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CONNECT TO TODAY QUESTIONSTOPIC 4: SIGGELKOW & TERWIESCH
- When you think about the scope of a business, the weblectures showed that there are 3 dimensions: the
geographical scope, the product/service scope and the customer scope. To which dimension(s) does this article link
strongly? What are your insights on how the different components of a competitive advantage (WTP, costs) are
affected by the four strategies mentioned in this article?
All four strategies are about the customer scope . All these companies want a connected strategy, this is
building continuous relationships with the customers.
The four strategies mentioned in the article: respond to desire, curated offering, coach behavior and
automatic execution.
Effect on Cost:
o Short term: there would not be much significant effect on cost as the strategies mentioned would
be like a complementary service to the customers.
o Long term: Here there are possibilities of companies to integrate vertically and taking over more
activities in value chain. Distribution activities being performed by the company to its existing
customers, this would result in cost savings.
o For the costs I am not sure as they could be lower because, as a company you can earlier identify
the need for a delivery and thus plan this more efficiently but more costs occur due to the data
gathering.
o Costs can be decreased as well, since the company steers customers towards products/services they
can and want to provide.
o Maybe to add something to the cost side; we could distinguish between short term and
medium/long term. In the short term, in my opinion it is likely costs will increase; the company will
need new and more complex communication channels and an extra effort to convince customers to
make use of these channels could be required. Once enough customers (scale econommies) use the
new communication lines or allow their data to be shared, and the company has gained insights and
capabilities, efficiency will improve, and in turn, costs will decrease.
o From the lectures we know that a company that focuses on both high WTP and low cost comes
"stuck in the middle". So I don't think costs can be lowered?
WTP:
o By building capabilities on consumption behaviour; as mentioned in strategies (operational,
recommendation, coach and automation) companies would be able to drive the WTP for products.
o Also an added competitive advantage would be from the group of customers created (trusted
customers).
In long term view the wedge between cost and WTP would be wider.
, TOPIC 4: CASADEUS-MASANELL AND RICART
Both the web lecture on business models and this reading illustrate the importance of generating virtuous cycles
that are self-reinforcing.
- Can you think of examples (next to the ones discussed in the weblectures and this reading) where the
business model is self-reinforcing?
Deliveroo: its competitive advantage lies in its strong focus on high quality restaurants. This strong focus
on high quality results in higher customer ratings. These higher customer ratings allow them to charge
high(er) prices on both the food and delivery. The resulting revenue allows them (again) to improve their
offer in high quality restaurants.
HelloFresh: Their competitive advantage is focusing on cheap, convenient meal boxes. They offer it at a
low price. People also find it convenient. In the boxes, they offer discount codes for friends and family. In
turn, tey are going to use it. The number of people increases (demand). Which again allows the cost to
go down.
- This reading describes how Airbus disrupted the virtuous cycle of Boeing by introducing the A380 to compete
with the Boeing 747, do you have recent other examples in mind of firms that compete through disrupting
each other's business models?
Deliveroo: Takeaway.com's main focus was providing customers with tasty fast food emphasising
convenience and tastiness, but ignoring quality. Deliveroo distrupted Takeaways's business by not only
focusing on tasty and 'fast' food, but also taking into account healthy food options, the quality of the
food and, the sustainiblity of the delivery. This all at a premium delivery price that customers seem to be
willing to pay.
TOPIC 4: PISANO
- Penrosian growth is a about redeploying assets from one sector to another. Examples in the paper are the different
activities in Virgin Group’s entry into fitness centers, insurance and banking,… and Honda’s entry into the light
private jet market. Do you have other examples in mind - not discussed in this paper - about existing firms
(preferably firms we all know) that could realize/have realized such growth? Please also specify which capabilities
(market-specific capability or general-purpose capability) the firm needs/needed to deepen or broaden to do so.
The expansion of Uber into the food delivery market with Uber eats comes to mind. Uber used her capability to
bring two parties (clients and drivers) together on a platform in the new market to bring together two different
parties (customers and bike delivery drivers) on a different platform. To do this, Uber needed to broaden this
general-purpose capability.
Samsung had many pioneer general purpose capabilities (connected mobility, semiconductors, user
experience, displays and its global distribution channels) with which it had already entered automotive
business. To develop more market specific capabilities in automotive industries, they took over Harman with
resource in designing and integrating sophisticated in-vehicle technologies mainly connected car technology
and autonomous driving solutions, as well as its long-term relationships with most of the world’s largest
automakers which would give them scale growth also.
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