Leveraging the Value Web

The whole purpose of constructing the network is to look for insights that will allow us to understand the power relationships among Value Web constituents and to develop a portfolio of strategic initiatives that provide us with a competitive advantage. The steps we will follow in leveraging our Value Web include:
1. Analyzing value and sustainability to define relative power
2. Defining strategic focus based on power shifts
3. Developing strategic initiatives and quantifying impacts

Step #1: Analyzing Value and Sustainability
to Define Relative Power
To identify potential strategic actions relative to its business environment and current or future players, the firm conducting the analysis should classify the relative power of the web’s constituents into what we call a power grid. The power grid illustrates constituent influence by placing the network members into a matrix showing the value and sustainability that each brings to the web. The intent of the power grid is to quantify the relationships among Value Web constituents. The following sections illustrate how a power grid is created. The three activities involved include creating a value index, assessing the sustainability index, and creating the power grid.
Creating a Value Index
Our first activity is to construct a value index. The value index is a grid that quantifies the value each of the web’s constituents receives and provides. We start by drafting a value transaction matrix that lists each constituent along the vertical and horizontal axes. In our example, we labeled the column header as “Outbound: Value Delivered to Others,” whereas the row header specifies “Inbound: Value Received from Others.” We then populated each cell in our matrix with the types, or dimensions, of value transactions
between two constituents. These dimensions include Economic value (E), Informational value (I) and Intangible value (T). Economic value describes the exchange of goods or services usually for a monetary payment. Examples include raw materials, finished goods, or maintenance support. Informational value includes the exchange of content, customer data, or intellectual capital across nodes. Intangibles include influence relationships, opinions, emotions or other unquantifiable transactions between Value Web constituents. As seen earlier, an example of intangible value includes an affinity group or independent authority issuing an opinion that influences the buyer’s decision-making process.

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

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