The impact of SIS on firm’s Business Models II

1. The impact of SIS on firm’s Business Models II

2. The impact of SIS on the Pillars of the Business Model ISI impact on the value innovation

3. Value Propositions Value Propositions describes what creates value for a targeted Customer Segment. • Cost reduction • Risk reduction • Accessibility • Convenience • Usability • Newness • Performance • Customization • “Getting the job done” • Brand / Status • Design

4. Co-creation Extended Enterprise Focus on expanding the pie Traditional Relationship Focus on splitting the pie Value to Customer Value to Customer Value to Supplier Value to Supplier Source: J.H. Dyer, Collaborative Advantages

5. Customer value co-creation

6. Co-creation • Co-creation relates to the value received by the customer through usage, consumption or experience. (Lusch & Vargo 2006). • Occurs whenever consumers interact with companies or products and thereby have an active role in the shaping of their experience and ultimately value perception.

7. Co-creation of Value • Co-creation between firms and customers, as well as production and consumption, is about tapping successfully into the collective intelligence of consumers. • Co-creation is an active, creative and social process

8. Co-creation is important because it is: 1. Creative: co-creation is a form of collaborative creativity, that’s initiated by firms to enable innovation with, rather than simply for their customers. 2. A rich mix: co-creation draws on a combination of management and marketing approaches, the psychoanalytic tradition, and processes related to innovation, knowledge and group decision-making. 3. A facilitated process: co-creation thrives on fantasy, play and creativity, but the role of the facilitator or facilitating organisation is often overlooked.

9. All about relationships: we stress the importance of focusing on the quality of the interactions between people rather than on technologies per se • A learning process: we need to intertwine knowledge and processes in an overall co-creation framework, rather than just enabling co-creativity, if we want to achieve widerorganisational impact. From ‘Co-creation: New pathways to value, An overview’, by Nick Coates, Research Director, Promise, 2009.

11. Connections: interactions between people, such as companiesand customers, not interactionsbetween consumers and products only. • Collaboration, rather than just involvement. • Co-creativity, not simply co-construction or co-production. • Co-creation can be seen as a coming-together of aspects of marketing and management theory, psychology and techniques derived from group decision-making, innovation and knowledge processes.

12. Co-creation in e-communities

13. Complementary Perspective: Communities of Practice • “Communities of practice are groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in this area by interacting on an ongoing basis” (Wenger et al., 2002, p. 4) • Or…unique types of networks in which a shared practice binds members together • Practice: • Includes shared participation in a task, job, or profession, and can extend beyond work to include hobbies, a shared passion about a topic, or a common set of concerns (Brown & Duguid, 2000, 2001).

14. E-communauties

15. Virtual communities • Building virtual Communities • Internet ideal for gathering people with similar ideas/tasks (communities). • Communities form at web sites in chat rooms, bulletin boards, and distributed e-mail lists. • If a firm builds/maintains the “watering hole” where community gathers, can build relationship with them.

16. Exemplar Blog/Brand Communities • Nike Blog • The Art of Speed • Red Hat Blog [http://blogs.redhat.com/] • Road show and executive blogs • Channel 9 - Microsoft [http://channel9.msdn.com/] • Microsoft employees and developers talking, learning, and listening globally. • General Motors Blogs [http://smallblock.gmblogs.com/] • Community for small block enthusiasts • Google Blog • Insight into the news, technology, and culture of Google.

17. virtuels avatars

18. Social Media

19. What is Social Media? Does it take the place of “in person” networking or meetings? Social media consists of online marketing with photos, video, podcasts, audio, chat rooms, discussions, blogs, surveys, etc. All of these help engage conversation and allows your message to go “viral” on social networks such as Facebook, Twitter, Linkedin, Plaxo, YouTube, Flicker, StumbleUpon, Digg, and so many others. Traditional marketing does not allow for interaction or participation towards content or creation. Social media supplements “in person” networking or meetings, but does not replace it.

