Business Definitions and Models as a Way of Expressing a Company’s Overall Product/Service Strategy
Business Definitions and Models as a Way of Expressing a Company’s Overall Product/Service Strategy
Did coming to understand the "business definition" affect decisions as much as Mike DiFranza seems to believe? What do you think were the key ingredients to his doing a success stakeholder analysis and then being able to have this guide real changes to his whole approach in several areas such as product features, who pays for what and how much, business partners, and venture capital strategy?
The first step that Mike DiFranza took to ensure that the approach to defining and executing new business models was to understand the value of their business to the customers. By clearly defining the predetermined value that customers expect to realize from the business, Mike DiFranza could develop a business model was tailored towards the solution of a common problem the organization faced in delivering said value (DiFranza & Newville, 2005). The company, therefore, realized the much better value in deciding how to approach, product feature and even stakeholder input as far as scope for development cost and how said cost is shared.
There are nine core building blocks upon which all businesses rely. These are customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and costs structures. All these building blocks are critical to developing sustainable value-focused business models. For instance having clearly defined resources allows the company to plan better for resource allocation and budget better for overheads. Having a standard cost structure makes for better analysis of key cost factors and even give critical information on measures companies can take to realize cost savings.
4. Also, think about how nowadays business models themselves (not just new technologies or technical processes) are often regarded as a key field for innovation – think Pandora, Google, Uber, etc. The Captivate Networks story certainly speaks to this.
All business strategies are meant to improve on business performance, through clearly defined policies and commitments that are in line with the overall organizational objectives. A company like Uber has been at the forefront to applying such philosophies into its business model (Pisano, 2015). They successfully diversified the groups within an organization by creating an online platform for Uber drivers and customer base. The company then made sure to define the product that they presented to customers. Charging by the mile and even cost sharing between customers made the service a favorite. The focus was on consumer needs and how best to deliver their service. It is in this respect that such a company has seen significant growth (Pisano, 2015).
References
DiFranza, M., & Newville, T. (2005). U.S. Patent Application No. 10/409,740
Pisano, G. (2015). You Need an Innovation Strategy. Harvard Business Review. Retrieved 22 January 2017, from https://hbr.org/2015/06/you-need-an-innovation-strategy
