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The Business Model Concept and its Utility in Advancing NABCI Joint Ventures

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Presentation given by CKB to open the 'Joint Venture Conservation Business Model Roundtable' in Austin, TX the week of Dec 11, 2006 – PowerPoint PPT presentation

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Title: The Business Model Concept and its Utility in Advancing NABCI Joint Ventures


1
The Business Model Concept
and its Utility in
Advancing NABCI Joint Ventures
Joint Venture
Conservation Business Model Roundtable
December 12, 2006
Austin, TX
2
Central message or thesis
The Business Model Concept, a relatively recent
and not yet fully mature construct of the
business world, has substantial utility to the
business of conservation agencies,
organizations, and partnerships.
3
Objectives
  • Provide an overview of the concept emphasizing
    its origins and perceived utility within the
    business world.
  • Identify broadly the concepts and elements of a
    business model and translate them into those of a
    conservation business model.
  • Provide observations on the utility and
    application of the concept in furthering the
    business of NABCI Joint Ventures.

4
Topics
  • The Business Model Concept An Overview
  • Origin and Antecedents
  • Key Drivers Behind the Emergence of the Concept
  • Key Terms, Elements, and Associated Concepts
  • Perceived Utility Within the Business World
  • Adapting the Business Model Concept to the
    Conservation Enterprise
  • Observations on Applying the Concept to NABCI
    Joint Ventures

5
Origins
The term business model is a recent addition
to the management literature and largely a
product of the dot com era.
Through the mid- to late-1990s the term is
entirely absent from all the most influential
books on organizational design, business
strategy, business economics, and business
theory.
At the height of the dot.com bubble, the term was
almost every where in books on e-commerce, both
scholarly and business trade pressa marketing
catchphrase for IT vendors.
Keen, P. and S. Qureshi. 2006. Organizational
Transformation Through Business Models A
Framework for Business Model Design. Proceedings
of the 39th Hawaii International Conference on
System Science
6
Origins
the number of times the term business model
appeared in a business journal (peer-reviewed and
non-peer reviewed) follows a pattern that
resembles the shape of the NASDAQ market index.
The literature shows that the topic of business
models is often discussed superficially and
frequently without any understanding of its
roots, its role, and its potential.
Osterwalder, A, Y. Pignuer, and C.Tucci. 2005.
Clarifying Business Models Origins, Present,
and Future of the Concept. Communications of the
Association of Information Systems, Vol 15, May
2005
7
Origins
Hedman, J. and T. Kalling. 2001. The Business
Model A Means to Understand the Business Context
of Information and Communication Technology.
Institute of Economic Research Working Paper
Series, School of Economics and Management, Lund
University, Sweden.
Chesbrough, H. and R.S. Rosenbloom. 2002. The
role of the business model in capturing value
from innovation evidence from Xerox
Corporations technology and spin-off companies.
Industrial and Corporate Change, Vol. 11, pp.
529-555
8
Origins
The concept has its roots in and is an extension
of strategy theory.
Strategy theory concerns itself with the analysis
and explanation of how individual businesses
perform in a competitive environment. It deals
with the reasons and rationale for success or
failure among businesses and focuses on the
forces and factors that lead to competitive
advantage.
9
Origins
Three Dimensions of Strategy Theory
  • How a firm allocates, organizes, and manages its
    resources and assets internally.
  • How a firm perceives external threats and
    opportunities and positions itself within its
    external environment.
  • How and to what extent a firm integrates
    information technology into its functions and
    processes.

Hedman and Kalling (2001) see the potential of
the business model concept as being able to unify
these three areas and particularly the last with
the first two.
10
Chesbrough and Rosenbloom (2002)
  • Traced the antecedents of the concept to
    Strategy and Structure a 1962 book by Alfred
    Chandler.

seminal
the first systematic and comparative account of
growth and change in the modern industrial
corporation.
11
Chesbrough and Rosenbloom (2002)
  • Traced the antecedents of the concept to
    Strategy and Structure a 1962 book by Alfred
    Chandler.
  • Referenced writings in the 60s and 70s that
    developed and differentiated the concepts of
    business strategy and corporate strategy.

