BUSI690 Rothaermel Ex 1
Rothaermal Exercise 1
Ryan Cherry
BUSI 690 – Policy and Strategy in Global Competition
January 18, 2015
Chapter 1
Discussion Question 1.1: How is a strategy different from a business model? How is it similar?
Strategy refers to an organization’s “overall efforts to gain and sustain competitive advantage” (Rothaermel, 2013, p. 9). An organization’s business model, on the other hand, “details the [organization’s] competitive tactics and initiatives”, which includes the steps necessary to put the organization’s strategy into action (Rothaermel, 2013, p. 11). The strategy is the theory of how the organization will make money, while the business model is the action necessary to achieve the theoretical strategy (Rothaermel, 2013). While the two terms are different, they are alike in that they both are involved in the planning phase of an organization’s life-cycle (Rothaermel, 2013). The organization creates the strategy, and then creates the business model to achieve that strategy (Rothaermel, 2013).
Discussion Question 1.2: Why do you think Dell is keen on offering this service? What other firms use this crowdsourcing technique? Where else might this type of business model show up in the future?
Crowdsourcing refers to “a process in which a group of people voluntarily perform tasks that were traditionally being completed by a firm’s employees” (Rothaermel, 2013, p. 17). Dell is likely keen on offering the service because it provides a vast array of new options for its consumers while incurring minimal new costs. The costs for the partnership with Threadless, and for actually etching the designs, are passed to the consumer through the additional fee. Dell is able to avoid hiring design personnel to create new cover art, while offering numerous new design options for its customers (Rothaermel, 2013).
Netflix, and Frito-Lay are a couple of examples of other firms utilizing crowdsourcing techniques to improve business and develop a greater competitive
Ryan Cherry
BUSI 690 – Policy and Strategy in Global Competition
January 18, 2015
Chapter 1
Discussion Question 1.1: How is a strategy different from a business model? How is it similar?
Strategy refers to an organization’s “overall efforts to gain and sustain competitive advantage” (Rothaermel, 2013, p. 9). An organization’s business model, on the other hand, “details the [organization’s] competitive tactics and initiatives”, which includes the steps necessary to put the organization’s strategy into action (Rothaermel, 2013, p. 11). The strategy is the theory of how the organization will make money, while the business model is the action necessary to achieve the theoretical strategy (Rothaermel, 2013). While the two terms are different, they are alike in that they both are involved in the planning phase of an organization’s life-cycle (Rothaermel, 2013). The organization creates the strategy, and then creates the business model to achieve that strategy (Rothaermel, 2013).
Discussion Question 1.2: Why do you think Dell is keen on offering this service? What other firms use this crowdsourcing technique? Where else might this type of business model show up in the future?
Crowdsourcing refers to “a process in which a group of people voluntarily perform tasks that were traditionally being completed by a firm’s employees” (Rothaermel, 2013, p. 17). Dell is likely keen on offering the service because it provides a vast array of new options for its consumers while incurring minimal new costs. The costs for the partnership with Threadless, and for actually etching the designs, are passed to the consumer through the additional fee. Dell is able to avoid hiring design personnel to create new cover art, while offering numerous new design options for its customers (Rothaermel, 2013).
Netflix, and Frito-Lay are a couple of examples of other firms utilizing crowdsourcing techniques to improve business and develop a greater competitive
References: Rosenbloom, R. S. (2000). Leadership, capabilities, and technological change: The transformation of NCR in the electronic era. Strategic Management Journal, 21(10/11), 1083-1103. Retreived from http://www.jstor.org/stable/3094428 Rothaermel, F. T. (2013). Strategic Management. New York: McGraw-Hill/Irwin. Shepherd, H. (2012). Crowdsourcing. Contexts, 11(2), 10-11. Retreived from http://dx.doi.org/10.1177/1536504212446453