Summary on Strategy

1. School of Business & Management
Business Leadership Executive MBA | ITB | Jakarta
PRE-ASSIGNMENT
Name IMAM WAHYUDI
Student ID 29111478 Mobile phone 087770001111
Course code and title Business Strategy
Course time and place 03 February 2013 Program BLEMBA 11
Lecturer Dr.Ir.Mohammad Hamzal, MSE, MBA, MQM
Assignment number 1 Due date 3 February 2013
Combined summary: Reinventing your business model; From Strategy to
Assignment title/topic/case Business Models and onto tactics;
Assignment type (choose one)
( ) Midterm Exam
( ) Final Exam
( V ) Individual Assignment
( ) Group Assignment
( ) Other
Further information (e.g. state if extension was granted and attach evidence of approval, revised submission date)
I declare that the work contained in this assignment is my own, except where acknowledgement of source
is made.
I authorize SBM ITB to test any work submitted by me, using text comparison software, for instances of
plagiarism. I understand that this will involve the SBM ITB or its contractor copying my work and storing it on a
database to be used in future test work submitted by others.
Note:
The attachment of this statement on any electronically submitted assignments will deemed to have the same
authority as a signed statement.
Signed Date
Filled out by lecturer/tutor
Date received from student Assessment/grade Assessed by
Recorded Dispatched (if applicable)
Reading summary pre-assignment Business Strategy

2. School of Business & Management
Business Leadership Executive MBA | ITB | Jakarta
Combined Summary:
Reinventing Your Business Model (Johnson et al,
HBR, 2008) & From Strategy to Business Model
and onto Tactics (Cadesus et al, LRP, 2010)
These both papers review the increasing importance of business model innovation to
company competitive advantage in proposing value to customer, and offer a framework and
definition to redefine our business model. Innovations in business model within the past 10
years have shown a significant proportion in the winning company in the Fortune 500.
Business model innovations have reshaped the entire industries and redistributed billion of
dollars of value. However, less than 10% of innovation investment at global companies is
focused on developing new business model.
Despite most of executives believe business model innovation will become even more
important for success in the future, senior managers at incumbent companies sometime find it
difficult to pull off a new growth that business model innovation can bring. The study shows
there is at least two main reasons: lack of definition and uncertainty whether changing their
current business model will leverage their core business (Johnson et al, 2003)..
The first article offers a road map in simple step to understand and design business model that
may bring better customer value proposition. It defines business model into four elements:
Customer Value Proposition, Profit formula, Key resources, and Key processes. The case in
Apple Inc, and Hilti shows that their new business model boost their competitive edge and
bring them as new market leader until the competitors trying to cope with their business
model change.
The second article offers a guideline to deploy strategy into business model and onto tactics.
As choosing the right business model as “the logic of the firm” is the one of key important of
company to achieve its vision, understanding business model and how to implement into
tactics are important step for a winning strategy. The article offers a generic two-stage of
competitive process framework. In the first stage firm choose a logic of value creation, and in
the second stage make tactical choices guided by their goals.
Reading summary pre-assignment Business Strategy

3. School of Business & Management
Business Leadership Executive MBA | ITB | Jakarta
IMPLEMENTING BUSINESS MODEL IMPROVEMENT
To implement a reinvention of business model of a company and deploy such into further
strategies and tactics, it is very important to understand what the existing business model of
the company is. Executive should be able to see what their existing customer value
proposition is and formulate better customer value proposition to maximize company core
competences.
In the first stage, logic of value creation and value capture is defined. From the first article,
we first shall define key element of our business model:
1. Customer Value Proposition
It is very important that we understand what our existing value proposition to
customer is and what the competitors value proposition to our customer is. Then what
can we do to better give value proposition that may win the competition.
2. Profit formula
Based on the CVP, company should define the profit formula. A working business
model shall has profit formula to achieve its metric objective. A better value
proposition without good profit formula will not help the company to improve its
performance at all.
3. Key processes
Company shall define the rules, metric and norm to make profitable delivery of
customer value proposition repeatable and scalable. This might include processes
(design, product development, sourcing, hiring, and training), rules and metrics
(margin requirement for investment, credit, terms, lead times), and norms
(opportunity size needed for improvement, approach to customer and channels)
4. Key resources.
It is very important that we understand what our existing value proposition to
customer is and what the competitors value proposition to our customer is. Then what
can we do to better give value proposition that may win the competition.
After firm choose the Business Model firm shall make tactical choices made from amongst
those available, depending on the business model.
Reading summary pre-assignment Business Strategy

4. School of Business & Management
Business Leadership Executive MBA | ITB | Jakarta
IMPLICATION
Business model innovation in the past 10 years had shown as a game-changer for the
competition. Many firm come up as new champion in the Fortune 500 with new proposed
business model that differentiate them and make their competitors’ proposition to customer
no longer relevant.
The implication of this phenomena is firm must adapt into the new game of business model
innovation. Decades ago, manufacturing or service business model can last for 10-20 years or
more. Nowadays firm must adapt to change their business model when competitor is offering
a new edge, within less than 5 years period.
Firm then must have deep understanding of the what business are they in and what business
model will give best value proposition to customer while providing profit to the firm. To do
so executive of the firm must have deep understanding of strategy and business model, and
later on deploy the strategy and business model onto tactical choice and management plant to
execute.
Tactics as the residual choices open to a firm after choosing its business model are crucial in
determining firms value creation and capture. The challenge of this reinvention of business
model is not only in the planning stage when drawing the board for strategy and business
model, but also to its execution. A good business model will always only be in the drawing
board if the execution of the tactics is not excellence.
LESSON LEARNED.
Current increasing competition indicates that changing our business model to better provide
customer value proposition is sometime change the game-plan how a company can outrun its
competitors. To perform such business model redefinition understanding of our and
competitor’s existing business model is important.
Reading summary pre-assignment Business Strategy

5. School of Business & Management
Business Leadership Executive MBA | ITB | Jakarta
To reinvent firm business model, both article suggest framework that can be combined into
two stages. First stages is redefining the element of the business model based on the strategy
of the firm and select which business model is the most suitable to win the market. The
second stage shall be deploying into more tactical choices for management action plan.
Reading summary pre-assignment Business Strategy