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2nd CBSM Conference and 8th SKM Symposium2013 (Magdeburg)

Speaker

Prof. Dr. Christoph Rasche

[email protected]

www.management-potsdam.de

Speaker

Andreas Schmidt

[email protected]

www.management-potsdam.de

Corporate Morphing by Means of Business Model CompetenceTrack V: Business Model Innovation

http://www.uni-potsdam.de/db/mpssoe/img/3/skm.jpg

http://www.uni-potsdam.de/db/mpssoe/img/3/skm.jpg

Content

2Magdeburg, 18.09.2013 SKM & CBSM Conference 2013 © by C. Rasche / A. Schmidt

1. Appetizer: Business Models – A New Mantra for Management?

2. Linking Business Model Research to Competence-based Management (Theory)

3. Business Modell Competence as a Source of Profit and Value Creation

4. Corporate Morphing Through Business Models: Portfolio-Strategy Revisited

5. Outlook: Strategizing and Economizing on Business Model Competence

1. Business Models – A New Mantra for Management?Competing for and through Business Models

3Magdeburg, 18.09.2013

SKM & CBSM Conference 2013 © by C. Rasche / A. Schmidt

End productcompetition

Processcompetition

Technologycompetition

Competencecompetition

Human capitalcompetition

Business modelcompetition

Networkcompetition

Complexity ofcompetition

Strategic impact

Quality, service, design advantages

Cost and speediness advantages

Skill roadmaps

War for talent

Value innovation

Shareconomy

Technology roadmaps/ portfolios

Marketing

1. Business Models – A New Mantra for Management?Semantic confusion: Different Business Model Logics in Several Disciplines


Source: Schmidt (forthcoming in 2014)

Content







2. Linking Business Model Research to Competence-based ManagementHow to Co-align Business Models with SBUs and Core Competences?


Source: Rasche & Schmidt (2013)

Strategic business units(1980 – 1990)

Core competences(1990 -2000)

Business models(2000 – now)

Steering logic

Characteristics

Product-/market-combinations

Competence-/taskcombinations

Skill-/process-/value-/margin combinations

Core feature

Market-based viewIndustrial organization

Resource-based viewInstitutional economics

Emergent ‘mesh-up’theories/ presumptions

Theoryfoundation

Markets, customers andcompetitors

Unique hard-, soft-, brain-peopleware deployments

Entrepreneurial blueprintsand profit regimes

Dominantfocus

Superb industry positions/unique value propositions

VRIO-paradigm +asset renewability

Implementation focusand business development

SCAfoundation

Growth, risk, returnadjusted SBU portfolio

Competence share beatsmarket/customer share

Translate competencesinto actions and results

Managerialimplication

Encapsulated talents, lostsynergies, strategy myopia

Strong inside-out impetus(customer alienation?)

Semantic fuzziness andplethora of meanings

Criticism/caveats

Competitive strategyCompetitive advantage

The core competence ofthe corporation

Business ModelCompetition

Breakthroughimpetus

Source: Demil/Lecoq (2010), p. 234, modificated7

Magdeburg, 18.09.2013 SKM & CBSM Conference 2013

© by C. Rasche / A. Schmidt

2. Linking Business Model Research to Competence-based ManagementDynamic Consistency: A Steady Process of Astute Business Model Development

How do fit business models with the logic of dynamic capabilities?

VRIO-Paradigm

Sustainable profits

(Perceived ) Customer Value

Value netArchitecture/Coordination

2. Linking Business Model Research to Competence-based ManagementWanted: A Coherent Concept for Embedding into BMs into General Management

Source: Rasche (2013) 8Magdeburg, 18.09.2013


Hardware Software

Peopleware Brainware

Competence-basedView

Finance-basedView

Market-basedView

Relational-based View

Content







3. Business Modell Competence as a Source of Profit and Value CreationValue Creation Is Key to Business Model Strategies



Low Medium High

Low

Medium

High

Comparative price position

Co

mp

arat

ive

val

ue

po

siti

on

Middle-of-road

Innovation leader

Price breaker

Customer value

• Product quality

• Product design

• 24/7 availability

• Warranties

• Service quality

• Brand image

• Consulting services

• Value for money

• Ease of use

• Sales force skills

• Reputation

• …

Stakeholder value

Value processes

Employee value

Shareholder value

What value position is affordable?

What costposition is

compelling?

Space forOutpacing?

How to avoid obvious value

destruction?

Competing for value and pricecompetences

Content







4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedHow to Create a Parental Advantage (by Means of Business Models)?

12Version 1.0 | 13-11-11

© by Prof. Dr. Christoph Rasche

How to create corporate value?How to create parental advantages?

Corporate

SBU SBU SBU

?

?

?

?

?

What are core areas?

Where and when tocooperate?

What are sound reasons for outsourcing?

What can be sources of newbusinesses alongside the valuechain/system?

Are the SBU'ssoundly defined?

What is the core logicof our portfolio strategy?

Is our portfolio logic

still appropriate?

??

Corecomp.

Corecomp.

Corecomp.

Corecomp.

Corecomp.

Corecomp.

Bus.mod.

Bus.mod.

Bus.mod.

Bus.mod.

Bus.mod.

Bus.mod.

4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedHow to Handle Corporate Business Model Management?

