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BUSINESS VALUE WEBS

BUSINESS VALUE WEBS. EVOLUTION. FROM VALUE CHAINS TO VALUE WEBS. Web for the WEB. E- and m- businesses are artfully built by combining a variety of business models

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BUSINESS VALUE WEBS

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  1. BUSINESS VALUE WEBS

  2. EVOLUTION FROM VALUE CHAINS TO VALUE WEBS

  3. Web for the WEB • E- and m- businesses are artfully built by combining a variety of business models • If the models generate separate revenue streams while sharing the same infrastructure a firm can more efficiently utilize resources and create additional value

  4. Familiar model • An industry traditionally has been viewed as a series of transactions and relationships among the set of firms • Value chain

  5. Internet and m- effect • Linear, orderly set of relationships no longer holds leading to more complex and more broader set of relationships Leveraging • Common standards • Connectivity • More detailed information about each other • Interacting in real-time

  6. The essence of this effect Firm spins its value web Inside the firm Outside the firm Enterprise portals

  7. Key mechanisms Enhancement add new functionality or improve a product or service that is currently offered Expansion add products and services within an existing business

  8. Key mechanisms Extension adopt new business models or enter new business Exit drop product or service line or exit a business

  9. Evolving an e/m-business Strategy Extend Enhance Expand Exit

  10. Quicken.com example • Leading Internet brand in the aggressively competitive online financial services industry • Launched in 1995 by its parent, Intuit

  11. Quicken.com evolution Started as an information aggregator (infomediary): accessed financial services news and information from a number of different information providers and added value by synthesizing the content categorizing and packaging information for easy search and retrieval distribution over the Internet to consumers of financial services information Mobile services?

  12. Quicken.com evolution • Objective: expand consumer base • Action: do not charge consumers no subscription fees for the services of the infomediary • Generate revenue trough advertising We now know that this was not a good model for revenue creation (works, but…)

  13. Quicken.com: the beginning • Strategy: The more consumers visit Quicken.com, the more valuable the site is to advertisers 1995- Fledgling dotcom established solid initial presence because of well-respected Quicken software brand Would this advantage last?

  14. Quicken.com: 1996 • Decision: Brand advantage would not last 1996-acquired QuickenInsurance

  15. QuickenInsurance • Initially operates as an information aggregator consumers • enter information • compare quotes • fill out an application

  16. QuickenInsurance-1996 • completed applications sent to insurance carrier • insurance carrier sends them to traditional agents • traditional agents close the sale

  17. QuickenInsurance-1996-1998 Enhanced services--actions • enable side-by-side comparison of different insurance products across key policy features • add insurance calculators • deepen educational content available on the site

  18. QuickenInsurance-1998 Expanded product line action: • add to life insurance products, auto, home and other forms of insurance Still an aggregator How to extend this business model?

  19. QuickenInsurance-late 1998 Extend Sell insurance policies With this move extended its business model to marketplace Revenue generated trough transaction fees on completed insurance policy sales

  20. Quicken.com: 1996-1999 Internally developed and launched 3 additional financial services aggregators: QuickenLoan QuickenRetirement QuickenInvestment QuickenLoan soon started to underwrite its own loans and earning transaction fees becoming a marketplace/producer (similar to E-Loan)

  21. Quicken.com: 1996-1999 Integrated its established offline consumer products (Quicken, TurboTax and small business products such as QuickBooks) to tightly link its large and loyal base of offline customers to online business Objective: increase online business

  22. Quicken.com: 1996-1999 Objective: increase online business Transactions can be completed online Self-service? Launch retail shopping site Sell own software products Sell other consumer products: books, CDs, video equipment, travel

  23. Quicken.com: 1996-2000From simple aggregator to a vertical portal Individual businesses within the portal represent a variety of business models: aggregators marketplaces retailers Note: Some of the businesses generated revenue, and some did not

  24. Quicken.com Extensions • QuickenBanking • QuickenInsurance • QuickenTurboTax • QuickenBusiness These businesses also host software applications for use by customers and suppliers and operate as digital infrastructure vertical portals Revenue from hosting fees, software licensing and maintenance, and systems integration fees

  25. Leveraging • With each new business model, the company leveraged Quicken.com digital business infrastructure and increased revenue -generating capability of the business • As a vertical portal able to generate additional referral and advertising fees

  26. Leveraging • Increased strategic options open to company for future expansions of business model • Able to protect from competitive threat to any portion of the business • Adapts and evolves fast

  27. Evolving an e/m-business Strategy Extend Enhance Expand Exit

  28. www.quicken.comPlease take guided tour

  29. Evolving an e/m-business Strategy Extend Enhance Expand Exit

  30. Do the same for • Software firm Mongoosetech

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