Business strategy the how, when, where of
bringing a product to market.
Corporate strategy the what and why that
determines a business reason for being.
12
Chesbrough and Rosenbloom (2002)
  • Traced the antecedents of the concept to
    Strategy and Structure a 1962 book by Alfred
    Chandler.
  • Referenced writings in the 60s and 70s that
    developed and differentiated the concepts of
    business strategy and corporate strategy.

Seemed to perceive a utility of the business
model as being able to integrate the firms
business strategies with its overarching
corporate strategy.
13
Chesbrough and Rosenbloom (2002)
Addressed the role and significance of the
business model concept in determining whether and
how a company captures value from its
technological innovations.
And concluded that a company unable to adapt a
technological innovation to its current business
model or bring it to market with a different
model will see value foregone and may ultimately
reduce or withdraw from its commitment to
technological innovation.
14
Differentiating between business model and
strategy
Neither Hedman and Kalling (2001) nor Chesbrough
and Rosenbloom (2002) equated business model with
strategy and both saw the former as being more
encompassing than the latter.
15
Differentiating between business model and
strategy
Keen, P. and S. Qureshi. 2006. Organizational
Transformation Through Business Models A
Framework for Business Model Design. Proceedings
of the 39th Hawaii International Conference on
System Science
the two terms are often used interchangeably.
This both weakens the value of the sharp logic of
an effective business model and makes it a
redundant concept if it is just a variant on
strategy.
The business model establishes the principles
and axioms on which strategy is built.
To some extent the business model is the what
of business innovation and the strategy the
how.
16
Key Drivers behind the emergence of the concept
  • Globalization of economies
  • The transition from an industrial, manufacturing-
    based economy to a knowledge/service-based
    economy.
  • Rapid advances in IT that have on one hand
    enabled and on the other required businesses to
    rethink, fundamentally, their business processes,
    business structure, and business networks.

17
Key Terms, Elements, and Associated Concepts
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)
  • The Theory of the Business

18
Value Proposition
The unique added value an organization offers its
customers through its operations. An
organizations reason for being as expressed
through the products, goods, and services it
intends to provide to its customers.
19
Value Chain
The stream of processes, activities, and
functions operating within a business that are
most responsible for the realization of its value
proposition.
Porter, M. 1985. Competitive Advantage Creating
and Sustaining Superior Performance. Free Press,
MacMillan, New York.
20
Value Chain
The stream of processes, activities, and
functions operating within a business that are
most responsible for the realization of its value
proposition.
Primary Activities
Secondary Activities
  • Inbound logistics
  • Procurement
  • Operations
  • Technology Development
  • Outbound logistics
  • Human Resources Mgmt
  • Marketing and Sales
  • Firm infrastructure
  • Service

21
Value Chain
The stream of processes, activities, and
functions operating within a business that are
most responsible for the realization of its value
proposition.
value chains are not as a
matter of business well defined or mapped.
Presumption
the more clearly a business
can map its value chain, the more efficient it
will be in maximizing the profits or competitive
advantage associated with its value proposition.
Assumption
22
Value Network
a web of relationships that generates economic
value and other benefits through complex dynamic
exchanges between two or more individuals, groups
or organizations. Any organization or group of
organizations engaged in both tangible and
intangible exchanges can be viewed as a value
network, whether private industry, government or
public sector.
www.vernaallee.com
23
Value Network
Business Ecosystem
Moore, J.F. 1993. Predator and Prey a New
Ecology of Competition, Harvard Business Review
Vol. 71(3), pp.75-86
Used the ecosystem analogy to explain the complex
interrelationships between otherwise independent
businesses functionally allied through supply
chains, distribution chains, technology
development, etc.
Moore, J.F. 1996. The Death of Competition
Leadership and Strategy in the Age of Business
Ecosystems. 303 pp. HarperBusiness
24
Value Network
Business Ecosystem
Iansiti, M. and R. Levien. 2004. The Keystone
Advantage What the New Dynamics of Business
Ecosystems Mean for Strategy, Innovation, and
Sustainability. Harvard Business School Press,
Boston. 253 pp.
biological ecosystems can serve as a source of
vivid and useful terminology as well as provide
specific and powerful insights into the different
roles played by firms.
25
Value Network
Business Ecosystem
Iansiti, M. and R. Levien. 2004. The Keystone
Advantage What the New Dynamics of Business
Ecosystems Mean for Strategy, Innovation, and
Sustainability. Harvard Business School Press,
Boston. 253 pp.
  • Keystone species (value dominator)
  • Physical dominator
  • Niche
  • Commodity

