The Global Value Chain (VC) Map is the most versatile tool in business strategy and innovation. The Global VC Map can be used for visually summarizing Michael Porter's Five Forces and Value Chain as well as for managing business performance as in the Kaplan & Norton's Balanced Scorecard. The Global VC Map can also be used for analyzing and designing business (Six Sigma) processes as well as innovative business models.
As a scalable tool, the Global VC map can be used to map the business model of an enterprise, industry/sector, and economy.
GLOBAL VALUE CHAIN MAP: A Template for Mapping Value Chains, Business Models, and Business Performances
1. ITENNE: ENVIRONMENT P: PROCESSES
S: SUPPLIERS/MATERIALS
R: RETAILERS/DISTRIBUTORS/
CHANNELS
O: OUTPUTS (PRODUCT/
SERVICE)
E: EMPLOYEES/KNOWLEDGE
ASSETS/CULTURE
GLOBAL VALUE CHAIN:
OUTCOMES/GOALS
Customer Value Proposition (Job)
Business Value = Revenue/Cost
Customer Value (Experience) =
Customer Delight/Customer Pain
M: MACHINERY/EQUIPMENT/
FACILITY/LOCATION
C: CUSTOMERS/CONSUMERS &
RELATIONSHIPS
GLOBAL VALUE CHAIN MAP: Template for a Business System
Zoomable Elements of a Value Chain or Business Model: “SEMPORCE”
GURUS
Copyright 2010. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
2. ITENNE: ENVIRONMENT/INVESTOR
Revenue (Sales)
Cash Burn Rate
Month of Cash Left
Time to Cash Flow-Breakeven
Contribution Margin
P: PROCESSES
Cycle Time for Pivots/Prototyping/
Versioning/Product Releases
Average Time to First Order
Average Time to Follow-on Order
Customer Feedback/Voice
S: SUPPLIERS/MATERIALS
R: RETAILERS/DISTRIBUTORS/
CHANNELS
Advertising Expenses
Viral Coefficient
O: OUTPUTS (PRODUCT/
SERVICE)
No. of Minimum Viable Products
No. of Prototypes/Releases
Average Size Order
Average Selling Price per Order
Web Page/Site: Total Visits;
Total Page Views
E: EMPLOYEES/KNOWLEDGE
ASSETS/CULTURE
Agile/Lean (‘Small’) Teams
Lessons Learned/Insights
No. of Experiments/Interviews
Effectiveness/Proficiency of
Sale Person
Revenue per Sale Person
GLOBAL VALUE CHAIN
DASHBOARD
OUTCOMES/GOALS:
Customer Value Proposition
Business Value = Revenue/Cost
Customer Value (Experience) =
Customer Delight/Customer Pain
M: MACHINERY/EQUIPMENT/
FACILITY/LOCATION
C: CUSTOMERS/CONSUMERS &
RELATIONSHIPS
No. of Prospects/Registrations
No. of Customers/Referrals
Cost per Acquisition (Paid/Net)
Customer Lifetime Value
Customer Loyalty/Retention:
Net Promoter Score (NPS)
GLOBAL VALUE CHAIN DASHBOARD: Example (Startup)
GURUS
Copyright 2010. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
3. ITENNE: ENVIRONMENT/INVESTOR
ATTRACTIVENESS
NEW ENTRANTS – Entry Barriers/Moves
Segments; scale; Brand identity;
Capital; Switching cost; Distr.; Gov Policy
COMPETITORS – Exit Barriers/Moves
Segments; Growth; Fixed costs, etc.
