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The Porter Value Chain – a business model canvas view

As mentioned earlier, my thesis on data-centric business models (survey will close soon) will particularly focusing on data-centric value creation.
Central part of my research is the so called Information Value Chain above, that is derived from the Porter Value Chain.

The Information Value Chain

Main advantage of the Information Value Chains is its specific focus on the new characteristics and challenges of information and data.

For my literature research part, I also analyzed the Porter Value Chain and the Business model Canvas for Osterwalder & Pigneur based on the book “Business Model Generation” which has been collaboratively created by over 470 contributors (including me) and can be bought here.

Since the Business Model Canvas represents relations and activities of business in more detail, I integrated the Porter Value Chain into the canvas. The outcome can be discussed and commented below- interactively on the BM:Designer Platform – a great open source tool to visualize business models. Feedback is appreciated.

The next logical step, to integrated the Information Value Chain into the Business Model Canvas will follow soon.

Survey/Feedback Data-centric business models

I currently write my master thesis on “Success factors of data-centric business models” at University of Regensburg (Germany) and in cooperation with Detecon Consulting.

Data-centric business models try to describe emerging business models that are mainly based on leverage data and information exchange with users, communities and partners. As we have observed, companies that adopt a data-centric business model such as Google or Amazon, generate most of their revenues from handling and processing of data or information.

A in depth overview over the methodology and also some examples for data-centric business models such as nike+, Goldcorp, social media aggregation and restaurant reviews can be found in the presentation here.

My current research approach is to develop several case studies based on expert interviews, that are furthermore using the “business model framework/template” (@all thanks for the great and comprehensive work on the book that is released now  – Preview there ) for analyze the overall business model.

Since the focus of my thesis is mainly on information and data-products we have created a framework called “Information Value Chain”(IVC) that is especially targeted at data and information processes of a business model.

The information value chain

In evaluating the IVC as framework analyze data-centric business, we address further questions:

  • What are the key success factors of data-centric business models?
  • How does the information value chain (IVC) help to derive strategic options related to data-centric business models?-
  • What data is marketable and how does it need to be processed and presented?

For a quantitative evaluation of the IVC I’m conducting a online survey. Survey Link
The survey is confidential and will take approximately 5-10 minutes.

It would great if you are able to participate or can give me some feedback, random thoughts and comments on the information value chain approach. Also forwarding to some experts, colleagues etc would be great.

Your benefit to participate is that each participant gets a copy of the aggregated results and final findings of my thesis.

Furthermore, if your company is marketing any informational or data-products. I would be thrilled to ask you some questions in a short 15-20 minute telephone interview. Please leave your contact details in the survey or send it to me via email: Lukas.feuerstein/at/gmail.com.

Thank you al lot.
Kind regards and looking forward to the “business model generation” book

Here some the short characteristics of the several steps of the Information Value Chain (IVC)

1. Data generation/acquisition describes the generation/source of data.
- Is data generated externally through users?
- Is data acquired from partners or users?
- Is data generated internally?
- Structured vs. unstructured data?

2. Storage and representation
- Is the data stored persistently and in a computer oriented way?
- Does the company that stores the data originally own the data (in contrary to pure integration services like Salesforce)?

3. Aggregation and processing
This information value chain steps tries to aggregate and consolidate theData. Furthermore it focuses on the creation of semantic links between data (categories, hierarchies etc.). Also, data is transformed and restructured.

4. Information generation and integration (Mashup)
- Data from different types and sources (internal or externally, structured and unstructured) are mapped, combined and mashed up.
- Integration of value offer of 3rd parties in order to enrich the own data and expand the customer value.
GoogleMaps for examples integrate address data from the GoogleSearch Index with map data and therefore improve the user interface and add value.

5. Analytics and application.
- Evaluation and analysis of the information (e.g Search)
- Adaption into concrete situations (Recommendations, context sensitive ads).
- Personalzation (users adaptive evaluation of data)

6. Presentation and provisioning
- Presentation of the information to the customer and provisioning of the created data and products
- device adapted display of content

Thanks for your comments.
Survey Link

Media in the information age – an information value chain perspective

Following a great article “A solution for the newspaper industry”of Elias Bizannes an Australian Information Value Chain pioneer and passionate blogger on web business models and trends , I will provide some comments about my current research about data-centric business models and the information value chain.

The information value chain

As Elias already has identified: The main strength of the media industry is data (content) generation, processing and aggregation of raw content into comprehensive stories. The value added is filtering and aggregation based on the perception of the consumers needs and therefore the reduction of information overload (in academic terms – search and transaction cost).

In our information value chain, the 4th step – Integration /Information generation – is encompassing the aggregation of data from different sources and types (e.g. the content aggregation like GoolgeNews etc.). In the integration business, the media companies have the huge disadvantage due to technology constraints and moreover independence and neutrality. Simply said, other news companies wouldn’t allow content to be integrated into other companies portals (besides if they are no competitors in the data generation step). So to cover the whole information value chain might ultimately  impossible to achieve for media companies.

Also analytics (e.g. advertisement – step 5 of the Information Value Chain (IVC)) once core for media companies  is substantially disrupted in the information economy – ad margins are in free fall and traditional news companies failed to adapt to online ads and let tech companies fill the gap. Nevertheless, media companies and content still dominate a large part of the web.

German news companies such as  Bertelsmann, Holtzbrinck etc have recently put a lot of effort (money) into Web 2.0 communities, websites f.e. Facebook “copycat” studivz. But due to the new social style of communication we observe that traditional media companies are not able yet to push and syndicate their content through their attached social media channels. They fail to expand both, the reach of their ads and content and on the other hand side to capture user generated content and behaviour to further improve news aggregation and distilling processes.

Concerning presentation (step 6 (IVC)), there is a t the moment a trend towards mobile news that could be charged through micro payments. News companies are already dreaming of an ITunes nodel for news. In my opinion that is a huge option for news companies for sustainable and future revenue, if they are not already too late and tech companies like Apple and Google will fill this gap.

Also “niche is the new mass” is logically thought a good option for media companies to unbundle content as well as perform aggregation and analytics to establish value adding niche communities. German media company Holtzbrinck is already very successfully in producing niche content with gutefrage a “Question and Answer Community” and jogmap a community for exchange running tracks online.

As a conclusion. I agree to Elias, that newspaper have to concentrate on “great content” and use their superior aggregation power to add some further social filtering and collaboration features in order to decrease information overload and provide the user with relevant, personalized and interesting news. Nevertheless, as a fan of the Spiegel magazin I hope print will not die completely.

Please participate in my 5-10 minutes online survey on data-centric business models and the information value chain.