Draway (卓为) Business Models

Learning Objectives Compare and contrast common business models when applied to a business Evaluate intra/entrepreneurial business processes and models

What is a Business Model? A business model is an "abstract representation of an organization, be it conceptual, textual, and/or graphical, of all core interrelated architectural, co-operational, and financial arrangements designed and developed by an organization presently and in the future, as well as all core products and/or services the organization offers, or will offer, based on these arrangements that are needed to achieve its strategic goals and objectives.

4V Business Model Framework Value Proposition Description of the products/services an organization offers Value Architecture Portrays the concept as a holistic structural design of an organization, including its technological architecture, organizational infrastructure, and their configurations Value Network Depicts the cross-company or inter-organization perspective towards the concept Value Finance Depicts information related to costing, pricing methods, and revenue structure Al-Debel and Avison (2010)

What is an Intrapreneur and the Impact of Intrapreneurship on an Organization? Pinchot(1984) defined intrapreneurs as “dreamers who do. Those who take hands-on responsibility for creating innovation of any kind, within a business.“ Antoncic and Hisrich(2001) conclude that intrapreneurship has a positive impact on organizational growth and profitability. Organizations that build structures and embed values to support intrapreneurship are consequently more likely to have a high intrapreneurial orientation and are more likely to grow than organizations with a low intrapreneurial orientation. Intrapreneurial organizations are more innovative, they continually renew and this proactive approach leads to new business venturing.

Case Study: Draway Set up in 2012, a professional information technology service provider. Offering two products. The first one is software outsourcing, that is, helping other companies to develop new functions for their software; The second one is the vehicle networking product, a vehicle fault detector.

Case Study: Draway In their own words: When we first started this company, to avert risks, we adopted only software outsourcing, even without collecting shares. The weaknesses lie in its low gross profit margin and lack of continuity. So we’ve been thinking about developing our own products. In my opinion, starting up a business requires constantly trying new things. Because it’s not a route from 1 to 100, it’s not as clear a model as that in conventional fields, to open one store after another. You have to keep trying until settling on a proper direction and model and then increasing investment in that direction and model. The future trend changes ever-faster, so as an entrepreneur, what we do is to keep finding problems and then solving them. We don’t have much material incentives actually, we depend more on organizational commitment, that everyone is determined to actively undertake their job. Plus, maybe a lot of start-up companies are unable to offer these kinds of material incentives, thus they have to rely on organizational commitment and organizational culture more.

Case Study: Draway Pre-video discussion Can you predict what business model Draway uses? What are the 4V you would expect to see in the business model at Draway? How does Draway build its business model ? How would you predict Draway encourages intrapreneurship?

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Case Study Discussion Questions Map Draway’s business model onto the 4V Framework. Do you think there are any areas on the 4V that Draway has not developed? Any areas that you think fall outside the 4V? Discuss whether the intrapreneurship in Draway can last long without material incentives just depending on organizational commitment. In the long run, what measures would you predict Draway will take to stimulate intrapreneurship?

References Al-Debei, M. M., El-Haddadeh, R., and Avison, D. (2008).”Defining the business model in the new world of digital business.” In Proceedings of the Americas Conference on Information System(AMCIS),Vol. 2008, pp.1-11. Al-Debei, M.M. and Avison, D. (2010 ).”Developing a unified framework of the business model concept.” European Journal of Information Systems.”19(3),359-376.  Pinchot, G.(1984). “Who is the Intrapreneur? In: Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Entrepreneur. “New York: Harper & Row. pp. 28 – 48. Antoncic, B. & Hisrich, R.D., 2001. “Construct Refinement and Cross-Cultural. “Journal of Business Venturing, 16(99), pp.495–527.