• Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
760
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
23
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. CHAPTER 5
    DYNAMICS OF INTERNET BUSINESS MODEL
    Business is not constant, so as its business model, it has a direct impact
    This chapter examines the dynamics of business models
    Who profits from technological change
    Examine several technological change models
    Its implication towards Internet business model
  • 2. WHO PROFITS FROM TECHNOLOGICAL CHANGE
    Business model = strategy for making money
    Understand what it takes to make money from technological change
    Complementary assets model examine.
  • 3. Complementary Assets Model
    Complementary assets = capability/ability/ qualification, that the firm needs to exploit the technology
    (includes brand name, manufacturing, marketing, distribution channel, service, reputation, installed base of products, relationships with clients /suppliers & complementary technologies)
    Imitability = the extent to which the technology can be copied, substituted by competitors.
  • 4. Pg 79. complementary assets model table figure 5.2
    Imitability = the extent to which the technology can be copied, substituted by competitors. E.g. Internet
    I
    II
    High
    Imitability
    III
    IV
    Low
    Freely available/unimportant
    Tightly held & important
    Complementary assets
  • 5. How to use table 5.2
    Implications of the internet
    Internet;easy to imitate, so imitability is high
    Strategic Implications of Complementary Assets Model
    Determining One’s Complementary Assets
  • 6. Strategic Implications of Complementary Assets Model(figure 5.3 pg 81)
    I
    II
    High
    Imitability
    III
    IV
    Low
    Freely available/unimportant
    Tightly held & important
    Complementary assets
  • 7. Determining One’s Complementary Assets
    To determine its complementary assets it must follow these steps:
    Understand the product-market position it occupies or wants to occupies
    Understand its value configuration & determine what capabilities other than technology that are critical
    • Customer value
    • 8. Scope
    • 9. Positioning (firm attains /wants to attain)
  • DEVELOPING THE TECHNOLOGY
    Developing technology is not easy, the inability of a firm to develop products or services using a new technology is often reason why such firm fail to exploit new technology
    Models of technological change provide guidance for developing successful technology
  • 10. MODEL OF TECHNOLOGICAL CHANGE
    5 models of technological change provide guidance for developing successful technology
    Radical versus incremental change
    Architectural innovation
    Disruptive change
    Innovation, value added change
    Technology life cycle
  • 11. 1. Radical versus incremental change
    Type of firm that is likely to exploit a technological change is a function of the type of change
    The change impacts the firm’s product-market position & capabilities
  • 12. 2. Architectural innovation
    A new design that wants to take advantage of the speed of a much faster processor is an architectural innovation & must consider the changes in the linkages between new processor & other components of the computer
    architectural innovation model can help explore the potential impact of the Internet on some industries
  • 13. 3. Disruptive change
    Has 4 characteristics:
    Create new markets by introducing new kind of product or services
    New products/services from new technology cost less than existing products/services from old technology
    Product perform worst at the beginning but catches up & improve itself by fulfilling the needs of consumer
    Technology are difficult to protect using patents
  • 14. Disruptive change model e.g. pg 90 figure 5.5
    Measure of key
    performance Attributes
    A
    Cost
    Improvement over the years
    Meets key performance attributes
    Meets key performance
    attributes
    C
    B
    product
    D
    demand
    0
    6
    1
    2
    3
    4
    5
  • 15. 4. Innovation, value added change
    The value that a firm offers its customers is a function of the firm’s capabilities & collaboration of its suppliers, customers & complementor
    DELL
    VALUE
    ADDED
    CHAIN
    MICROSOFT
    INTEL
    SOFTWARE
    BUNDLE
  • 16. 5. Technology life cycle
    Used as a framework for understanding the evolving competitive landscape following a technological change
    According to the model, technology undergone 3 phase.1.fluid2.transitional
    3. stable
  • 17. Figure 5.7 pg 94, Internet Technology Life Cycle
    GROWTH/
    TRANSITIONAL
    MATURE/
    STABLE
    EMERGING/
    FLUID
    Stable Phase (mature)
    • Product highly define
    • 18. Demand growth
    • 19. Fewer competitors
    • 20. Firm’s strategy is to defend its position in the market, & look for next technology
    Fluid Phase
    • Product & market uncertainty
    • 21. Confusion among producer & customers on products
    • 22. Product quality is low & cost/prices high
    • 23. E.g. auto industry
    Transitional Phase
    • Standardization took place, common standard for producing product emerge
    • 24. Reduce the phase of uncertainty for the product
    • 25. Customer base increase->mass market
    SALES
    Where in the Internet value
    Network do you want to be
  • 26. THE “dotcom” BOOM & BURST
    Should the dotcom bubble & burst have been expected?
    Who wins in a dotcom vs. Brick-and mortar battle?