CRAFTING BUSINESS MODELS

1
CHAPTER 2

• CRAFTING BUSINESS MODELS

2
AGENDA

• Business Models
• Linking Value and Strategy
• Classifying network Business Models
• Evolving Network Business Models
• Examples
• Critique

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Business Model
CONCEPT Strategy
Business Environment
Market Opportunity
Human and Social
Financial
To Stakeholders
CAPABILITIES Resources
VALUE Performance
To owners and investors
To Industry, Economy, Society
Physical
Informational
4
Linking Value and Strategy
CONCEPT Strategy
CAPABILITIES Resources
VALUE Performance
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Linking Value and Strategy
CONCEPT Strategy
OpportunityProductsServicesCompetitive
DynamicsStrategic EvolutionPricingMarketingRev
enue GenerationGrowth
It is only through our ideas and ability to sell
them that we earn income
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Linking Value and Strategy
ResourcesStructures, FunctionsProcessesSupply
ChainsInnovationDecisionsPartnershipsAsset
AcquisitionAgility
Resources and assets cost money processes must
be built and managed
CAPABILITIES Resources
7
Linking Value and Strategy
Value depends on perceptions, measurements,
expectations, shareholder roles
ExpectationsSatisfactionCritical
ValuesPayback, Exposure, C/B ratiosStakeholder
RolesReputationBrandingAffiliation
VALUE Performance
8
Value
What is valuable? How is value computed? 1. Is a
Perception2. Susceptible to Measurement
Evaluation Capabilities3. Also related to
Satisfaction4. And thus to Needs5. In turn both
related to Expectations Which of these are
sensitive to information technology, AND HOW?
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4-Stage Attitude Formation Model
Attitude (Evaluation)
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Classifying Business Models
Businesses built on an infrastructure
Producers
Distributors
Businesses providing the infrastructure
Producers
Infrastructure Distributors
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Classifying Network Business Models
Businesses built on a networked
infrastructure
Producers
Focused Distributors
Portals
Businesses providing the networked
infrastructure
Producers
Focused Infrastructure Distributors
InfrastructurePortals
12
Classifying Network Business Models
Businesses built on a networked
infrastructure
Producers
Focused Distributors
Portals
Businesses providing the networked
infrastructure
Producers
Focused Infrastructure Distributors
InfrastructurePortals
13
Classifying Network Business Models
Businesses built on a networked
infrastructure
Producers
Focused Distributors
Portals
Businesses providing the networked
infrastructure
Producers
Focused Infrastructure Distributors
InfrastructurePortals
14
Evolving Business Models
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Evolving Models Examples and Critique

• American Express Interactive
• Amazon.Com
• So What?
• What does TECHNOLOGY add?
• What are the risks?
• How to be a leader?