Group 8Will Day 40080

Sofia Hjelm 40092Oskar Karlsson 40104

Julie Miller 40078Sarmad Saleem 70408

From Value Chain to Value Constellation: Designing Interactive Strategy

By Normann, R and Ramirez, R

Interactive value

• Strategy is the art of creating value

• Knowledge and Relationships/ Competencies and Customers

• Constantly reinventing value

• Activity based offerings

IKEA – The Wealth of Realizing New Ideas

• Largest furniture retailer in the world – extremely successful• HOW??? IKEA – how it realizes it?• Invent value by integrating their business systems and the different

participants involved– Relationships with customers– Making the visit to IKEA an entertaining one; restaurants, cafes,

day-care facilities• IKEA – they invent value by enabling customers own value creating

activity• Suppliers in more than 50 countries assisted by the IKEA

Engineering unit.• IKEA – center of services, goods and design and not just a link in a

value chain IKEA succeed, Greater value per person, greater profits

IKEA – The Wealth of Realizing New Ideas (2)

Important points to undertake• Value becomes denser (greater information, greater knowledge leads to

innovations)

• Value occurs in complex constellations. Mobilise customers to take advantage of the density and create value for themselves

• Offerings become more complex and varied ,meaning more than a single company is involved. Reconfiguration of its relationships and business systems are critical from a strategic point of view.

• Mobilisation is the key – make the system work! Activities are matched to actors that perform it and the role of the final customer is crucial in deciding failure or success! Dialogue between the customers and competencies are the key.

Danish Pharmacies Case

1. Reconsider business potential of key assets

2. Reposition offerings to create better fit between competencies and value creating activities

3. Make new business arrangements and social/political alliances to make these offerings feasible and efficient

French Concessions: Of Customers and Competencies

• Two French Companies: Compagnie Generale des Euax + Lyonnaise Des Euax Dumez – in the water business

• Using assets to deliver value using core competencies in addition to knowledge + relationships about customers to devise a good fit between competencies and customers and keep that fit current.

• Both these companies have subsidiaries and serve a number of segments apart from the proving drinking water(managing historical monuments, parks gardens, handling funerals etc.)

• Challenge – finding new services as well as serving existing customer base

• Strategy: NEVER SAY NO TO A CUSTOMER

• Allowed them to gain knowledge to give them strong competitive advantage

French Concessions: Of Customers and Competencies (2)

• Points to take away– These corporations have learned to master the design and

management of co-productive offerings

– How to mobilize value chain creation in their customer partners by reconfiguring roles, relationships and structures

– Reinventing value in a dialogue between competencies and customers

Example in the Media industry

Dell reinvented their strategy in order to deliver greater value , which enabled them to keep up with competition

Sources

• www.dell.com

• Normann, R. & Ramírez, R. From Value Chainto Value Constellation: Designing InteractiveStrategy, HBR, 71,4, 1993.