Value Configurations Principles for Internet Strategy

V.T. Raja, Ph.D., College of Business Oregon State University

Value Configurations
Source: Chapter 7 of book by Afuah and Tucci

Find

Solve Choose

Evaluate

Execute

Shop

Network

Chain

Value Chain
Source: Michael Porter
Firm Infrastructure Human Resources Management Technology Development Procurement

Inbound Logistics

Operations

Outbound Logistics

Marketing & Sales

Aftersales Service

What is basic premise of value chain?

Value created by transforming inputs into products

Value Shop
Source: Chapter 7 of book by Afuah and Tucci
Firm Infrastructure Human Resources Management Technology Development Procurement Problem Finding & Acquisition Problem Solving Choice Infrastructure Support

Simons Problem Solving Model

Control/ Evaluation Execution

What is basic premise of value shop?

Value created by providing solutions to customer problems

Value Network
Source: Chapter 7 of book by Afuah and Tucci
Firm Infrastructure Human Resources Management Technology Development Procurement Network promotion and contract management Invite and select Service provisioning customers to Establish, Infrastructure join network maintain and operation Initialize, terminate Maintain and manage and links run physical and terminate Billing for information network contracts value received

What is basic premise of value Network?

Value created by providing intermediary services

Combinations of Value Configuration

Find

Solve Choose

Evaluate

Execute

Cisco: solves problems

EBay: auction network

Automobile manufacturers: mass production

Principles for Internet Strategy (Porter) Strategic Positioning

Start with the right goal Deliver a unique value proposition Develop a distinctive value chain configuration Make trade-offs for robust strategy Fit all elements of company to the strategy Maintain continuity of direction