Dollinger index

114 ENTREPRENEURSHIP

The first question to answer is: In which arenas will the venture compete? This is the

initial part of the story of the business model. The next question is: What vehicles will

we employ? At this point in the text, we have primarily been focused on internal devel-

opment as the prime vehicle. The other collaborative and cooperative formats will be

covered in Chapter 9. Here we note that creating the organization involves a set of

strategic decisions.

The third question is: How will we be different? This is where our RBV theory and

strategy come into play. We will be looking for resources that have the VRIN character-

istics. The fourth question requires the firm to specify the staging of the decisions. In

what order will the venture do things and how fast? All of these decisions converge on

the center square. This is the revenue model described above.

Another way of looking at a business model was offered by Amit and Zott.^6 They

emphasize the transactions and exchange themes of the story. These authors define a

business model as “the content, structure and governance of transactions designed so as

to create value through the exploitation of business opportunities.”

Transaction contentrefers to the actual goods, services, and information that are

being exchanged by the parties, and the resources and capabilities employed to facilitate

the exchange. It represents the “what” of the story.

Arenas

Which product categories?

Which market segments?

Which geographic areas?

Which core technologies?

Which value chain emphasis?

Economic Logic

Lowest costs via scale advantages?

Lowest costs via scope and

replication advantages?

Premium prices due to

unmatchable services?

Premium prices due to proprietary

product features? How will we

get there?

What will be

our speed

and

sequence of

moves?

How will we win?

How will we obtain

our returns (make

money)?

Where will we

be active?

FIGURE 4.1 The Strategy Diamond

Differentiators

Image?

Customization?

Price?

Styling?

Product reliability?

Vehicles

Internal Development?

Joint Ventures?

Licensing/Franchising?

Acquisitions?

Staging

Speed of expansion?

Sequence of initiatives?

¾¾¾¾¾

SOURCE: Adapted from D. Hambrick and J. Fredrickson, “Are You Sure You Have a Strategy?” Academy of Management
Executive, 2001.