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Strategic Development of Business Models

Strategic Development of Business Models. Implications of the Web 2.0 for creating Value on Internet. M.Sc. Irma Bejarano-González 18.06.2012. Agenda. What is web 2.0 ? What is a business model? The 4C Internet business model typology

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Strategic Development of Business Models

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  1. Strategic Development of Business Models Implications of the Web 2.0 for creating Value on Internet M.Sc. Irma Bejarano-González 18.06.2012

  2. Agenda • What is web 2.0? • What is a business model? • The 4C Internet business model typology • Which are the key factors and sub factors of the Web 2.0 phenomenon? • Which are the most important factors and sub-factors? • Business Case: Wikipedia • Which activities can the existing Internet businesses implement to embrace the Web 2.0? • Which is the degree of importance of the different factor for each of the different business models “4C”? • Conclusion

  3. What is the Web 2.0? The bursting of the dot-com bubble (Web 1.0) in the fall of 2001 People thought “the web was overhyped” Web 2.0 concept born in 2005 by Dale Dougherty of O’Reilly Media 2ndgeneration of the Word Wide Web (Web 2.0): Evolution of the static HTML Web pages dynamic Web. improving the ability for people to collaborate and share information online. Changed the business models of the internet based companies and the way they create value.

  4. What is a Business Model ? • “the story that explains how an enterprise works,” Management writer Joan Magretta • "The answer to the questions: • 1) Who is your customer?, • 2) What does the customer value?, • 3) How do you deliver value at • an appropriate cost?” • , Peter Drucker

  5. The 4C Internet business model typology CONTENT 1) 2) COMMERCE 3) CONTEXT CONNECTION 4)

  6. Which are the key factors and sub factors of the Web 2.0 phenomenon?

  7. 1. Social Networking: • Structures of human on-line interactions • Built in a certain topic aiming to connect friends, or assessments of products and services • 2. Interaction Orientation: • Firm’s ability to manage effectively the rising customer demand for a more intense and authentic dialogue between firm and customer 2.1 Customer Centricity Puts customers central stage and views them as focal pointof the business 2.2 Customer Response Firms’ ability to manage the dialog with tis customers and develop capabilities to react 1.2 Social Trust Product reviews and customer opinion platforms 1.1 Social Identity Users seeking for a sense of belonging 2.3 Interaction Configuration Information is exchange, and with whom and for what reason 2.3 Cooperative value generation Company integrates customers into business transactions as equals 1.3 Virtual word of mouth Informal information transfer between different parties 1.4 Increasing Consumer Power Increase of Firms’ awareness of user opinions Web 2.0 3. User-Added Value: Firms' ability to recognize that there is not only costumers value added, the value comes also from the internet users • 3. Customization and Personalization • Firm’s ability to gives customers what they want, identify users implicit interest and learn what they like 3.4 User-generated content Creation of profiles, whole websites and media such as video and audio files 3.2 User-generated creativity let customers bring creative ideas in the development of products 3.1 Personal Customization Reconfiguring websites according to their needs 3.2 Social Customization Internet business offering specifically customized products to distinct social layers 3.3 Group Customization Whole groups to build and enforce new configurations 3.4 Sources of revenue Enable companies to optimize and broaden their products range and attract new users. 3.3 User-generated Innovation Huge amount of innovation generated in the “open software space"

  8. BUSINESS CASE: MySpace

  9. BUSINESS CASE: Wikipedia

  10. Which are the most important factors and sub-factors? 1st 1 Social Networking 2nd • 1st Virtual word of mouth • 2nd Social identity • 3rd Social trust • 4th Customer Power 2 Interaction Orientation 3rd • 1st Customer centricity • 2nd Customer response • 3rd Interaction • configuration • 4th Cooperative value generation 3 User-added value 4th • 1st User-generated creativity • 2nd User-generated revenue/contact • 3rd User-generated content • 4th User-generated innovation 4 Customization/ Personalization • 1st Personal customization • 2nd Group customization • 3rd Social customization

  11. Which activities can the existing Internet businesses implement to embrace the Web 2.0?

  12. Which is the degree of importance of the different factor for each of the different business models “4C”?

  13. Conclusion

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