Archive for January, 2010


A value network analysis can help to manage enterprises in boom times and recession. Value network positioning is important in the time of fat cows, but enterprises also have to assess risk especially in the time of thin cows.

The Slovenian construction industry is a huge value network.  Construction companies grew enormous in past years; contractors and subcontractors had large profits, so banks lent them money at very low interest rates.

A recession creates the opposite situation for value network participants. Now, the Slovenian construction market has a large surplus of dwellings and business buildings, all of which remain untenanted owing to the unfavorable economic climate.

Banks have stopped offering long-term loans to construction and real estate companies. In addition, they are raising interest rates for long-term real-estate loans for such purchases as family homes, flats and semi-detached houses.  Of course, this has reduced the demand for such properties, and, as a result, construction companies have less income and lack the funds to finance future projects.

Construction companies with suitable business models and the right position in value networks are much more likely to weather an economic downturn by their ability to assess all the risks presented by potential projects. I advise all other construction companies, the ones without viable business models and information-laden value networks, to lay down their shovels and shut down their bulldozers. After all, when in a deep hole, remember Rule Number One: Stop Digging.

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Whether yours is a startup company or a going concern, it is necessary to position all parties in the value network business model in order to add value which can then be delivered to customer supply. Based on the information collected, value can be analyzed, and within this network a company’s value share position can be determined.

From this evaluation of the new combined business model and the  analysis of the value network, which is included in the creation of values, a zero point can be determined. This represents a position from which we can  begin to look for different alternatives and simulate some desired states of the business model we would like to achieve.

Only a year ago, Ryanair’s planes landed regularly at the Edvard Rusjan Airport (line Maribor –London) not far away from my home. The Rast company managed the airport but soon ceased to cooperate with the Irish carrier because Ryanair required what Rast considered to be too high a fee for flights to that airport. Rast proposed that Ryanair raise its ticket prices, rather than requiring Rast to pay any compensation, a proposal that was greeted by Ryanair as absurd. All Ryanair flights to the Edvard Rusjan Airport immediately ceased.

Ryanair would still fly the London-Maribor line today if Rast had created a map of the value network, identified the participants in that network and evaluated the importance of the stakeholders by criteria

That analysis would have helped Rast by providing a base for combining stakeholder business models. Moreover, other stakeholders in the region, such as hotels, shops, and restaurants, which would be patronized by Ryanair passengers, would have needed to be involved in the value propositions.

This range of stakeholders also includes other businesses that offer accommodations (apartments and guesthouses), skiing, sport events, cultural events (museums, galleries, and concerts), souvenirs, etc. Rast should have combined the business models of all interested stakeholders with its business model into a new model that would have provided the required very high fee.

The regional community and the Tourist Association of Slovenia should have played a crucial role and could have prevented the loss of Raynair, which transported a few thousand tourists to Slovenia annually.

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The sports recreation complex of Rogla (Unitur) is situated in the middle of the vast Pohorje mountain forest (1500 meter/4500 ft high), just 40 minutes away from Sloveska Bistrica. Tourists can relax and recreate there all year long. Rogla offers a great infrastructure and has an international Petra Majdič, a world-renowned Slovenian female cross-country skier, trains at  Rogla for most of the year, so Unitur has the opportunity to combine its own business model with that of Petra’s. Thanks to her considerable media coverage and her appearance at World Cup competitions throughout Europe, Unitur has gained much more recognition and a considerable number of new customers.

The question is – where can their partnership of business model combining take them in the future? They can find answers in the profiles of potential customers, connected with value propositions. Utilizing these, Unitur and Petra can develop innovative services based on the information gleaned from  social media sites.

Petra could write her story on a blog, on Twitter and on Facebook. She could offer training exercises for different kinds of cross-country skiers and these could connect with her GPS or other devices at Rogla, showing her speed and her heart rate. She could describe rest and relaxation periods using physiotherapy, sauna or other services offered by the Rogla center. She could even combine her business model with that of a medical care company’s, one that offers health advice and assistance.

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In Slovenska Bistrica where I live, a lot of successful athletes are active. Among them are the following Olympians: Shot-put: Miran Vodovnik; Judo: Topolčnik Stanko, Janez Vidmajer, Franc Očko, and Filip Leščak; Paralympics shooter Franc Pinter. In addition, there are many other world-famous athletes such as Mojca Mijovic, triathlon; Alpine skier Rene Melkuz; Eurocup basketball player Sani Becirovic; and mountain climbers Mira Zoric, Milan Romih, Marjan Freser, Francek Knez, and Dani Tic, etc. Each of those presents an interesting life story, one filled with incredible challenges, amazing determination and endurance, and raw courage. All of these athletes were trained in the clubs here that have an illustrious tradition, and that is where their stories all began. Some of these, however, have become part of the lore of our small town, and so, these modest athletes, who while they are talked about, never boast of their achievements, are part of the past and present of our city. Their actions and those stories are one the important aspects that make us different from other cities. Heralding the accomplishments of these renowned athletes could help greatly in making, Slovenska Bistrica much more well-known world-wide. At present, unfortunately, these stories are mainly confined only to Slovenia. How then, can we broadcast these interesting stories combined with tourism information via social media, in order to present the many attractions that we offer to the whole world? I will talk about the topic on my lecture next week.

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Last year, I found an interesting article “Can You Change Everything?,” published on the Seth Godin blog. His words from the west coast of the U.S. inspired me, caused me to start studying English through Skype with my teacher John Slattery and initiated a number of other changes in my daily life.I began to do what I love doing, and I started to connect intensively with people who have opinions similar to mine. Suddenly my life became full of unforgettable encounters and new experiences. What has impressed me the most is the global community, which is producing a world-wide, collective knowledge. I became part of a large network of connections, contacts, reservoirs of awareness and understanding. I attended an unforgettable Business Model Knowledge Fair in Amsterdam and participated in the Business Model Hub by co-creating, as one of more than four hundred and fifty contributors, the book Business Model Generation. In addition, on the topic of Business Model and Social Media, I organized and led several lectures and workshops  and was very heartened by the enthusiastic response.I never defined any of the main objectives but instead spoke spontaneously. In that year of 2009, during which I crossed the threshold, creating goals was not my objective; what I wanted to do was to spread the word to as many people as I could as quickly as possible.  I think I’m on the right track, having sent forth some waves, which will, I hope, now spread out upon the global ocean of knowledge. In the year 2010, I hope to further investigate the many possibilities and manifold connections that Business Models and Value Networks offer. Like an explorer who has discovered a new continent, I am tremendously excited and enraptured by the endless possibilities such an adventure promises.I had an experience very similar to this when I first encountered the monsoon in  Kathmandu in August of 1984. I was entranced by the mystery and enchantment of that exotic land whose strange landscape was drenched in a seemingly never-ending rainfall. When I first discovered Business Models and Value Networks, that feeling of  having come across an enigma, with all the fascination such encounters generate, came upon me again. And as I’ve learned more, that fascination has increased rather then diminishing.

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