Chapter 2 & 3 Business Models & Strategy

1. Describe the role of Value Creation and Management. "It is to create value for all players on whom it depends, not just its customers."(pg 44) Meaning in order to create value everybody who has any part of the business must be considered. "Value creation includes the industrial era's focus on efficiency, as well as the consumer era's focus on the customer, on quality, and on choice, but it is capacious enough to include all the modern management's other constituents as well." (pg. 42) "Value creation is the animating principle of modern managemnet and its chief responsibility." (pg. 19) Value is defined not by what an organization does but by the customer who buy its goods and services.(pg. 23) You create value by the system of the company, "However simple a task may seem, you need to study it systematical to determine the 'one best way' to do it." An you can never assume the best way to do something is the way it has been done in the past. (pg. 26)

2. What makes a strong Business Model
a. Creates value for all who are involved. (pg.44)
b. Profit because it show that the business model is working (pg. 44)
c. A story of how the enterprise works. (pg.46)
d. A good business model is simple for everyone to understand and it's
revolutionary for its time.
e. represents a better way of living than the alternative.
f. The model explains why and how the organization will be able to pull
together the talent, capital, and suppliers it needs.

3. Key Principles of effective Strategy?
a. Strategic thinking begins with a good business model that describes, as a system, the economic relationships central to fulfilling an organization's particular purpose.(pg. 71)
b. You must think, "How are we going to do better by being different?" (pg. 72)
c. Determine how it is position and configured in relation to those other alternative. IE. They are choices about which customers and markets to serve, what products ans services to offer, and what kinds of value to create. Made well these strategic choices enable and enterprise to out perform its competitors. (pg. 72)
d. You need to put your own stamp on the basic business model. It needs to be different than anybody else otherwise it is repetitive and will ultimately fail because it is identical to somebody else business model.(pg. 74)Find a way to be different. (pg. 82)
e. Preempt competitors and discourage them from entering the market. Make it so that competitors do not want to enter the market, because they know they wouldn't be able to compete with you. (pg. 74)
f. Never fall into the trap of taking customers for granted. (pg. 74)
g. There are two ways to perform: 1) Customers pay higher prices (therefore, less customers) 2) Operate on lower cost (more customers. (pg. 78)
h. Strategic thinking is necessarily interactive; It acknowledge that the world is filled with potential rivals and allies; it allows for competition and cooperation. (pg. 85)
i. Game theory: 1) Every move will evoke a response. Imagine all the players possible moves, then factor in your reaction to theirs. 2) keep your eye on the whole supply chain--and on the value that each players adds to the whole. 3) You have to put yourself in the shoes--and even the minds--of the other players. (pg. 86)
j. As long as your company is not to successful it will succeed. Meaning if it right off the bat is making millions then competition will enter the market a rushing rates. (pg. 88)
k. The competition among existing players, the threat of new entrants, the power of suppliers, the power of customers, and the availability of substitute products. (pg.88)
l. Strategy is the key to achieving missions. (pg. 90)