kap 6 primer entrepreneur uka

7/29/2019 Kap 6 Primer Entrepreneur Uka

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AprimerinEntrepreneurship

Prof.Dr.UlrichKaiser

Universityof Zurich

Springsemester 2008


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Chapter6:DevelopinganEffectiveBusinessModel

TableofContents

I. BusinessModels

A. Whatis

aBusiness

Model?

B. TheimportanceofaBusinessModel

C. HowBusinessModelsEmerge

D. Potential Fatal Flaws of Business Models

II. Componentsof

an

Effective

Business

Model

A. Corestrategy

.

C. Partnershipnetwork

D. Customer

interface

Universityof ZurichISU InstituteforStrategyandBusinessEconomics

UlrichKaiser

AprimerinEntrepreneurshipSpringsemester2008

2


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I.BusinessModels

A.What

is

aBusiness

Model?

. ,

resources,structuresitsrelationships,interfaceswithcustomers,and

createsvalue

to

sustain

itself

on

the

basis

of

the

profits

it

earns.

2. Itsimportanttounderstandthatafirmsbusinessmodeltakesitbeyond

itsownboundaries.Almostallfirmspartnerwithotherstomaketheir

us nessmo e swor .

3. Thereisnostandardbusinessmodel,nohardandfastrulesthatdictate

howfirmsinaparticularindustryshouldcompete.

4. Theterm

business

model

innovation

refers

to

initiatives

such

as

that

undertakenbyMichaelDellthatrevolutionizedhowproductsaresoldin

anindustry.


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I.BusinessModels

5. Thedevelopmentofafirmsbusinessmodelfollowsthefeasibility

A.What

is

aBusiness

Model?

ana ysisstageo aunc inganewventure utcomes e oret e

completionofabusinessplan.

a. If afirmhasconductedafeasibilityanalysisandknowsthatithasa

productorservicewithpotential,thebusinessmodelstage

addresseshowtosurrounditwithacorestrate ,a artnershi

model,acustomer

interface,

distinctive

resources,

and

an

approach

tocreatingvaluethatrepresentsaviablebusinessmodel.

b. Atthebusinessmodeldevelopmentstage,itisprematureforanew

venture

to

raise

money,

hire

a

lot

of

employees,

establish

, .

businessmodelinplacebeforeitcanmakeadditionalsubstantive

decisions.

Universityof ZurichISU InstituteforStrategyandBusinessEconomicsUlrichKaiser


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I.BusinessModelsDigression:

Dell

InDellscase,itneedsthecooperationofitssuppliers,shippers,customers,

an manyot erstoma e ts us nessmo e poss e.

Universityof Zurich

ISU InstituteforStrategyandBusinessEconomics

UlrichKaiser


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I.BusinessModelsDigression:

Dell

Universityof Zurich


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I.BusinessModels

1. Havingaclearlyarticulatedbusinessmodelisimportantbecauseitdoes

B.The

Importance

of

aBusiness

Model

thefollowing:

Servesasanongoingextensionoffeasibilityanalysis;

Focusesattentiononhowalltheelementsofabusinessfitto etherandconstitute aworkingwhole;

Describeswhythenetworkofparticipantsneededtomakeabusiness

Articulatesacompanys

core

logic

to

all

stakeholders,

including

the

firmsemployees.

Universityof Zurich


UlrichKaiser


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I.BusinessModels

2. Onceafirmsbusinessmodelisclearlydetermined,theentrepreneur

B.The

Importance

of

aBusiness

Model

shoulddiagramitonpaper(totheextentpossible),examineit,andask

thefollowingquestions:

Doesm businessmodelmakesense?

WillthebusinessesIneedaspartnersparticipate?

IfIcangetpartnerstoparticipate,howmotivatedwilltheybe?AmI

Howabout

my

customers?

Will

it

be

worth

their

time

to

do

business

withmycompany?

,

CanImotivatemypartnersandcustomersatasufficientscaletocover

theoverhead

of

my

business

and

make

aprofit?

How st nctw my us ness e I I msuccess u ,w t eeasy ora

largercompetitortostepinandstealmyidea?

Universityof Zurich


UlrichKaiser


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I.BusinessModels

Iftheanswertoeachofthesequestionsisntsatisfactory,thenthe

B.The

Importance

of

aBusiness

Model

businessmodelshouldberevisedorabandoned.

Ultimatel abusinessmodelisviableonl insofarasthebu er theseller,andthepartnersinvolvedseeitasanappropriatemethodof

sellingaproductorservice.