13

Coporate holdingHealthInvest

Clinic holdingMedCare

HospitalsSBU ABC …

Med. CentersABC …

Med. DepartmentABC …

Med. specialty areasABC …

Therapy classesABC …

DRGsABC …

Macro Perspective

Customerportfolio

Competenceportfolio

Resource portfolios(Upstream focus)

Market portfolios(Downstream focus)

Regions (i.e. BRICS) Market targets KSFs, mega trends Core service areas Business development

Customer satisfaction Waiting times Case Mix Patient mix Convenience

Core competences Core technologies Core knowledge Rocket science Therapy innovations

Personnel, HRM Equipment Sourcing partner Supply chain mgmt. Inventory mgmt.

Supply-side excellence Demand-side excellence

Factor market Customer market

Magdeburg, 18.09.2013 SKM & CBSM Conference 2013 © by C. Rasche / A. Schmidt

Retailportfolio

Productportfolio

Componentportfolio

Technologyportfolio

Micro Perspective

4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedBusiness Model Research Highlights the Business and Functional Level

14Magdeburg, 18.09.2013


Corporate Strategy

Business Strategy

Functional Strategy

B C

A

Where to compete?

How to compete?

How to implement?

Source: own illustration

4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedBusiness Model Competences: Grass Root BM-Competence as a Source of Profit

Source: own illustration 15Magdeburg, 18.09.2013


Corporate Strategy

Business Strategy

Functional trategy

B C

A

BM portfolio BM simulation BM replication BM venturing

Development & sustainability Dissection & scaling Consolidation & weight Split and grow

Automation Operational

excellence Exploitation BM value capture

Nurturing and tapping the BM competence of dispersed

micro-units by means of ‘corporate syntegration‘

4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedHow Morph the Strategic Core by Means of Competence Roadmaps?



Anwendung ParkingSolutions

TicketingSolutions

MobileSolutions

NFC, Micro-payment

Problem solutions

Parkingbusiness

Sports &entertainment

Logistics &transport

Infrastructureservices

RetailingFMCG

…

Neues ProduktNeue Dienstleistung

Neuer ProzessNeuer Worklfow

Neues GeschäftsmodellNeue Wertarchitektur

Neue DienstleistungP

Neuer GeschäftszweckNeues Strategiedesign

New productsNew services

New processesNew workflows

New business logicNew value propositions

New technologiesNew key assets

New business missionStrategy innovation

Neue DienstleistungPNew customers, chann.New regions (BRICS)

Inn

ovatio

n

H &Wstart position

Competence Roadmaps forcustomer problems

Competence Roadmaps forkey industries

Competence Roadmaps forbusiness innovation

4. Corporate Morphing Through Business Models: Portfolio-Strategy RevisitedThe Conventional Consulting Logic: IT Resembles an Appendix of Strategy

Quelle: Rasche (2011). 18

Leadershipconsulting

Strategyconsulting

Organizationconsulting

Processconsulting

IT-Consulting

McKinsey, BCG, Bain, Booz, Oliver Wyman

Roland Berger, Bearing Point, IBM consulting

Deloitte, Mummert, SAP, Ernst & Young

Accounting, taxation, legal advice and financial matters

Human resource consulting

Earnings per consultant

Project size

Envision strategiesEnvision strategies Execute conceptsExecute concepts


© by C. Rasche / A. Schmidt

5. Outlook: Strategizing and Economizing on Business Model CompetenceBusiness Model Check in a Nut Shell: The consulting case

21

Degree of competence and knowledge

Degree of capital commitment

Professionalism

Risk, uncertainty, complexity

Cat herding phenomenon

Protection of stockholders

Moral duties and commitments to clients

Degree of market regulation/ competition

Variety of incentive and compensation models

Expert autonomy

Standardization of inputs, processes, otucomes

Organizational slack, agility und anti-fragility

Relational co-value creation

Personalization, individualization, localization

Degree of outsider governance

1

15

2

3

4

5

6

7

8

9

10

11

12

13

14

Features of expert organizations

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

-3 -2 -1 0 +1 +2 +3

Low/few

High/many

Strategyconsulting

BPO-, ERP-consulting


© by C. Rasche / A. SchmidtSource: Rasche (2013)

Content







5. Outlook: Strategizing and Economizing on Business Model CompetenceBusiness Model Check in a Nut Shell: Test yourself!



Strategic market coverage: Where to compete?What are our global ambitions? What about niche occupation? Which product / market segments?

2

Strategic positioning: How to compete and on which core items?What makes us unique? What differentiates us? Quality, price, service, innovation, flexibility, …

3

Strategic timing: When to compete? How identify and seize windows of opportunity?Technology entry, product & market entry? When to drop out of (saturated) markets?

4

Strategic value chain configuration: How to control for cost-efficient value delivery? Make, buy or cooperate? Where to locate value chains and functional units?

5

Strategy implementation: How to execute and achieve financial results? How to allocate scarce resource and budgets? How to control for results? How to use BSCs?

6

Strategic decision making process: How to achieve an approved strategy?What are the decision rules? Which authorities are involved? Which leadership style is dominant?

7

Strategic intent: How to define the relevant market and business model?What are our core aspirations? How define technology, competence and market roadmaps?

1

Strategic performance control: How to meet milestones and project targets?How to transform strategic ambitions into operational excellence?

8

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