26
Key Terms, Elements, and Associated Concepts
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)
  • The Theory of the Business

27
Core Competencies
Prahalad, C.K. and G. Hamel. 1990. The Core
Competence of the Organization Harvard Business
Review, Vol. 68(3) pp.79-93
The core competencies of an organization like
that of an individual can take the form of
knowledge, skills, abilities, or expertise in a
particular subject matter, process, or function.
  • Not confined to individuals traits or
    characteristics of the organization

Honda an ability to design and manufacture
highly efficient internal combustion engines
irrespective of size, scale, or intended use.
28
Core Competencies
Prahalad, C.K. and G. Hamel. 1990. The Core
Competence of the Organization Harvard Business
Review, Vol. 68(3) pp.79-93
Presumptions
  • If clearly articulated, core competencies will
    serve as unifying principles for the organization
    and permeate all its strategies.
  • If well aligned with mission, value proposition,
    and value network, explicitly stated core
    competencies will place the organization at
    greater competitive advantage.

29
The Theory of the Business
These are the assumptions that shape any
organizations behavior, dictate its decisions
about what to do and not to do, and define what
the organization considers meaningful results.
  • Assumptions about the external environment within
    which the organization operates.
  • Assumptions about the specific mission of the
    organization.
  • Assumptions about the core competencies needed to
    accomplish the mission.

Drucker, P.F. 1994. The Theory of the Business
Harvard Business Review, Vol. 70 no. 5
30
The Theory of the Business
These are the assumptions that shape any
organizations behavior, dictate its decisions
about what to do and not to do, and define what
the organization considers meaningful results.
  • Every organization has one, though rarely is it
    explicitly stated.
  • Assumptions are seldom made explicit.
  • Reassessing assumptions is essential to managing
    change.

Drucker, P.F. 1994. The Theory of the Business
Harvard Business Review, Vol. 70 no. 5
31
Specifications of a valid Theory of the Business
  • Assumptions about environment, mission, and core
    competencies must fit reality.
  • Assumptions in all three areas have to fit one
    another.
  • The Theory of the Business and thus its
    assumptions must be known and understood
    throughout the organization.
  • The Theory and its underlying assumptions must be
    treated as an hypothesis and constantly tested.

Drucker, P.F. 1994. The Theory of the Business
Harvard Business Review, Vol. 70 no. 5
32
Key Terms, Elements, and Associated Concepts
of a Business Model
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)

E x p l i c i t n e s s
  • The Theory of the Business
  • Assumptions re external environment
  • Assumptions re mission/reason for being
  • Assumptions re core competencies

33
Purpose and Utility
of the Business Model Concept
Purpose Clarify and unify the purpose, mission,
function, and operation of an organizational
entity within the framework of its external
environment.
Utility Increasing understanding clarifying
relationships enabling analysis and adaptation
and ultimately managing change.
34
Topics
  • The Business Model Concept An Overview
  • Origin and Antecedents
  • Key Drivers Behind the Emergence of the Concept
  • Key Terms, Elements, and Associated Concepts
  • Perceived Utility Within the Business World
  • Adapting the Business Model Concept to the
    Conservation Enterprise
  • Observations on Applying the Concept to NABCI
    Joint Ventures

35
  • Adapting the Business Model Concept to the
    Conservation Enterprise

biological ecosystems can serve as a source of
vivid and useful terminology as well as provide
specific and powerful insights into the different
roles played by firms.
Iansiti and Levien (2004) p.9
The Business Model Concept, a relatively recent
and not yet fully mature construct of the
business world, has substantial utility to the
business of conservation agencies,
organizations, and partnerships.
36
Key Terms, Elements, and Associated Concepts
of a Business Model
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)