P: PROCESSES ATTRACTIVENESS
• Strategic/Branding/HR Management
• Operational/Technology Management
• Procurement/Marketing-Sales/Finance
• Design/Inbound & Outbound Logistics
• Core Competencies/Co-creation
S: SUPPLIERS/MATERIALS
ATTRACTIVENESS
Segments: Trade-offs; Switching cost
Volume; Differentiation of inputs
Presence of substitute inputs
Threat of forward/backward linkages
Cost relative to purchase in industry
R: RETAILERS/DISTRIBUTORS/
CHANNELS ATTRACTIVENESS
O: OUTPUTS (PRODUCT/
SERVICE) ATTRACTIVENESS
Segments: Trade-offs; Switching costs
Function; Relative price perf. of
substitute product/service; Margins
Propensity for substitute product/
service; Experience factors; Scalability
E: EMPLOYEES/KNOWLEDGE
ASSETS/CULTURE ATTRACTIVENESS
GLOBAL VALUE CHAIN
ATTRACTIVENESS:
OUTCOMES/GOALS
Customer Value Proposition (Job)
Business Value = Revenue/Cost
Customer Value (Experience) =
Customer Delight/Customer Pain
M: MACHINERY/EQUIPMENT/
FACILITY ATTRACTIVENESS
C: CUSTOMERS/CONSUMERS &
RELATIONSHIPS ATTRACTIVENESS
Segments: Trade-offs; Switching costs
Volume; Input; Incentives; Linkages
Substitute products; Prod. differences
Information; Quality/Perf./Access
Price sensitivity; Price/Total Purchase
GURUS
Copyright 2010. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
GLOBAL VALUE CHAIN ATTRACTIVENESS
Competitive Advantage Factors at Level of Enterprise, Sector, and Industry
4. HYPOTHESES PROBLEMS/
PAIN
(WEAKNESS-
ES/THREATS)
GOALS/Objectives/
Strategies/Tactics/
Initiatives/
Projects
Key Metrics/
Performance
Indicators/
Targets
Business Experiences (Impacts)
Description of BUSINESS/
GLOBAL VALUE CHAIN
Delight
(Revenue)
Pain
(Cost)
S: Suppliers
E: Employees/
Knowledge Assets
M: Machinery/
Infrastructure
P: Processes
O: Outputs
(Product/Service)
R: Retailers/
Distributors/
Channels
C: Consumers/
Customers
E: Environment
VALUE CHAIN
(“SEMPORCE”)
BUSINESS
ECOSYSTEM
Customer Value Proposition (Job To Be Done): BUSINESS VALUE
(PROFIT MARGIN)
GURUS
Mission/Vision: …………………….…………………………………………………. Market Segment (Customer Problem/Goal): ……………………….….…
BUSINESS MODEL PLAN: Template
Collaboratively Design Oh My God-Vision, Strategies, Products, Services, and Business Models
Copyright 2010. Dr. Rod King. rodkuhnking@sbcglobal.net & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing
Editor's Notes
BIBLIOGRAPHY
Blank, S.G. (2007) The Four Steps to the Epiphany. USA.
http://steveblank.com/2010/02/22/no-accounting-for-startups/
BIBLIOGRAPHY
Barnes, D. (Ed.) (2001) Understanding Business. London: Routledge.
Brache, A.P. (2002) How Organizations Work. New York: John Wiley & Sons
Hamel, G.; Prahalad, C.K. (1996). Competing for the Future. Boston: Harvard Business School (HBS) Press.
Merrifeld, R. (2009) Re-think. New Jersey: Pearson Education, Inc.
Poirier, C.C. (20030 Using Models to Improve the Supply Chain. Florida: St. Lucie Press
Porter, M.E. (1998) Competitive Advantage. New York: The Free Press.
Porter, M.E. (1998) Competitive Strategy. New York: The Free Press.
Porter, M.E. (2008) On Competition. Boston: Harvard Business School (HBS) Press.
Rummler, G.; Brache, A. (1995) Improving Performance. San Francisco: Jossey-Bass.
BIBLIOGRAPHY
Christensen, C. (2003) The Innovator’s Dilemma. Boston: Harvard Business School (HBS) Press.
Christensen, C. (2003) The Innovator’s Solution. Boston: Harvard Business School (HBS) Press.
Iansiti, M.; Levien, R. (2004) The Keystone Advantage. Boston: Harvard Business School (HBS) Press.
Kaplan, R.S.; Norton, D.P. (1998) The Balanced Scorecard. Boston: Harvard Business School (HBS) Press.
Kaplan, R.S.; Norton, D.P. (2004) Strategy Maps. Boston: Harvard Business School (HBS) Press.
Kaplan, R.S.; Norton, D.P. (2008) The Execution Premium. Boston: Harvard Business School (HBS) Press.
Porter, M.E. (1998) Competitive Advantage. New York: The Free Press.
Porter, M.E. (1998) Competitive Strategy. New York: The Free Press.
Porter, M.E. (2008) On Competition. Boston: Harvard Business School (HBS) Press.
Wikipedia. Pleasure Principle. http://en.wikipedia.org/wiki/Pleasure_principle_(psychology)
Wikipedia. TRIZ. http://en.wikipedia.org/wiki/TRIZ