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 Traditional Relationship
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 wider organisational impact.
From ‘Co-creation: New pathways to value, An overview’, by Nick Coates, Research Director, Promise, 2009.

11. Connections: interactions between people, such as companies and customers, not interactions between 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 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 [
Road show and executive blogs
Channel 9 - Microsoft [
Microsoft employees and developers talking, learning, and listening globally.
General Motors Blogs [
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.
Social media should be as engagement along with meeting in person, not in place of.

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…
Key Features
CoP
NoP
Shared Practice
Strength of Ties
Strong
Weak
Spatial Characteristics
Physical copresence
Geographically dispersed (strangers)
Form of Communication
Direct/Face to face
Indirect/Mediated (e.g., listserves, newsletters, conferences)
Reciprocity
High
Low
Coordination
Easy
Difficult
Common NoP = occupational group/profession
NoP made up of a number of CoPs
an organization can be made up of a number of CoPs, some of which cross organizational boundaries
Note: Direct reciprocity can be replaced by generalized reciprocity (trust that some other person in the group will reciprocate your action at some point in the future)

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
Ask students how they use social sites such as Facebook, and if they have ever used these sites for business purposes. How about Twitter?

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.
This graphic illustrates the multidirectional communications within a future supply chain driven by the Internet. Private industrial networks and net marketplaces are discussed in Chapter 10 (E-commerce). Private industrial networks are typically a large firm using an extranet to link to its suppliers and other key business partners. Net marketplaces are digital marketplaces based on Internet technology for many different buyers and sellers.

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

29. New vehicle development
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.
New vehicle development
Supply chain
Distribution Channel
Aftermarket
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
Purchasing 5 2 3 4
Distribution
Marketing
Canning
Processing
Inventory holding
Purchasing
Supplies of steel
& aluminum 36

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
Purchasing 5 2 3 4
Distribution
Marketing
Canning
Processing
Inventory holding
Purchasing
Supplies of steel
& aluminum 36

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

33. Sell – retail or catalogue
Example
IKEA value chain.
Parts
Design
Ship and warehouse
Assembly
Sell – retail or catalogue
Delivery
Outsource to contract mfg.
Outsource to customer
Draw on paperboard sheets
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”
Traditional buyer/supplier interface
Building stronger partnerships through multiple linkages
R & D
Production
Marketing
Supply chain
Sales
Key-account selling
Supplier Development
Buyer
Marketing
R & D
Marketing
Operations
Production
Operations
Business development
Business Development
Marketing
Supply chain
Supply chain
Supply chain
Supplier
Customer
Supplier
Customer

35. The role of supplier and customer collaboration
Intermediary
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
Supplier
Customer
Product Development Collaboration
Global platform design
Customisable products
Global distributed product development
Supplier Collaboration
Joint development
Outsource design
Contract manufacturing
Complementor
Source : Accenture

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