Strategy, business model, and organizational alignment
Strategy consists of arenas, vehicles, differentiators, staging, and economic logic and Good strategy is resilient.
Strategy defines the space of possible business models. Business model consist of arena, value proposition, value creation, and value capture and Good business model is aligned with company goals, self-reinforcing, and robust.
How customers make choices and how to create and capture value
Customers select products that offer the best value for money. Value creation happens through Valuable and Supported by Organization resources and the value is superior due to Rare and Difficult to Imitate resources and Value can be also created through the architecture of transactions.
Ability to capture the value depends on the perceived bargaining power.
Gaining, having, and sustaining competitive advantage through dynamic capabilities
Company has competitive advantage due to Valuable, Rare, Difficult to Imitate, and Supported by Organization resources. Because acquiring right resources is usually due to luck, the goal is to build capabilities to identify and exploit opportunities.
Company acquires and sustains the resources providing the competitive advantage through dynamic capabilities. Dynamic capabilities adjust resources by integration, reconfiguration, and gain and release. The usage of the dynamic capabilities depends on managers, which are responsible for sensing opportunities and threats, and exploiting & renewing resources.
Competition and its asymmetry, competitive behaviour, disruptive innovation, and competitor analysis
Competitors are companies that share the same markets and resources but Competition can be asymmetric in the cost of competing or being a competitor in the first place.
Competitive behaviour is driven by awareness, motivation, and capability and The reaction to the competitive pressure depends on entry costs. The velocity of competitors’ reaction depends on how the company frames competitive behaviour in announcements.
Competitor analysis allow companies to avoid surprises, anticipate competitors’ moves, and respond to those moves quicker. It also allows to craft better strategies as well it is a great learning exercise to learn from other companies. Good competitor analysis is critical.
Digitalization and its impact on company boundaries
The first wave of digitalization was about improving products with digital technology and gathering analytics on product usage. The second wave of digitalization was about designing organizational boundaries and structures to digital technology and exchange usage data with other companies to develop products across company boundaries.
Companies should set their boundaries to optimize cost of owning a resource vs transaction costs. The traditional boundaries shifted significantly due to digitalization as Digitalization decreases transaction costs reshaping boundaries of companies allowing to operate with little ownership, be more focused, and access to high quality resources.
It also means that In digital transformation, companies need to address limitations on true coordination and circular causality and that Digitalization will require companies to develop capability to coordinate across functions and companies.
Business ecosystem
Business ecosystem consists of a customer, complements, and components. In business ecosystems, the success between actor A and B depends on success between actor B and C.
Components influence one other in generic, unique, or supermodular ways, Components influence one other in generic, unique, or supermodular ways, and Components’ and Complements’ influences interfere with each other.