how it fits into context of future production and value creation. Thus, the more interested we are in in information about its performance and characteristics, its position and time/space related to other assets. Such information also enables us to evaluate the competence requirements for use, as well as the appreciation of the risks involved. For the action (or deliberate non-action) we take related to an asset, information about the ‘asset-in-context’ and not only the asset itself is critical to us.
• Information became totally dematerialized and able to travel with infinite speed in principle existing everywhere in real time. The ability to separate the information aspect from the physical world is the most important driver of today’s technological revolution.

Question 4

What is liquidity?

Answer 4

• Liquification = An immediate effect of dematerialization, meaning what has been dematerialized can easily be moved about. Since it is now possible to dematerialize information about literally any assets, and since this information is highly liquid, new effective global markets for physical assets , for information and for information about information have been created.
• The great strength of digitalization is the versatility of the digital format. Once something has been digitalized it is possible to move it and to remanifest it physically in many different shapes.
• •Another effect is the opportunity for increased specialization. Specialization implies a continuation of opportunities to ‘outsource’ or more generally to relieve actors from performing tasks which can be better performed by more specialized actors elsewhere.

Once something is dematerialized it can easily be moved about.

Example is internet again.

Specialization is outsourcing, or more generally to relieve actors from performing tasks which can be better performed by more specialized actors elsewhere.

Question 5

What is unbundleability?

Answer 5

IKEA, and its ‘customers build and transport the furniture’ is example.

• The novelty is in the way the total activity clusters, not just some pieces traditionally thought of as being ‘at the end’ in the system of value creation, are unbundled and reallocated to different actors
• Unbundle in place/in time/ by actor E.g. IKEA and its customer
• Success IKEA: Knowledge how to unbundle the total set of activities required to create value, and then reallocate them to different economic actors, yet ensure that they are all tied together by an overall concept
• Dematerialization has resulted in ever more refined tools to understand risks

Question 6

What two outcomes comesfrom rebundleability?

Answer 6

Rebundling of assets and activity sets is helped by connectivity, ad especially real-time connectivity that leads to more interactivity and reciprocity between economic actors

• New technologies make increased relieving possible, they also make more enabling possible

o Relieving: ‘I can do this for you since I am more specialized and I can do it better’
o Enabling: ‘I can help you do things yourself that that you were never able to do before by empowering you with more capabilities and assets that you did not have access to’ (e.g. customer value creator)

• Use of ‘barter currencies’ in addition to monetary currencies for transactions and for longer-term relationships

⇒ The innovative use of barter currencies makes it possible to link actors and with each other, each having complementary resources (such as time, competence, information, etc.) therefore increasing the capacity and density of the value-creating system and process
⇒ e.g. ‘barter currencies’: American Express gets hotels, shops, restaurants etc. as distribution outlets for their services in exchange for bringing their strong customer base to the same place

Relieving:’ I can do this for you since I am more specialized and I can do it better’.

Enabling:’ I can help you do things yourself that you were never able to do before by empowering you with more capabilities and assets that you did not have access to.’

Question 7

What is barter currencies?

Answer 7

None moneteriesed trades. = what other values could partner companies exchange?

Question 8

What is denstiy?

Answer 8

The density principle
= the best combination of resources is mobilized for a particular situation (e.g. for a customer at a given time
and a given place) independent of location to create the optimum value/cost result

‘Density’ expresses the degree to which such mobilization of resources for a ‘time/space/actor’ unit can take place

• In the new economy there are liquid markets for virtually all possible resources. These markets are dematerialized information and are global. The resources and assets include raw materials, components, manufactured products, services, information, financial services, risks…
• Activity sets are being taken apart, and each part is allocated along the global, liquid markets, to the most suitable actor in the most suitable place to be performed at the most suitable time. And then activities are again being recombined (rebundled) with the business company and ultimately (and increasingly) with the final customer as the actor and the coordinator.
• With this comes an increase in density. The ultimate expression of the density principle would mean that any economic actor at any time would have more or less the whole world of specialist knowledge and specialized assets at his/her disposal