2. Elements of Business Models: Value I

Question 1

What are the 4 contributors to defining value?

Answer 1

1. Identifying stakeholders
2. Prioritising stakeholders
3. Identifying the needs of stakeholders
4. Formulating the value proposition

Question 2

What are the 5 contributors to creating value?

Answer 2

1. Partners
2. Resources
3. Processes
4. Activities
5. Outputs

Question 3

What are the 2 contributors to delivering value?

Answer 3

1. Segments

2. Channels

Question 4

What are the 3 considerations in capturing value?

Answer 4

1. Cost model
2. Revenue model
3. Sharing surplus

Question 5

What are the 3 (Ts) factors that influence value?

Answer 5

1. ‘Tenner’ - financial and non financial factors
2. Tangibility
3. Time

Question 6

What are the 3 main groups of stakeholder?

Answer 6

1. Internal (primary)
2. Connected (primary)
3. External

Question 7

What does Mendelow’s matrix show?

Answer 7

How stakeholders should be treated, based on their level of power/influence and interest

Question 8

What are the 4 categorie’s in Mendelow’s matrix?

Answer 8

1. Make acceptable (high interest, high power)
2. Keep satisfied (low interest, high power)
3. Keep informed (high interest, low power)
4. Minimal effort (low interest, low power)

Question 9

What is an example of a ‘make acceptable’ stakeholder?

Answer 9

Major customers

Question 10

What is an example of a ‘keep satisfied’ stakeholder?

Answer 10

Large institutional shareholder

Question 11

What is an example of a ‘keep informed’ stakeholder?

Answer 11

Lobbyists

Question 12

What 3 elements are considered in Stakeholder Salience theory?

Answer 12

1. Power to influence
2. Legitimacy of relationship
3. Urgency of relationship

Question 13

How are customers usually defined under stakeholder salience theory?

Answer 13

Definitive - high salience

Question 14

What are the 3 categories of low salience?

Answer 14

1. Dormant (only power)
2. Demanding (only urgency)
3. Discretionary (only legitimacy)

Question 15

What are the 3 categories of medium salience?

Answer 15

1. Dangerous (power and urgency, not legitimate e.g. employee)
2. Dominant (power and legitimacy e.g. the board)
3. Dependent (urgency and legitimacy e.g. local residents impacted)

Question 16

Who are the 4 participants that an organisation exists to create value for?

Answer 16

Customers, owners, employees and suppliers

Question 17

What are Drucker’s 5 questions for defining strategy?

Answer 17

1. What is our mission?
2. Who is our customer?
3. What does the customer value?
4. What are our results?
5. What is our plan?

Question 18

Using a network orchestration model, what is the extension of value creation?

Answer 18

Co-creation

Question 19

What are the 3 characteristics (Vs) of big data?

Answer 19

1. Volume
2. Velocity
3. Veracity

Question 20

What are the 3 key uses of big data?

Answer 20

1. Building a more complex picture of competitions
2. Understanding trends in customer behaviour
3. Revealing insight into performance

Question 21

What is customer segmentation?

Answer 21

Dividing a customer base into groups of individuals that are similar in specific ways

Question 22

What are the 3 factors of channel management?

Answer 22

1. Targeted marketing
2. Customisation of products
3. Targeted delivery

Question 23

What are the 2 conflicts in value creation?

Answer 23

Employees want pay vs shareholders want profit

Customers want quality for low price vs company wants higher prices

Question 24

What is the cost model of pricing?

Answer 24

Calculating all associated costs and using that as a basis for price

Question 25

What is the revenue model of pricing?

Answer 25

Considering how revenue will be generated

Question 26

What are the two uses for 'surplus' (profit)?

Answer 26

Dividends to shareholders or re-investment