Environment Trends

Only available on StudyMode
  • Download(s) : 142
  • Published : March 8, 2013
Open Document
Text Preview
Competitive Environmental Trends and Business Model
U7a1, DB8004-01
Farris McCrimmon
Capella University


Introduction
A business model consists of four elements that create and deliver value. The four elements are customer value proposition, profit formula, key resources and key processes. . Successful business models generate cycles that are self-reinforcing and over time, make them operate more effectively. Casadesus-Masanell, & Ricart (2011) explain that companies can compete through business models in three ways: They can strengthen their own cycles, block or destroy the cycles of rivals, or build complementarities with rivals' cycles, which results in substitutes mutating into complements. Sony Corporation is the business unit and the parent company of the Sony Group, which has six operating segments in which it conducts business – Consumer Products & Services Group, Professional, Device & Solutions Group , Pictures, Music, Financial Services and Sony Ericsson. Sony Electronics has been a market leader for many years starting with the Betamax in the 1970’s and the Walkman in the 70’s and 80’s. The focus of this paper is to examine if Sony is effective in using its current business model with in its industry. How do the Strategic business units work within the company. What are the current strategies being employed and the resources available to the company? Business Models/Strategy

A business model consists of four elements that create and deliver value. The four elements are customer value proposition, profit formula, key resources and key processes. Each of these elements is interlocked with each other. Customer value proposition is finding a solution to a problem that exists. The profit formula deals how the company creates value for itself and provides it for its customers. The key resources are the assets needed to create the value. Johnson, Christensen, & Kagermann (2008) suggest that there are five instances that would require a business model change: Disruptive innovation, new technology, new job to be done, to fend off low end disrupters and a change in competition. Successful business models generate cycles that are self-reinforcing and over time, make them operate more effectively. Casadesus-Masanell, & Ricart (2011) explain that companies can compete through business models in three ways: They can strengthen their own cycles, block or destroy the cycles of rivals, or build complementarities with rivals' cycles, which results in substitutes mutating into complements. The last way is an effective way to fend off the low end disruptors so that they can affect the price of the market by presenting a scaled down version of the product. Apple would be a great example with the creation of i-Pod. Apple created several sizes and types of iPods from nanos, classic version and the touch versions. A good business model has to be able to sustain its value over time. Govindarajan & Trimble (2011) argue many companies become so focused on executing their business model that they forget that business models can become perishable. According to Casadesus-Masanell, & Ricart (2011) there are 4 threats that a good business model must be able to overcome: imitation, holdup, slack and substitution. Slack is a very important threat because that deals with internal business. Leadership plays an important role in the success of a business and complacency is often a killer amongst businesses that have been successful. Hsieh and Yik(2005) explain that leadership often makes the difference between merely reaching for great opportunities and actually realizing the goal. It is a fact that the greatest strategy can fail miserable if a business does not have the right management team in place. The effects of poor leadership have both short term and long term consequences. In the short term, implementing a strategy with poor leadership burden other leaders within the company with additional tasks....
tracking img