The Web’s Anatomy

Realizing that the business environment is evolving from linear value chains toward interconnected Value Webs in response to customer demand, we might ask what is positioned at the hub of the construct. Whereas the more traditional approaches to strategy formulation place the organization at the center of the universe, while defining competitive advantage along the lines of internal capabilities and external opportunities, the Value  Web starts with the customer. Therefore, the customer is located at the core of the construct—the center of the web—with every business decision evaluated against its impact on customer value. Competitive advantage is based upon a company being effective at coordinating partnerships and alliances that, in the aggregate, cater to the customer. The intent is to deliver the total solution by bringing together and orchestrating a supporting cast of companies that provide the functions that are not the core competency of the coordinating organization.

Moving outward from the center of the Web, we encounter the various constituents of the network. Located in the first orbit around the core is the company that provides the offering a customer is interested in, such as an automobile manufacturer. This is usually the company for which a Value Web analysis is performed; rarely do we see a client commission CGE&Y with the full analysis of another entity unless a merger or acquisition situation is being addressed. To distinguish this company from all the other entities in the web, we will refer to it as “the firm.” Besides the firm, other Value Web constituents include the firm’s direct and indirect competitors, suppliers, service providers, retailers and resellers, complementors, affinity groups, and independent authorities. Figure 5.1 illustrates the network.

Taken From : Enterprise Guide to Gaining Business Value from Mobile Technologies

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