Universityof Zurich


UlrichKaiser


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I.BusinessModelsC.

How

Business

Models

Emerge

.

toidentifyopportunitiestoenhancetheircompetitivestrategies.

. eva uec a na soexp a ns ow us nessmo e semergean eve op.

a. Thevaluechainisthestringofactivitiesthatmovesaproductfrom

therawmaterialstage,throughmanufacturinganddistribution,and

ultimatelytotheenduser.

Universityof Zurich


UlrichKaiser


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I.BusinessModels

b. B stud in a roductsorservicesvaluechain anor anization

C.How

Business

Models

Emerge

canidentifywaystocreateadditionalvalueandassesswhether

it

has

the

means

to

do

so.

c. Valuechainanalysisisalsohelpfulinidentifyingopportunities

fornewbusinessesandinunderstandinghowbusinessmodels

emerge.

d. Afirmcanbeformedtostrengthenthevaluechainfora

pro uct, owever,on yi avia e usinessmo e can e

createdtosupportit.

Universityof Zurich


UlrichKaiser



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I.BusinessModels

Entre reneurslookatthevaluechainofa roductoraserviceto in oint

C.How

Business

Models

Emerge

wherethevaluechaincanbemademoreeffectiveortospotwhere

additional

value

can

be

added.

Thistypeofanalysismayfocuson

(1) asingleprimaryactivityofthevaluechain(suchasmarketingand

sa es ,

(2) theinterface

between

one

stage

of

the

value

chain

and

another

(such

astheinterfacebetweenoperationsandoutgoinglogistics),or

3 oneo t esupportactivities suc as umanresourcemanagement .


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

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I.BusinessModels

C.How

Business

Models

Emerge


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

13


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I.BusinessModels

D.Potential

Fatal

Flaws

of

Business

Models

beginning:

. .

b. Utterly unsoundeconomics.

Pets.comsportedanunsoundbusinessmodel,andfailed.


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

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Chapter6:DevelopinganEffectiveBusinessModel

TableofContents

I. BusinessModels

A. Whatis

aBusiness

Model?

B. TheimportanceofaBusinessModel

C. HowBusinessModelsEmerge

D. Potential Fatal Flaws of Business Models

II. Componentsof

an

Effective

Business

Model

A. Corestrategy

.

C. Partnershipnetwork

D. Customer

interface


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

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II.Com onentsofanEffectiveBusinessModel

1. Thefirstcom onentofabusinessmodelisthecorestrate which

A.Core

Strategy

describeshowafirmcompetesrelativetoitscompetitors.Thefollowing

are

the

essential

components

of

a

firms

core

strategy.

a. MissionStatement.Afirmsmission,ormissionstatement,describes

whyitexistsandwhatitsbusinessmodelissupposedtoaccomplish.

b. Product/MarketScope.

A

companys

product/market

scope

defines

theproductsandmarketsonwhichitwillconcentrate.


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

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A.CoreStrategy

. .

differentiateitselffromitscompetitorsinsomewaythatis

importantto

its

customers.

If

anew

firms

products

or

services

aren eren rom oseo scompe ors,w ys ou

anyonetrythem?

i. Fromabroadperspective,firmstypicallychooseoneoftwo

genericstrategies(costleadershipordifferentiation)to

positionthemselvesinthemarketplace.

ii. Firmsthathaveacostleadershipstrategystrivetohavethe

lowest costs in the industr relative to com etitors costs

andtypicallyattractcustomersonthatbasis.


UlrichKaiser

Aprimer

in

Entrepreneurship

Springsemester2008

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iii. In contrast firms with a differentiation strate com ete on

A.Core

Strategy

thebasisofprovidinguniqueordifferentproductsand

typically

compete

on

the

basis

of

quality,

service,

, .


UlrichKaiser

Aprimer

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Entrepreneurship

Springsemester2008

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II.Com onentsofanEffectiveBusinessModelA.

Core

Strategy


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Core

Strategy

PrimaryElementsofCoreStrategy

Afirmsmission,ormissionstatement,describeswhyitexistsandwhatitsbusinessmodelissupposedtoaccomplish. For

u Mission

example,SouthwestAirlinesMissionStatementisasfollows:ThemissionofSouthwestAirlinesisdedicationtothehighest

levelofcustomerservicedeliveredwithasenseofwarmth,, , .

Product/MarketScope

Acompanysproduct/marketscopedefinestheproductsandmarketsonwhichitwillconcentrate. Thechoiceofproductshasanimportantimpactonafirmsbusinessmodel.


