TEchNOLOGy TRaNSFER MODEL - Javna agencija

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2 BUSINESS <strong>MODEL</strong>S • Market development options include the pursuit of additional market segments or geographical regions. The development of new markets for the product may be a good strategy if the firm’s core competencies are related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy. • A product development strategy may be appropriate if the firm’s strengths are related to its specific customers rather than to the specific product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share. • Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. In fact, this quadrant of the matrix has been referred to by some as the »suicide cell«. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk. 2.4.8 Human Capital & Corporate Culture This area of a business model deals with the people within an organization and the basic assumptions and beliefs that are shared by members of an organization, that operate unconsciously and define in a basic taken-for-granted fashion an organization’s view of itself and its environment. The following main questions should be considered for your analysis: • How are human resources handled? • What‘s special about our corporate culture? • What‘s the leadership and management style? One way of analyzing the corporate culture of an organization is to reflect on its cultural web. The Cultural Web identifies six interrelated elements that help to make up the »paradigm« - the pattern or model - of the work environment. By analyzing the factors in each, you can begin to see the bigger picture of your culture: what is working, what isn’t working, and what needs to be changed. The six elements are: 1. Stories - The past events and people talked about inside and outside the company. Who and what the company chooses to immortalize says a great deal about what it values, and perceives as great behavior. 2. Rituals and Routines - The daily behavior and actions of people that signal acceptable behavior. This determines what is expected to happen in given situations, and what is valued by management. 3. Symbols - The visual representations of the company including logos, how plush the offices are, and the formal or informal dress codes. 4. Organizational Structure - This includes both the structure defined by the organization chart, and the unwritten lines of power and influence that indicate whose contributions are most valued. 5. Control Systems - The ways that the organization is controlled. These include financial systems, quality systems, and rewards (including the way they are measured and distributed within the organization.) 6. Power Structures - The pockets of real power in the company. This may involve one or two key senior executives, a whole group of executives, or even a department. The key is that these people have the greatest amount of influence on decisions, operations, and strategic direction. 2.4.9 Practical Example In the graph below you can see the current business model of Hugo Boss. The strategic core is highlighted in grey, while all the other major components from the 7-Cs are arranged around the core. Graph 5: The business model of Hugo Boss 23
KNOWLEDGE FOR BUSINESS IN BORDER REGIONS When depicting the business model of your own company try to carefully select only the most important and significant elements, so what you’ll end up with is a final model that fits on one page only. It may happen that one or two components of the 7-Cs are not very significant within your company and therefore not relevant for your final business model. In the case of Hugo Boss for example the area of „human capital and corporate culture“is not represented in its business model. Other components on the other hand side may be so important that two, three or even more aspects go into your business model, just like with the area of customer interface in the case of Hugo Boss. 2.5 Deriving a successful competitive strategy based on a company’s business model There is little doubt that business model innovation can clearly impact the long-term success of a company. CEO surveys show that innovation in business models – how business is done – is rapidly becoming as or more important than product and service innovation as a driver of competitive advantage and growth. So once you have depicted your current business model, you should try to further innovate it by thinking about possible strategic options and their consequences. The most promising fields of innovation are those areas, where your company can leverage conceptional strengths (being different) as well implementation competence (being better). Graph 6: Deriving a successful competitive strategy 2.6 The balanced scorecard model (BSC) Even Sir Winston Churchill, ex-prime minister of Great Britain acknowledged: „However beautiful the strategy, you should occasionally look at the results.” Sir Winston Churchill And he is right. It is not enough to have great strategies and to talk about a lot of different opportunities. At some point you need to get into the implementation, but also monitor the success of your competitive strategy accordingly. The balanced scorecard model is a great tool to do. It is a management system (not a measurement system) that enables companies to clarify their strategies, translate them into action, and provide meaningful feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully developed, the BSC is intended to transform strategic planning from a separate top management exercise into the nerve center of an enterprise. Four main perspectives are taken into consideration: the financial perspective, the internal process perspective, the innovation and learning perspective and the customer perspective. Each perspective comprises individual goals, the corresponding measures including KPIs – key performance indicators and is provided with a certain budget. 24
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TEchNOLOGy TRaNSFER MODEL - Javna agencija

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