E x p l i c i t n e s s
  • The Theory of the Business
  • Assumptions re external environment
  • Assumptions re mission/reason for being
  • Assumptions re core competencies

37
Key Terms, Elements, and Associated Concepts
of a Conservation Business Model
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)

E x p l i c i t n e s s
  • The Theory of the Business
  • Assumptions re external environment
  • Assumptions re mission/reason for being
  • Assumptions re core competencies

38
Value Proposition
The unique added value an organization offers its
customers through its operations. An
organizations reason for being as expressed
through the products, goods, and services it
intends to provide to its customers.
39
Conservation Value Proposition
The value-added products, goods, and services the
conservation organization intends to deliver to
the conservation community to include
specifying the target audience (customer/market)
within the larger community.
Functional Elements of the Conservation Enterprise
Planning
Evaluation
Implementation
Research
Monitoring
I E
40
Planning
Implementation
Monitoring
Evaluation
Research
I E
41
Planning
Implementation
Monitoring
Evaluation
Research
I E
42
Planning
Implementation
Monitoring
Stand-level forest inventories coordinated
across the MAV system of state/federal management
areas focused on parameters assumed most
responsible for population response of priority
wildlife species and linked to partner-specific
decision-making processes regarding stand entry
and management.
Evaluation
Research
I E
43
Value Chain
The stream of processes, activities, and
functions operating within a business that are
most responsible for the realization of its value
proposition.
44
Conservation Value Chain
The stream of processes, activities, and
functions embedded within and flowing through the
functional elements of the conservation
enterprise that are responsible for the
realization of the value proposition in question.
Functional Elements of the Conservation Enterprise
Planning
Evaluation
Implementation
Research
Monitoring
I E
45
Business Ecosystem
biological ecosystems can serve as a source of
vivid and useful terminology as well as provide
specific and powerful insights into the different
roles played by firms.
Iansiti and Levien (2004) p.9
Conservation organizations
  • What ecological niche does our organization /
    partnership intend to fill.
  • What ecological functions and services are we
    most associated with and responsible to.
  • What ecological relationships are most critical
    to our effectiveness.

46
Core Competencies
Prahalad, C.K. and G. Hamel. 1990. The Core
Competence of the Organization Harvard Business
Review, Vol. 68(3) pp.79-93
Presumptions
  • If clearly articulated, core competencies will
    serve as unifying principles for the organization
    and permeate all its strategies.
  • If well aligned with mission, value proposition,
    and value network, explicitly stated core
    competencies will place the organization at
    greater competitive advantage.

47
Core Competencies
  • Moist soil management
  • Restoration of longleaf pine stands
  • Wetland impact assessment
  • Prescribed burning
  • Biological planning at landscape scales
  • Conservation design
  • Technical assistance to landowners in the
    restoration and management of native grasslands
  • Etc.

48
Core Competencies
Prahalad, C.K. and G. Hamel. 1990. The Core
Competence of the Organization Harvard Business
Review, Vol. 68(3) pp.79-93
Presumptions
  • If clearly articulated, core competencies will
    serve as unifying principles for the organization
    and permeate all its strategies.
  • If well aligned with mission, value proposition,
    and value network, explicitly stated core
    competencies will place the organization at
    greater competitive advantage.

49
The Theory of the Business
These are the assumptions that shape any
organizations behavior, dictate its decisions
about what to do and not to do, and define what
the organization considers meaningful results.
  • Assumptions about the external environment within
    which the organization operates.
  • Assumptions about the specific mission of the
    organization.
  • Assumptions about the core competencies needed to
    accomplish the mission.

Drucker, P.F. 1994. The Theory of the Business
Harvard Business Review, Vol. 70 no. 5
50
1986 NAWMP New Directions
  • Management success would be linked to population
    response at a continental scale and landscape
    sustainability at ecoregional scales.
  • Protection, restoration, and management would be
    formally coordinated through regional
    partnerships.
  • Inventory and Monitoring would be undertaken at a
    scale that would support progressive refinement
    of population goals and habitat objectives.

