Value Network Design for Internet. STOF Model

Transcription

1 Value Network Design for Internet STOF Model

2 Outline Business models The STOF view on business models STOF model STOF method Concluding remarks Practical pointers for the case works 2

3 Business models (definitions) The way an organization or a network of organizations intend to create and capture value from technological innovation (Chesbrough & Roosenbloom, 2003) A description of the value a company offers to one or several segments of customers and the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams (Osterwalder & Pigneur, 2002) Representation of a firm s underlying core logic and strategic choices for creating and capturing value within value network (Shafer et al. 2005) An architecture for the product, service and information flows, including a description of the various business actors and their roles, a description of the potential benefits for the various business actors, and a description of the sources of revenues (Timmers, 2000) 3

4 The STOF view towards business models A business model is a blueprint of how a network of cooperating organizations intends to create and capture value from new innovative products or services A business model describes: Service domain: service offering, value proposition and target group Technology domain: technical functionality required to realize the service offering Organization domain: structure of the multi-actor value network and organizational arrangements Financial domain: how revenues, costs and benefits are generated and divided over partners 4

5 STOF Model Market developments Technical developments Changes in legislation 5

6 Service offering 6

7 Critical design issues in service domain 7

8 Technical architecture 8

9 Critical design issues in technology domain 9

10 Organizational arrangements 10

11 Critical design issues in organizational domain 11

12 Financial arrangements 12

13 Critical design issues in financial domain 13

14 Dynamic STOF model 14

15 The STOF method Critical Success Factors (CSFs) Variables for which a high score indicates that a service creates customer and/or network value, thus making the business model viable in the long run (Bouwman et al., 2004) Critical Design Issues (CDIs) Variables with regard to which we can make decisions that may be critical for the viability and feasibility of the business model (Bouwman et al., 2004) 15

16 Step 1: Quick Scan Developing an initial draft of a business model Done by dealing with questions of each domain Service domain: What is the service concept? What is the added value to the customer/end-user? Technology domain: What are the core technologies required by the service concept/value proposition? What are the possibilities and limitations of the technologies? Organization domain: What are the organizations that have to be involved in delivering the service concept? What are the organizational arrangements? What is the value network structure? Finance domain: Does the service yield sufficient revenues for all the parties involved to be compensated for their efforts, costs and risks? 16

17 Step 2: Evaluation based on CSFs The initial business model is evaluated on the basis of eight CSFs (CSFs for customer value, CSFs for network value) Evaluation whether the initial business model is capable of creating value for customers and the value network Output of this step: a program for improving/refining the initial business model CSFs for customer value Compelling Value Proposition Clearly Defined Target Group Unobtrusive Customer Retention Acceptable Quality of Service CSFs for network value Acceptable Profitability Acceptable Risks Sustainable Network Strategy Acceptable Division of Roles 17

18 Step 3: Refining based on CDIs The initial business model is refined by using CDIs Evaluation of CSFs (Step 2) brings up a set of CDIs that need to be addressed Every CSF has related CDIs that have an effect on the particular CSF in some way Steps 2 and 3 are actually together an iterative process: 18

19 Step 3: Refining based on CDIs (example) CSF: Compelling Value Proposition Related CDIs can be found in all of the domains 19

20 Step 4: Robustness check Concerns the assessment of the business model design with sustainability and adaptivity I.e., how far the business model is able to withstand and adapt to changes in the business model environment Core concepts of assessment: Internal validity: is the service doing what it was expected to do? Predictive validity: whether or not what is expected is also actually delivered? Robustness: what is the ability of the service and business model to cope with changes? Adaptability (closely related to robustness): How easily the service and business model can adapt to changes and remain viable and feasible? 20

21 Concluding remarks STOF model is one type of a business model framework Service, Technology, Organization and Finance domains STOF method is a step by step process for implementing the STOF model A structured approach to designing a business model for an idea or concept Value network thinking strongly present behind the approach 21

22 Practical pointers for the case works Quick Scan (Step 1) for the intermediate presentation Utilize the model to a reasonable degree and in the light of your specific case Full analysis maybe not possible in this setting/time frame STOF used, e.g., as a checklist for the areas to be covered STOF workbook as a help Scenario analysis -> several value network configurations - > STOF based analysis, e.g., to one (the best/the most likely) VNC 22