Seen from this ”traditonalperspective”, strategy is primarly the art ofpositioning a company in the right place on the valuechain – the right business, the right products and market segments and the right value-addedactivities. Like when
Changingenvironment: Global competition, changing markets, and new technologiesareopeningupqualitively new waysofcreatingvalue. Accordingto the authors the traditonalwayoflooking at valuecreation is ”as outmoded as the old assembly line that it resembles and so is the viewofstrategythat goes with it”.
3. The authorsthen stress,if the keytocreatingvalue is to co-produceofferingsthatmobilizecustomers, then the onlytrue source ofcompetetiveadvantageis the abilitytoconceive the entirevalue-creating system and make it work.
Howtoconfigurate?”To exploit these trends, managers must take a number of steps. To begin with, they must reconsider the business potential of their chief assets: the company's knowledge base and its customer base. Then they must reposition or reinvent the company's offerings to create a better fit between the company's competencies and the value-creating activities of its customers. Finally, they need to make new business arrangements and, sometimes, new social and political alliances to make these offerings feasible and efficient.”
Herearesomekeywordsthatwewantyoutobringwithyour from the article by Normann and Ramirez. Somearebold, red and non-bold, butall are still important!
Second Life is a free 3D virtual world where users can socialize, connect and create using free voice and text chat (www.secondlife.com). You can do basically everything in this virtual world as you can do in real life, which for some people doesn’t create any value while for some people it means a second chance to a second life. There exist many companies in this world, both companies that exist even in real life, but also companies made up in this virtual world. Between these companies, second life and the people within it (the avatars) there is a dependence that in itself creates much value. One area in particular that has seen great effectiveness is the educational area where the more “present” users feel in virtual worlds, the greater the effectiveness of training, collaboration, education or presentation (http://www.metanomics.net/show/virtual_worlds_measurable_value_insight_for_enterprise_dr._mitzi_montoya/).
Thispictureexempifies the extensive value system of SL as the article’sauthorshighlight in the article. It gives an illustration ofhow SL works as a platformtocreatevalue and how the companies and private peoplewithin SL contributetothatvalue. Check out the following video that talk about Dell for examplethat has investedmanyresourcesinto SL: http://www.youtube.com/watch?v=fE_6Xv_rEt4&feature=related
Sse value constellation_group8b_2011
WegiveyouFrom ValueChaintoValueConstellation: Designing Interactive Strategy (1993)by Richard Normann and Radael Ramirezin fewer and easierwords<br />Media Management 2011 Group 8b: Charles Florman Lindeberg<br />Instructor: Robin Teigland Karin Rimbäck<br /> Johanna Sjöblom<br /> Carl Waldenor<br />
The TraditionalValueChain<br /><ul><li>Ourtraditionalvayofviewingvaluecreation is based on assumptionsand the modelsof an industrialindustry.
Accordingtothisview, everycompanyoccupies a position on a valuechain. (like an assembly line)(1)</li></ul>1. Norrman, R. & Ramirez, R., "From Value Chain to value Constellation: Designing Interactive Strategy"<br />
ValueConstellation<br />x<br />The TraditionalValueChain<br />ValueConstellation: Co-productionofValue<br /><ul><li>A changingenvironment The traditionalwayoflooking at valuecreation is outof fashion!
Instead, the authors stress that the successfulcompaniestoday (1993) do not just addvalue, theyreinvent it.
WithValueConstellationthe focus of the strategicanalysisshould not be so muchaboutcompany or industry, but the value-creating system itself, withinwhich different economicactors, worktogetherto co-producevalue.</li></li></ul><li>The New LogicofValue<br />Value has becomemoredense. Anyproduct or service is really the resultof a complicated set ofactivities: myriad economictransactions and instituionalarrangementsamongsuppliers and customers, employees. <br />Whatweusuallysee as products and services arereallyfrozenactivities, concretereflectionof the relationships amongactors in a value-creating system.<br />
The New LogicofValue<br />The new logicofvalue presents companieswith3 practical implications;<br />Companies do not reallycompetewithoneanotheranymore. Rather, it is the offeringsthatcompete for the time and attention and moneyofcustomers. <br />As potential offeringsbecomemorecomplex and varied, so do the relationships necessarytoproducethem. A singlecompanyrarelyproduceseverythinganymore. A company’s principal strategic task is therefore the reconfigurationofitsrelationsships and business systems. <br />The onlytrue source ofcompetetiveadvantage is the abilitytoconsider the entirevalue-creating system and make it work.<br />
Realizing New Ideas (ex. IKEA)<br />The truesignificanceofIKEA’s business innovation is NOT the lowprice and the lowcosts. <br />IKEA is abletokeepprices and costs down because it has systematicallyredefined the roles, relationships and organizationalpractices in the furnitureindustry.<br />IKEA has understoodhowcustomerscancreatetheirownvalue and havecreated a business system thatallowsthemto do it better. <br />
Reconfigurating Business Systems<br />Everycompanyarefacedwith a choice: Eitherreconfigureyourbusiness system totakeadvantageof the new logicofvalue OR be reconfiguredby yourmoredynamiccompetitors. <br />Howto?<br />Reconsider the company’sknowledgebase and itscustomerbase<br />Reposition/reinvent the company’soffering<br />Make new business arrangements and sometimes new social and politicalalliances.<br />
Competencies and Customers<br />Onlytwo assets reallymatter in the new logicofvalue;<br />A company’scompetencies– toinvest in an ever-broadeningrangeofknowledgeresources and combinethisknowledgeintoitsofferings<br />A company’scustomers– tokeep a relationshipwithitscustomers and to profit from theirvalue-creatingactivities<br />
KeyWords from Normann & Ramirez<br />Partnership<br />Products/services as frozenactivities<br />Co-productionofvalue<br />Relationship<br />Mobilization<br />Valuecreation<br />Competenciesand Customers<br />Dialogue<br />Constantreconfiguration<br />Forget the traditionalvaluechain<br />
Example: Second Life<br />Value<br />Value<br />Value<br />Avatars<br />Suppliers (RL companies, SL companies)<br />Value<br /><ul><li>The auhtor’sstatement ”A singlecompanyrarelyprovideseverythinganymore” holdstrue for SL where a largeamountofcompanieshelpcreating the extensive value system ofSL(2)
SL offers greateffectiveness in training, collaboration, education and presentation(3)</li></ul>1 Normann, R. & Ramirez, R ”From ValueChaintoValueConstellation:DesigningInterarctiveStrategy”<br />2 http://www.metanomics.net/show/virtual_worlds_measurable_value_insight_for_enterprise_dr._mitzi_montoya/ 2011-01-26<br />