Posts Tagged ‘value network’

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Yes, we can! We can change the world.

We can change it by designing new solutions for existing problems. We have started by creating a place where we can share ideas and collaborate on innovative tech/biz plans. This is what happens in Tehno potica.

We have been transforming Tehno potica since February, and we have come up with five ideas. In addition, we have strategies to develop those ideas into cutting-edge projects. Bogdan Mlakar will present the first idea, dealing with recycling wastes, next Monday, and afterwards, we will conduct a brainstorming session to expand on his concepts.

Can you join in and help change the world?

Yes, you can!

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Cidade da Copa, 2014 FIFA World Cup.

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Brazil will host the 2014 Soccer FIFA World Cup. When any country hosts a world cup, it’s never just about the game; it’s also a great opportunity for businesses to enhance their profits. Sebrae (Service Brazil for Small and Micro Companies) conducted a survey to investigate opportunities for small enterprises in the service industry. Service companies can combine business models with the World Cup when this event takes place in twelve Brazilian host cities: Rio de Janeiro, Brasilia, Cuiaba, Natal, Recife, Belo Horizonte, Curitiba, Fortaleza, Salvador, Porto Alegre, Manaus; and Sao Paulo. The survey showed that the 2014 Soccer World Cup will have considerable influence on the growth of agribusiness (132 opportunities,) construction (128,) retail (122,) production linked to tourism (117,) wood and furniture (106,) information technology (105,) clothing (65,) tourism (98,) and services (56.)
Sebrae will invest eighty million dollars in business model combining in order to maximize the potential for an optimum outcome.  All of Brazil is in love with soccer, and so I believe that the 2014 FIFA World Cup is sure to be a huge success, both in sport and in business.
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KLEINMACHNOW - DECEMBER 17:  A sign for Intern...

Image by Getty Images via @daylife

eBay is one of the most important players in the field of internet commerce. It strives to maintain a leading position in the global market and does so by having the vision to grow through using business model combining. eBay acquires innovative companies and integrates those business models with the eBay model.  Managers paint the eBay business model canvas with elements from other business models such as Milo, Redlaser, Gsi Commerce, PayPal, and FigCard.

eBay has two kind of target customers: small businesses and individual customers.

It has value propositions for small businesses such as retail stores. First, eBay offers
Gsi service, which helps companies put their inventory online, thereby opening up to potential customers the entire range of their products. In addition, Milo service lets users check the online inventory of thousands of stores while the Redlaser barcode reader permits Smartphone users to scan any item and then comparison shop among many suppliers. Finally, Where service provides local daily deals and creates buying incentives throughout the system by offering coupons and discounts. Milo, Redlaser and Where are great distribution channels to potential customers, especially small businesses, while FigCard and Paypal are great paying service systems.

eBay gives buyers these great services, all of which make shopping so much more convenient, economical and easy. Consumers can have great shopping search experiences with Milo and Redlaser while Where service enables local daily deals. Once a buying decision has been made, PayPal enables dependable, universal payment by phone whereas FigCard allows secure purchases by phone in a shop.

eBay connects businesses and consumers. Small shops and stores gain a great online service for buyers focused on products and location, thereby acquiring important distribution channels to reach many more customers.

With all these advantages, it’s safe to predict that thousands of small shops will combine their business models with the eBay model combo and start to be eBay partners.

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Modern companies such as Zipcar are focusing on customers who need simple, individualized solutions for their temporary transportation needs. They want cost flexibility and a variety of cars for different occasions. There are many potential advantages to both the customer and the supplier when the transaction is based more on subscriptions than on one-time purchases. Modern companies such as  Zipcar want to have a lot of members since that will guarantee them predictable revenue streams. Zipcar subscribers also want to  be able to easily find the cars they hire. They can do so with Google maps, which displays all the locations of Zipcar pick-ups and drop-offs. This convenience makes Google maps the perfect distribution channel for Zipcar offers.  When a customer uses the car, he /she can employ Google maps for navigation and to discover where  the car can be returned once it is no longer needed.

A week ago, I talked with the manager of a medium-sized enterprise from the region where I live. He was very optimistic about the economic trends in Slovenia. He told me that his company has had a substantial increase of orders from abroad. As a result, he expects considerable growth in both income and added value in the future.  However, I think that possibility of growth for his company will need a longer period of time in order to affect the regional economy.

The main reason for this situation is that the company mentioned above is unwilling to collaborate with other local enterprises. Older companies which have old-fashioned opinions like to think they are self-sufficient or they work in limited business networks. Those enterprises don’t want to combine business models with any smaller companys’ business models. They mistakenly believe that they cannot share their companies’ value propositions or share in the value propositions in any other companies from the local region. If a company with an increase of orders starts to combine with the value propositions of the local enterprises, then it can increase incomes for commercial and value network services.

What do larger companies have to do to change this situation?

1. They have to eschew isolation, discard their outmoded ideas, and realize that businesses in today’s world flourish more through collaboration than competition.

2. They have to assess own business models.

3. They have to determine the areas suitable for changes.

4.  They have to determine appropriate scenarios.

5. They have to find possibilities for collaboration with the business models of complementary, local area partners.

6. They have to prepare prototypes of business models combining.

7. They have to implement combined business models collaboration in the involved companies.

Torox

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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