LEVERAGE IT TO CREATE BUSINESS ADVANTAGE

PART 1
A good business model is essential to every successful business.

During the previous century the well-established business model was used by most executives to drive their companies. Dot-com era destroyed this model. In today's global network economy new business models are emerging. Radical changes how companies create value within industry requires a new management tools to define strategy and its execution - framework of a business model. IT has great impacts on the three components of a business model - strategy, capabilities, and value. It plays bigger roles in transforming business models.

Business Model definition:

A business model defines how an organization interacts with its environment to define a unique strategy, attract the resources and build the capabilities required to execute the strategy, and create value for all stakeholders.

There are fundamental principles how to run a sustainable business. Using these fundamentals is very important during the turbulent time. An enterprise's business model frames these fundamentals. It can be used for strategic analysis and decision making. It also used to assess the IT impact on the business.

Strategy:

According to Michael Porter, strategy is a set of choices that determine the opportunities you pursue and the market potential of these choices.

These choices define strategic positioning along four key dimensions:
• Market positioning - customers to serve and channels to reach the customers
• Product positioning - products and services to offer and the price to be charged
• Business network positioning - role within extended network of suppliers, producers, distributors, and partners
• Boundary positioning - markets, products, and businesses that will NOT be pursued.

A successful positioning attracts many copy cats. Sustainable advantage happens when barrier for entrance is high and it is difficult for competitors to imitate.

Business model audit can by done by analyzing strategy, capabilities, and value created for all stakeholders.

Resources:

L. Applegate, R. Austin, D. Soule. Corporate Information Strategy and Management, 2009