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Core

Strategy

Itisimportantthatanewventuredifferentiateitselffromitscom etitorsin

Basisofsomewaythatisimportanttoits

customers. Ifanewfirmsproductsorservicesarentdifferentfromthoseofits

competitors,why

should

anyone

try

them?

Firmsoftendifferentiatethemselvesonthe

basisofacostleadershipstrategyoradifferentiationstrategy.


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1. Afirmisnotabletoimplementastrategywithoutresources,sothe

B.Strategic

Resources

resourcesafirmhasaffectsitsbusinessmodelsubstantially.Thetwo

mostimportantstrategicresourcesarediscussedbelow.

a. CoreCompetency.Acorecompetencyisaresourceorcapability

thatservesasasourceofafirmscompetitiveadvantageoverits

.

miniaturization,Dells

competence

in

supply

chain

management,

and3Mscompetenceinmanaginginnovation.

b. StrategicAssets.Strategicassetsareanythingrareandvaluablethat

a

firm

owns.

They

include

plant

and

equipment,

location,

brands,

patents,customerdata,ahighlyqualifiedstaff,anddistinctive

partnerships.


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II.Com onentsofanEffectiveBusinessModelB.

Strategic

Resources

strategicassetstocreateasustainablecompetitiveadvantage.Thisfactor

is

one

to

which

investors

pay

close

attention

when

evaluating

a

business.


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II.Com onentsofanEffectiveBusinessModelB.

Strategic

Resources

ImportanceofStrategicResources

Newventuresultimatelytrytocombinetheircorecompetenciesand

strategicassetstocreateasustainablecompetitiveadvantage.

abusiness.

Asustainablecompetitiveadvantageisachievedbyimplementinga

va uecreat ngstrategyt at sun quean noteasyto m tate.

Thistypeofadvantageisachievablewhenafirmhasstrategic

resourcesandtheabilitytousethem.


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C.Partnership

Network

model.Newventures,inparticular,typicallydonothavetheresources

toperformallthetasksrequiredtomaketheirbusinesseswork,sothey

.

a. Suppliers.Asupplier(oravendor)isacompanythatprovidesparts

orserv ces oano ercompany. mos a rms avesupp ersw o

playavital

roles

in

the

functioning

of

their

business

models.


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b. OtherKeyRelationships.Alongwithitssuppliers,firmspartner

C.Partnership

Network

withothercompaniestomaketheirbusinessmodelswork.

i. There are risks involved in artnershi s articularl if a

singlepartnershipisakeycomponentofafirmsbusiness

model.

ii. Manypartnerships

fall

short

of

meeting

the

expectations

of

theparticipantsforavarietyofreasons.


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II.Com onentsofanEffectiveBusinessModelC.

Partnership

Network


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D.Customer

Interface

PrimaryElementsofCustomerInterface

Tar etMarket

Afirmstargetmarketisthelimitedgroupofindividualsor

businessesthat

it

goes

after

or

tries

to

appeal

to.

The

target

ma e a mse ec sa ec seve y ng oes, om e

strategicassetsitacquirestothepartnershipsitforgestoits

promotionalcampaigns.

Fulfillmentandsupportdescribesthewayafirmsproductoru men an

Supportservicegoestomarketorhowitreachesitscustomers.Italso

referstothechannelsacompanyusesandwhatlevelof

customersupportitprovides. Alltheseissuesimpacttheshape

.

Universityof ZurichISU

Institute

for

Strategy

and

Business

Economics

UlrichKaiser


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D.Customer

Interface

PrimaryElementsofCustomerInterface

PricingStructure

Thethirdelementofacompanyscustomerinterface

isitspricingstructure,atopicthatwillbediscussedin

more e a n ap er . r c ngmo e svary,

dependingon

afirms

target

market

and

its

pricing

philosophy.


Institute

for

Strategy

and

Business

Economics

UlrichKaiser


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II.Com onentsofanEffectiveBusinessModelRecap:

The

Importance

of

Business

Models

BusinessModels

Itisveryusefulforanewventuretolookatitselfinaholisticmanner

andunderstandthatitmustconstructaneffectivebusinessmodel

tobe

successful.

Everyonethatdoesbusinesswithafirm,fromitscustomerstoits

partners,doessoonavoluntarybasis. Asaresult,afirmmust

.

Closeattention

to

each

of

the

primary

elements

of

afirms

business

modelisessentialforanewventuressuccess.


Institute

for

Strategy

and

Business

Economics

UlrichKaiser


32

kap 6 primer entrepreneur uka

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