Activity.
Listen to this podcast from Harvard Business Review and answer the questions below.
Audio name on I-tunes and the I-pod: "Reinventing Your Business Model".
Audio name on your CD: "Reinventing Your Business Model.mp3".
Cottage industry. An industry where the creation of products and services is home-based, rather than
factory-based. While products and services created by cottage industry are
often unique and distinctive given the fact that they are usually not
mass-produced, producers in this
sector often face numerous
disadvantages when trying to compete with
much larger factory-based companies.
Telegraph.
Mainframe computers.
Breakthrough. Noun. A sudden advance
especially in knowledge or technique. “This new drug turned out to be a medical
breaktrhrough”.
Formerly. Adverb. Previously.
Cost effectively. Adverb.
Overhead intensive. With very high fixed
costs.
Flop.
Value proposition. A value proposition is a promise of value to be delivered
and a belief from the customer that that value will be experienced.
Overhead costs. In business, overhead or overhead expense refers to an ongoing expense
of operating a business; it is also known as an "operating expense"
Gross margins.
Gross margin (as a percentage of Revenue)
Most people find it easier to work with gross margin because it directly
tells you how much of the sales revenue, or price, is profit. In reference to the two
examples above:
The $200 price that includes a 100% markup represents a 50% gross margin.
Gross margin is just the percentage of the selling price that is profit. In this case 50% of the
price is profit, or $100.
In the more complex example of selling price $339, a mark up of 66%
represents approximately a 40% gross margin. This means that 40% of the $339 is
profit. Again, gross margin is just the direct percentage of profit in the sale
price.
In accounting, the gross margin refers to sales minus cost of goods sold.
It is not necessarily profit as other expenses such as sales, administrative,
and financial must be deducted. And it means companies are reducing their cost
of production or passing their cost to customers. The higher the ratio, the
better.
Assets. In financial
accounting, assets are economic resources. Anything
tangible or intangible that is capable of being owned or controlled to produce
value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value ofownership that can be converted
into cash (although cash itself is
also considered an asset)
Profitably. Adverb.
Get in the way. Interfere.
Paradigm. Noun.
Sunk cost. In economics and business decision-making, a sunk
cost is a retrospective (past) cost that has already been
incurred and cannot be recovered.
Fixed cost
Marginal cost
Marginal revenue
Leverage. Verb. Exploit.
Beat the incumbent. In business the term "incumbent" is used for the
largest company in a certain industry, for instance the traditional phone
company in telecommunications, typically called the "incumbent
operator". In a sales
process, such as public tender, incumbent may also refer to the vendor that has
the largest existing commercial relationship with the issuer of the tender.
Source: Wikipedia.
1. What’s a
disruptive innovation?
2. What’s the
main key to provide a disruptive innovation?
3. Mention the four steps to
start a new business model.
4. Describe the example of
a company successfully facing disruptive innovations.
5. What gets
in the way for companies to face disruptive innovations successfully?
6. Describe an example of
an industry having trouble facing disruptive innovations.
- Traditional Newspaper vs digital Newspaper
- Wireline phones vs Voice over IP
- Netflix versus Blockbuster
- Kodak vs digital photography
- Sony walkman and discman vs i-pod
