Summary of Main Points
The article entitled “How to get paid twice for everything you do, part 2: Value appropriating innovations” written by Roos (2011) presented main points that focus on business model innovations. The model is more comprehensively evaluated in terms of finding out how business practitioners could create value from determined ways of innovation. As such, the business model was apparently examined through the identified four observable platform choices, to wit: device-centric, service-centric, telco-centric, and aggregate-centric . Concurrently, the author further expounded on the constituent parts of traditional business models; in conjunction with the reported business-ecosystem view of the world.
Roos (2011) have clearly identified parts of the business model in terms of the following dimensions: value proposition (instrumental, intrinsic, and extrinsic); key stakeholder; distribution channel; relationship; and value configuration. Likewise, closely related to the value configuration dimension are three value-creating logistics: value shop, value chain, and value network . The author presented in-depth details of each dimension through provision of contemporary organizations as examples. In addition, previous authoritative works on the given topics were cited as support. For instance, the resources dimension was reported to be further expounded through the five categories of resources, as follows: monetary, physical, relational, organizational, and embodied competence . Likewise, from among the note categories, Roos (2011) identified the framework that could create competitive advantage for organizations. In a tabular presentation, the author presented summarized information on innovations that were evident and had been made possible through modification of one of the reported dimensions. On the other hand, Vila & MacGregor (2010) presented other models and perspectives of business innovation; as well as those written by other scholars on the subject. Value innovation, for one, was noted to be discussed by Kim & Mauborgne (2005) as emphasizing on the ability of organizations to offer products or services with unprecedented value; and which rests of three platforms such as service, product, as well as delivery .
Finally, Roos (2011) described the business ecosystem view of the world through initially identifying rationales for firm’s linkages with other organizations. Among those that were disclosed included the need to take advantage of cost reductions; to access greater resources; for more advanced knowledge; to reduce risks; to comply with regulatory or institutional requirement; and to tap opportunities for gaining higher levels of productivity and operational sustainability . Within the inter-organizational linkages, Roos (2011) also explained three important players which he classified as keystones, dominators, and finally, niche players. A broad universe of types of innovation were aptly presented and illustrated by Vila & MacGregor (2010) as reportedly adapted from Moore (2006).
In sum, Roos (2011) contended that the objective of organizations should be to “part of as many profit pools as possible, not just the single profit pool in which it is currently active” . He also pinpointed some examples of innovativeness that could pave the way for improving effectiveness of an organization’s operational capabilities: (1) those kinds of innovations that provide a perfect fit between demand and the product or service being offered; (2) those innovations that provide opportunities to improve effectiveness of explicitly identified resource-deployment structure; and (3) those types of innovations that have the potentials to reduce coordination cost .
Personal Opinion
The information gained from the article was beneficial to the readers and to business
practitioners in terms of advancing one’s knowledge and theoretical frameworks on business models; particularly on those that pertain to increasing opportunities to gain more profits through establishing linkages with other organizations. There have been a lot of new ideas, particularly those that were expounded regarding business models through the dimensions that were explained. Likewise, concepts on innovation and ways to improve effectiveness were explained with clarity that aided in grasping the needed implications. At first reading, one found it difficult and challenging to grasp the disclosed concepts since one had to imbibe and differentiate one dimension from the other. Readers and business practitioners could appreciate learning this information by slowly being immersed in the concepts. Likewise, readers could try to associate the information to real world applications. As such, it was commendable for the author to provide clear examples of the concepts, dimensions, and innovations that were cited through the use of real and contemporary organizations that have successfully applied these.
In addition, one also appreciated the fact that the author used tabular presentations, charts, and visual illustrations to assist in explaining the concepts and models mentioned. The figures with actual organizations cited as examples helped the readers in understanding through visualizing the concerns and issues being explained. Likewise, the tabular presentation was effective in summarizing and highlighting the examples of innovations with modification of only one dimension, as noted.
Overall, the author had been effective in achieving his goal of presenting ways to appropriate the value created through the identified innovation, which was supposedly explained in part 1 . The ultimate goal, as disclosed, would be to increase profit pools to as much as feasible and viable with a clear directional recommendation through the three flows noted: physical, monetary and informational , as vividly shown through the example of Skyhook Wireless. One therefore realized that when concepts such as business models, dimensions, and innovative opportunities need to be discussed, the use of examples, tables, figures, and charts provided the needed aid for clarity in presentation of the main points. What was initially perceived to be a fairly challenging discourse turned out to be illuminating and enlightening.
References
Kim, C., & Mauborgne, R. (2005). Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston, MA: Harvard Business School Press.
Moore, G. (2006). Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution. Chichester, Uk: Capstone Publishing.
Roos, G. (2011). How to get paid twice for everything you do, part 2: Value appropriating innovations. EMR, 56-61.
Vila, J., & MacGregor, S. (2010). Business Innovation: What it brings. What it takes. Retrieved from IESE Business School - University of Navarra: http://www.iese.edu/research/pdfs/OP-0182-E.pdf
