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MANAGEMENT INFORMATION SYSTEMS
MANAGEMENT INFORMATION SYSTEMS
How to Design A Winning Business Modelby Ramon Casadesus-Masanell and Joan E. Ricart
Harvard Business Review
Prepare by資訊管理系碩專一
蔡銘祥、廖至仁
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PrefacePreface
Strategy has been the primary building block ofcompetitiveness over the past three decades.
While the convergence of information and communication technologies in the 1990s resulted in a short-lived fascination with Business models.
Deregulation, technological change, globalization and sustainability have rekindled interest in Business Models today.
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What force companies to modify or create business model
What force companies to modify or create business model
Crack open markets in developing countriesThe economic slowdown in the developed worldThe rise of new technology-based and low-cost rivals
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Why Business Model Fail?Why Business Model Fail?
The studies of this paper over the past seven years
Focus on creating innovative and evaluate efficacy in isolationWithout think about the competitionIgnore dynamic elements of business model
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What is a Business Model?What is a Business Model?
Joan Magretta(Management writer) The story that explains how an enterprise works.
Peter Drucker Who is your customer, what does the customer value, and how do you deliver value at an appropriate cost?
Clay Christensen(Harvard Business School) A customer value proposition, a profit formula, key resources, and key processes.
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What is a Business Model?What is a Business Model?
Studies suggest: One component of a business model must be the choices that executives make about how the organization should operate—choices.
Managerial choices have consequences. For instance, pricing affects sales volume which shapes the company’s scale economies and bargaining power.
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Choices
GOVERNANCE
POLICIES
ASSETS
Consequences
RIGID
FLEXIBLE
Business Model
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Ryanair’s Business ModelRyanair’s Business Model
In the 1980s
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How Business Models Generate Virtuous Cycles
How Business Models Generate Virtuous Cycles
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Three Characteristcs ofa Good Business ModelThree Characteristcs ofa Good Business Model
Is it aligned with company goals? The choices made while designing a business model should deliver consequences that enable an organization to achieve its goals. Example:
Is it self-reinforcing? The choices that executives make while creating a business model should complement on another ; there must be internal consistency.
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Three Characteristcs ofa Good Business ModelThree Characteristcs ofa Good Business Model
Is it robust? A good business model should be able to sustain its effectiveness over time by fending off four threats, identified by Pankaj Ghemawat.
Imitation Holdup Slack Substitution
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Competitive Advantageof High-Tech CompaniesCompetitive Advantage
of High-Tech Companies
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Ryanair’s Business ModelRyanair’s Business Model
Now
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Virtuous cycles can onlybe created
by a low-cost, no-frills player?
Virtuous cycles can onlybe created
by a low-cost, no-frills player?
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A differentiatormay also create virtuous cycles.
Example: Irizar
A differentiatormay also create virtuous cycles.
Example: Irizar
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Irizar’s Novel Business ModelIrizar’s Novel Business Model
QUALITYOnly one product for all marketsMost repetitive tasks outsourced
ACCOMPLISHMENTRelatively high product pricesPay scale ratio of just 3:1Some profit (or loss) sharing every year
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Irizar’s Novel Business ModelIrizar’s Novel Business Model
SHARED OWNERSHIPWorkers own assets and contribute financially to join IrizarTeams set their own goals and choose leadersNo bosses, only coordinatorsFlat hierarchy, with only three levelsNo overtime pay
TRUSTDecentralized decision makingShared information and transparency about performanceNo walls inside plants or offices; no assigned parking spacesTenure after three years of probation; no evaluation or firings thereafterNo clocking in and out
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Competing with Business ModelsCompeting with Business Models
To compete with rivals that have similar business models, companies must quickly build rigid consequences so that they can create and capture more value than rivals do.
For instance:
Finland’s dominant retailers: S Group, a consumers’ cooperative, and Kesko which uses entrepreneur retailers to own and operate its stores.
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Compete through business models in three ways
Compete through business models in three ways
Strengthen your virtuous cycle Companies can modify their business models to generate new virtuous cycles that enable them to compete more eff ectively with rivals.
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Compete through business models in three ways
Compete through business models in three ways
Weaken competitors’ cycles Some companies get ahead by using the rigid consequences of their choices to weaken new entrants’ virtuous cycles.
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Compete through business models in three ways
Compete through business models in three ways
Turn competitors into complements Rivals with different business models can also become partners in value creation.
Online Betting Exchange
Only Offer Odds
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Business Models vs.Strategy vs. TacticsBusiness Models vs.Strategy vs. Tactics
Business models: refer to the logic of the company -how it operates and creates and captures value for stakeholders in a competitive marketplace
Strategy: is the plan to create a unique and valuable position involving a distinctive set of activities
Tactics:the residual choices open to a company by virtue of the business model that it employs.
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SummarySummary