business value webs. evolution from value chains to value webs
Post on 21-Dec-2015
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TRANSCRIPT
BUSINESS VALUE WEBS
EVOLUTION
FROM VALUE CHAINS TO VALUE WEBS
Web for the WEB
• E- and m- businesses are artfully built by combining a variety of business models
• If the models generate separate revenue streams while sharing the same infrastructure a firm can more efficiently utilize resources and create additional value
Familiar model
• An industry traditionally has been viewed as a series of transactions and relationships among the set of firms
• Value chain
Internet and m- effect
• Linear, orderly set of relationships no longer holds leading to more complex and more broader set of relationships
Leveraging • Common standards• Connectivity• More detailed information about each other• Interacting in real-time
The essence of this effect
Firm spins its value web
Inside the firm
Outside the firm
Enterprise portals
Key mechanisms
Enhancement
add new functionality or improve a product or service that is currently offered
Expansion
add products and services within an existing business
Key mechanisms
Extension
adopt new business models or enter new business
Exit
drop product or service line or exit a business
Evolving an e/m-business
Extend
Expand
Strategy
Exit
Enhance
Quicken.com example
• Leading Internet brand in the aggressively competitive online financial services industry
• Launched in 1995 by its parent, Intuit
Quicken.com evolution
Started as an information aggregator (infomediary): accessed financial services news and information from a number of different information providers and added value
by synthesizing the content
categorizing and packaging information for easy search and retrieval
distribution over the Internet to consumers of financial services information
Mobile services?
Quicken.com evolution
• Objective: expand consumer base
• Action: do not charge consumers
no subscription fees for the services of the infomediary
• Generate revenue trough advertising
We now know that this was not a good model for revenue creation (works, but…)
Quicken.com: the beginning
• Strategy: The more consumers visit Quicken.com, the more valuable the site is to advertisers
1995- Fledgling dotcom established solid initial presence because of well-respected Quicken software brand
Would this advantage last?
Quicken.com: 1996
• Decision: Brand advantage would not last
1996-acquired QuickenInsurance
QuickenInsurance
• Initially operates as an information aggregator
consumers – enter information– compare quotes– fill out an application
QuickenInsurance-1996
• completed applications sent to insurance carrier
• insurance carrier sends them to traditional agents
• traditional agents close the sale
QuickenInsurance-1996-1998
Enhanced services--actions
• enable side-by-side comparison of different insurance products across key policy features
• add insurance calculators
• deepen educational content available on the site
QuickenInsurance-1998
Expanded product line
action:
• add to life insurance products, auto, home and other forms of insurance
Still an aggregator
How to extend this business model?
QuickenInsurance-late 1998
Extend
Sell insurance policies
With this move extended its business model to marketplace
Revenue generated trough transaction fees on completed insurance policy sales
Quicken.com: 1996-1999
Internally developed and launched 3 additional financial services aggregators:QuickenLoan
QuickenRetirement
QuickenInvestmentQuickenLoan soon started to underwrite its own loans and earning transaction fees becoming a marketplace/producer (similar to E-Loan)
Quicken.com: 1996-1999
Integrated its established offline consumer products (Quicken, TurboTax and small business products such as QuickBooks) to tightly link its large and loyal base of offline customers to online business
Objective: increase online business
Quicken.com: 1996-1999
Objective: increase online businessTransactions can be completed online
Self-service?
Launch retail shopping siteSell own software productsSell other consumer products: books, CDs, video
equipment, travel
Quicken.com: 1996-2000From simple aggregator to a vertical portal
Individual businesses within the portal represent a variety of business models:
aggregators
marketplaces
retailers
Note: Some of the businesses generated revenue, and some did not
Quicken.com Extensions
• QuickenBanking
• QuickenInsurance
• QuickenTurboTax
• QuickenBusinessThese businesses also host software applications for use by customers and suppliers and operate as digital infrastructure vertical portals
Revenue from hosting fees, software licensing and maintenance, and systems integration fees
Leveraging
• With each new business model, the company leveraged Quicken.com digital business infrastructure and increased revenue -generating capability of the business
• As a vertical portal able to generate additional referral and advertising fees
Leveraging
• Increased strategic options open to company for future expansions of business model
• Able to protect from competitive threat to any portion of the business
• Adapts and evolves fast
Evolving an e/m-business
Extend
Expand
Strategy
Exit
Enhance
Evolving an e/m-business
Extend
Expand
Strategy
Exit
Enhance
Do the same for
• Software firm Mongoosetech