1. The Value Chain Support activities Primary activities Inbound logisticsMaterials receiving, storing, and distribution to manufacturing premises Operations Transforming inputs into finished products. Outbound logisticsStoring and distributing products Marketing and SalesPromotions and sales force ServiceService to maintain or enhance product value Corporate infrastructureSupport of entire value chain, e.g. general management planning, financing, accounting, legal services, government affairs, and QM Human resources managementRecruiting, hiring, training, and development Technology DevelopmentImproving product and manufacturing process ProcurementPurchasing input

3. Crafting the Network Economy Business Model Concept describes the opportunity and strategy Value Measures the benefits to investors and other stakeholders Capabilities define resources needed to execute strategy

5. Crafting the Network Economy Business Model

6. Focused Distributor Business Models Models and Examples Own Inventory Sell Online Price set Online Physical product or service Likely Revenues Likely costs Retailer ToysRus.com Staples.com Yes NoYesProduct/service sales Advertising and marketing; physical facilities; inventory and customer services; R&D; IT infrastructure Marketplace Eloan.com nsweb.com PossibleYesNo Transaction fees; service fees; commissions Advertising and marketing; R&D; IT infrastructure Aggregator Internet Securities No PossiblyReferral fees; advertising and marketing fees Advertising and marketing; R&D; IT infrastructure Exchange ebay.com freemarket.com Possibly YesPossiblyDepends on model Advertising and marketing; staff support for auctions (especially B2B)R&D; IT infrastructure; inventory control; R&D; technical infrastructure.

7. Building the Networked Business  “ABB is an organization with three internal contradictions. We want to be global and local, big and small, radically decentralized with centralized reporting and control. If we resolve those contradictions, we create real competitive advantage”  Percy Barnevik, CEO Asea Brown Boveri (ABB)

8. Enhance Add functionality or features to current product/services offering or improve performance of existing business Extend Enter into a new line of business and/or add new business model Exit Exit a business or market or drop a product/service offering Expand Add new product/service offering or enter new geographic market