BUSINESS STRATEGY
FIRST LESSON
Firm as an autonomous administrative unit, a set of resources organized to offer goods and /or
service, directed to profit
Entrepreneur as the individual who is carrying out the new combinations of means of production
Strategic choices
Decisions that impact on the relationship between the firm and its environment:
(1) markets to compete in;
(2) unique value the firm will offer in those markets;
(3) the resources and capabilities required to offer that unique value better than competitors;
(4) ways to sustain the advantage by preventing imitation
BUSINESS MODEL
- a tool that spread very quickly
- different structures of Business model available
- can be used to think, design and test
- describes the rationale of how an organization creates, delivers and captures value
, 1. Customer segments
We create value for the mass market, niche market, different segments, very diverse segments?
Organization serves 1 or several customer segments
2. Value proposition
Why should customers choose our product/service? - Related to the offer of the firm
- newness, price, customization, cost reduction, improved performance
- risk reduction, accessibility, design, status
Seeks to solve customer problems and satisfy customer needs with value propositions
3. Channels
How can we reach the customer?
- from customers’ awareness to evaluation, purchase, delivery and after sales
- own/partner channels
- direct/indirect
- independence/integration of channels
Value propositions are delivered to customers through communication, distribution and sales
channels
4. Customer relationship
How do we keep relationships with customers?
- personal assistance
- dedicated personal assistance
- self-service
- automated service
- communities
- co-creation
Customer relationships are established and maintained with each customer segment
5. Revenue streams
How are customers paying? How would they be willing to pay?
- one-time payments
- subscription fee, renting, leasing, licencing, usage fee, after sale, brokerage fee,
advertising
- fixed and dynamic pricing
,Revenue streams result from value propositions successfully offered to customers
6. Key resources
Which resources contribute most to the value proposition?
- human, physical, financial, digital, knowhow
Key resources - assets required to offer and deliver the previously described elements by
performing a number of Key activities
# Amazon - warehouse storage
7. Key activities
Which activities contribute most to the value proposition?
- production, marketing, R&D
- problem solving
- platform management
8. Key partnership
Which is the network of partners that allow the fulfillment of the value proposition for our
customers?
Who are they?
Who do they provide?
- access to resources, access to status/legitimacy
- uncertainty reduction
Some activities are outsourced and some resources are acquired outside the enterprise
9. Cost structure
The impact of resources and activities on our costs?
- depending on our value proposition (cost or value driven)
- fixed vs variable costs
- access to different economies of costs (economy of scale, scope, experience)
The business model elements result in the cost structure
BUSINESS MODEL ARCHETYPES
1. Un-bundling
2. Multi-sided
, 3. Long tail
4. Free
5. Open
UN-BUNDLING BUSINESS MODEL
Companies gain a competitive advantage by
- bundling
- unbundling some of the activities
It depends on technological evolution and firm’s position
# Equipment manufacturers, Mobile business, Content providers
FIRST LESSON
Firm as an autonomous administrative unit, a set of resources organized to offer goods and /or
service, directed to profit
Entrepreneur as the individual who is carrying out the new combinations of means of production
Strategic choices
Decisions that impact on the relationship between the firm and its environment:
(1) markets to compete in;
(2) unique value the firm will offer in those markets;
(3) the resources and capabilities required to offer that unique value better than competitors;
(4) ways to sustain the advantage by preventing imitation
BUSINESS MODEL
- a tool that spread very quickly
- different structures of Business model available
- can be used to think, design and test
- describes the rationale of how an organization creates, delivers and captures value
, 1. Customer segments
We create value for the mass market, niche market, different segments, very diverse segments?
Organization serves 1 or several customer segments
2. Value proposition
Why should customers choose our product/service? - Related to the offer of the firm
- newness, price, customization, cost reduction, improved performance
- risk reduction, accessibility, design, status
Seeks to solve customer problems and satisfy customer needs with value propositions
3. Channels
How can we reach the customer?
- from customers’ awareness to evaluation, purchase, delivery and after sales
- own/partner channels
- direct/indirect
- independence/integration of channels
Value propositions are delivered to customers through communication, distribution and sales
channels
4. Customer relationship
How do we keep relationships with customers?
- personal assistance
- dedicated personal assistance
- self-service
- automated service
- communities
- co-creation
Customer relationships are established and maintained with each customer segment
5. Revenue streams
How are customers paying? How would they be willing to pay?
- one-time payments
- subscription fee, renting, leasing, licencing, usage fee, after sale, brokerage fee,
advertising
- fixed and dynamic pricing
,Revenue streams result from value propositions successfully offered to customers
6. Key resources
Which resources contribute most to the value proposition?
- human, physical, financial, digital, knowhow
Key resources - assets required to offer and deliver the previously described elements by
performing a number of Key activities
# Amazon - warehouse storage
7. Key activities
Which activities contribute most to the value proposition?
- production, marketing, R&D
- problem solving
- platform management
8. Key partnership
Which is the network of partners that allow the fulfillment of the value proposition for our
customers?
Who are they?
Who do they provide?
- access to resources, access to status/legitimacy
- uncertainty reduction
Some activities are outsourced and some resources are acquired outside the enterprise
9. Cost structure
The impact of resources and activities on our costs?
- depending on our value proposition (cost or value driven)
- fixed vs variable costs
- access to different economies of costs (economy of scale, scope, experience)
The business model elements result in the cost structure
BUSINESS MODEL ARCHETYPES
1. Un-bundling
2. Multi-sided
, 3. Long tail
4. Free
5. Open
UN-BUNDLING BUSINESS MODEL
Companies gain a competitive advantage by
- bundling
- unbundling some of the activities
It depends on technological evolution and firm’s position
# Equipment manufacturers, Mobile business, Content providers