20. Study: Collective action in an electronic NoP • Social capital (SC): • A theory that provides a link b/w social structure and action • Def’n: “Social relations that are accessed or mobilized for purposive action” (Lin, 2001, p. 29) • Wasko and Faraj (2005) hypothesize that social capital positively influences individual knowledge contributions to an electronic NoP • Sample: Members of a U.S. legal professional association using an electronic message board • Structural capital operationalized as centrality based on messages posted to a discussion thread • Results: A user’s network centrality predicted volume of contributions

21. Also, Networks of Practice…

22. Conceptual Similarities between Networks, CoPs/NoPs, and SC • Cohen and Prusak (2001) describe networks and communities as “the source and shape of social capital in organizations, the primary manifestation of cooperative connections between people” (p. 55). • Community and social capital constructs are “conceptual cousins” (Putnam, 2000, p. 21). • Mutual engagement in a CoP “identifies a condition that is similar to connection in a network but describes such relations as grounded in common interest and activity, rather than mere interaction” (Iverson and McPhee, 2002, p. 262).

23. Systems for Collaboration and Teamwork • Social business • Use of social networking platforms, internal and external • Engage employees, customers, and suppliers • Goal is to deepen interactions and expedite information sharing • “Conversations” • Requires information transparency • Driving the exchange of information without intervention from executives or others

24. Value Chain to Identify potential co-production and co-creation

25. The Web-DRIVEN SUPPLY CHAIN The web-driven supply chain operates like a digital logistics nervous system. It provides multidirectional communication among firms, networks of firms, and e-marketplaces so that entire networks of supply chain partners can immediately adjust inventories, orders, and capacities.

26. What is Value Chain? • Represents how a business creates customer value by examining contributions of different internal activities to that value • Divides a business into a set of activities within the business • Starts with inputs a firm receives • Finishes with firm’s products or services and after-sales service to customers • Allows for better identification of a firm’s strengths and weaknesses since the business is viewed as a process

27. Porter’s value chain. The key to intra-business e-commerce is improving value chain efficiency.

28. Supplier Channel Buyer Value Network • Set of inter-organizational links and relationships that are necessary to create and sell a product or service. FIRM

29. Value Network The Value Chain • The value chain is the string of activities that moves a product from the raw material stage, through manufacturing and distribution, and ultimately to the end user. • By studying a product’s or service’s value chain, an organization can identify ways to create additional value and assess whether it has the means to do so. • Value chain analysis is also helpful in identifying opportunities for new businesses and in understanding how business models emerge. Aftermarket New vehicle development Supply chain Distribution Channel The basic value chain for new vehicles

30. Identifying collaboration Opportunities through Linking the Value Chains of the Firm and its partners: 1 Service & technical support Sales Distribution Inventory holding Manufacturing Design Engineering Inventory holding Purchasing 5 2 3 4 Distribution Marketing Canning Processing Inventory holding Purchasing Supplies of steel & aluminum

31. Identifying collaboration Opportunities through Linking the Value Chains of the Firm and its partners: 1 Service & technical support Sales Distribution Inventory holding Manufacturing Design Engineering Inventory holding Purchasing 5 2 3 4 Distribution Marketing Canning Processing Inventory holding Purchasing Supplies of steel & aluminum

32. Example • Value chain for a traditional furniture manufacturer. [All or most steps completed by the same company] Assembly Parts Design Ship and warehouse Sell – retail or catalogue Delivery

33. Example IKEA value chain. Design Ship and warehouse Sell – retail or catalogue Outsource to customer Delivery Assembly Parts Outsource to contract mfg. Outsource to customer The IKEA vision is to create a better everyday life for people. We make this possible by offering a wide range of well –designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. IKEA advantages: no manufacturing, assembly or delivery facilities = cost savings . Focus instead on core competencies: design, purchasing, and distribution that give it a competitive advantage.

34. From “Bow-Tie” to “Diamond” Building stronger partnerships through multiple linkages Traditional buyer/supplier interface Supplier Development Key-account selling Buyer Sales R & D Marketing Marketing R & D Operations Production Production Operations Business Development Business development Marketing Marketing Supply chain Supply chain Supply chain Supply chain Customer Supplier Customer Supplier

35. Intermediary Customer Supplier Complementor The role of supplier and customer collaboration Manufacturing Collaboration • Design for localisation • Scheduling synchronisation • Design anywhere build anywhere Customer Collaboration • Joint product definition • Rapid proposal response • Online custom configuration Enterprise SPEED to Margin Product Development Collaboration • Global platform design • Customisable products • Global distributed product development Supplier Collaboration • Joint development • Outsource design • Contract manufacturing Source : Accenture

36. Question What are the main differences between a Value Chain and a value network?