Value Creation →

The Value Potential of New Business Models

A business model determines the opportunity’s value creation potential and suggests how the resulting value might be distributed among participants pursuing that model. Strategists need to understand the interaction of elements of the job to be done and asset configuration in order to create differing strategic prescriptions.

Can Miguel McKelvey Build the ‘Culture Operating System’ at WeWork?

How deeply does the culture of a startup matter? Can it be shaped? Professor Jeffrey Rayport discusses WeWork cofounder Miguel McKelvey’s innovative role in building a company culture to support rapid growth. Open for comment; 0 Comments.

How Companies Can Increase Market Rewards for Sustainability Efforts

There is a connection between public sentiment about a company and how the market rewards its corporate social performance, according to George Serafeim. Is your company undervalued? Open for comment; 0 Comments.

The Cross Section of Bank Value

How do commercial banks create value? This paper represents the first attempt to empirically identify the primary determinants of cross-sectional variation in bank value. Among the findings: A bank's ability to produce deposits is by far the most important determinant in explaining cross-sectional variation in bank value.

The ‘IKEA Effect’: When Labor Leads to Love

Companies increasingly involve customers in the design and assembly of products, from Converse allowing customers to design their own shoes to IKEA asking customers to assemble their own furniture. In this paper researchers Michael I. Norton (Harvard Business School), Daniel Mochon (University of California at San Diego), and Dan Ariely (Duke) use the "IKEA Effect" to explain the increase in valuation we place on products we build ourselves. The researchers discuss the implications of the IKEA Effect for marketing managers and organizations more generally. Key concepts include: Successful assembly of products—no matter how amateurish—leads consumers to value them over and above the value that arises from merely purchasing a product. Labor increases valuation of completed products not just for consumers who profess an interest in "do-it-yourself" projects, but even for those who express a preference for buying preassembled products. Successful completion is an essential component for the link between labor and liking to emerge; participants who were not permitted to finish their creations did not show an increase in willingness-to-pay. The marketing challenge lies in convincing consumers to engage in the kinds of labor that will lead them to value products more highly, especially given their general aversion to such pursuits. The overvaluation that occurs as a result of the IKEA Effect has implications for organizations as a contributor to two key organizational pitfalls: sunk cost effects and the "not invented here" syndrome. Closed for comment; 0 Comments.

From Strategy to Business Models and to Tactics

Drivers such as globalization, deregulation, or technological change, just to mention a few, are profoundly changing the competitive game. Scholars and practitioners agree that the fastest-growing firms in this new environment appear to have taken advantage of these structural changes to compete "differently" and innovate in their business models. However, there is not yet agreement on what are the distinctive features of superior business models. This dispute may have arisen, in part, because of a lack of a clear distinction between the notions of strategy, business model, and tactics. HBS professor Ramon Casadesus-Masanell and Joan Enric Ricart present an integrative framework to distinguish and relate the concepts of business model, strategy, and tactics. Key concepts include: An integrative framework that cleanly separates the realm of business model, strategy, and tactics will help guide the search for novel, interesting, and profitable new ways to compete. "Business model" refers to the logic of the firm, the way it operates, and how it creates value for its stakeholders. "Strategy" refers to the choice of business model through which the firm will compete in the marketplace. "Tactics" refers to the residual choices open to a firm by virtue of the business model that it employs. Closed for comment; 0 Comments.