Value Architecture
" What Strategy is all about is, in a word, competitive advantage.
The sole purpose of strategic planning is to enable a company to efficiently gain a sustainable edge over its competitors "
KENICHI OHMAE – THE MIND OF THE STRATEGIST
Any firm, whether it produces products or services, transforms some inputs into outputs (aka Value Propositions). Inputs typically range from raw-materials, labour, intermediate products, consumables.
Note: the transformation process may also require items (e.g. machinery) that can be used repeatedly. Such items are called Capital Equipment and are not transformed in the process.
Value Architecture is therefore aiming at finding optima, all things being equal. Besides, Value Architecture is also concerned with looking for and introducing new production functions, that is new ways of generating similar results (aka process innovation / technology innovation).
Usually a single firm will not transform raw materials into end products / services. By contrast, firms will specialise into some segments of the so-called Value System (the sequence of all the intermediate value chains from raw materials to final products).
Business ecosystems are „are heterogeneous coalitions of companies from different sectors, forming strategic communities of interests or values and structured in networks around leaders that are able to impose or share their commercial visions or technological standards” (Torres-Blay).