51
LMVJV Assumptions
  • Joint Venture partners are expected to establish
    a biological linkage between on-the-ground
    habitat objectives and Plan population goals.
  • Characterizing and assessing landscape
    sustainability are critical JV endeavors.
  • Monitoring and evaluation are integral components
    of NAWMP implementation and by extension JV
    implementation.
  • Delivery programs will be focused on private as
    well as public lands and coordinated well enough
    that the whole exceeds the sum of its parts.

52
LMVJV Theory of the Business
  • Joint Venture partners are expected to establish
    a biological linkage between on-the-ground
    habitat objectives and Plan population goals.
  • Characterizing and assessing landscape
    sustainability are critical JV endeavors.
  • Monitoring and evaluation are integral components
    of NAWMP implementation and by extension JV
    implementation.
  • Delivery programs will be focused on private as
    well as public lands and coordinated well enough
    that the whole exceeds the sum of its parts.

53
Key Assumptions re A JVs Business Model
Re External Environment
  • The extent and nature of reciprocal
    responsibilities believed to exist between a JV
    and
  • The committees/teams of the bird initiatives

e.g. The responsibilities of the PIF Steering
Committee and Science Team to JV Management
Boards and Science Teams include
e.g. The responsibilities of JV Management Boards
and Science Teams to the PIF Steering Committee
and Science Team include
54
Key Assumptions re A JVs Business Model
Re External Environment
  • The extent and nature of reciprocal
    responsibilities believed to exist between a JV
    and
  • The committees/teams of the bird initiatives
  • U.S. NABCI Committee
  • AFWA Committees/Working Groups
  • Committees/Working Groups of other JVs
  • Flyway Committees

55
Key Assumptions re A JVs Business Model
Re External Environment
  • The extent and nature of reciprocal
    responsibilities believed to exist between a JV
    and the institutional infrastructure of the bird
    community at large.
  • Sovereignty/legal status of the JV partnership.
  • Whether the JV partnership or Office will
    function as a grant-making entity.
  • Role of science in the JVs operating system.
  • Science as a body of knowledge
  • Science as a method of discovery (i.e. adaptive
    management, structured decision-making)

56
Key Assumptions re A JVs Business Model
Re Mission, Functions, and Services
  • The scope of functional responsibility assumed by
    the JV in implementing national/international
    plans.
  • Coordinated delivery of habitat projects
  • Coordinated bird monitoring
  • Coordinated research
  • Assessing, predicting, monitoring landscape
    sustainability.
  • Strengthening the Biological Foundation
  • Policy/regulatory matters
  • Public outreach

57
Key Assumptions re A JVs Business Model
Re Mission, Functions, and Services
  • The scope of functional responsibility assumed by
    the JV in implementing national/international
    plans.
  • Operational responsibilities of the JV Office vs.
    individual partners in providing JV functions and
    services.
  • Relationship between JV implementation and State
    Wildlife Conservation Grant Plans.

58
Key Assumptions re A JVs Business Model
Re Core Competencies
  • Competencies associated with the functional
    elements of the conservation enterprise.

59
Key Assumptions re A JVs Business Model
Re Core Competencies
  • Competencies associated with the functional
    elements of the conservation enterprise.
  • Operational responsibilities of the JV Office vs.
    individual partners in providing JV functions and
    services.

60
Key Terms, Elements, and Associated Concepts
of a Conservation Business Model
  • Value Proposition
  • Value Chain
  • Value Network (Business Ecosystem)
  • Core Competencies (of the organization)

E x p l i c i t n e s s
  • The Theory of the Business
  • Assumptions re external environment
  • Assumptions re mission/reason for being
  • Assumptions re core competencies

61
Central message or thesis
The Business Model Concept, a relatively recent
and not yet fully mature construct of the
business world, has substantial utility to the
business of conservation agencies,
organizations, and partnerships.
62
Purpose and Utility
of the Business Model Concept
Purpose Clarify and unify the purpose, mission,
function, and operation of an organizational
entity within the framework of its external
environment.
Utility Increasing understanding clarifying
relationships enabling analysis and adaptation
and ultimately managing change.
63
The Business Model Concept
and its Utility in
Advancing NABCI Joint Ventures
Joint Venture
Conservation Business Model Roundtable
December 12, 2006
Austin, TX
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