GRA6821: Third lecture: Technology in Chains, Shops and Networks

In this class (on September 11), we first discuss the (probably by now very well known) value configuration framework, and then spend some time on Dell Computer and how this company has used technology and process design to support a very successful business model. We will also, briefly, look at Amazon.com.

Please read and be prepared to discuss:

  • Porter, M. E., & Millar, V. E. (1985). How information gives you competitive advantage. Harvard Business Review (July-August), 149-160. (Classic, everyone should have read this already.)
  • Keri Pearlson and Raymond Yeh (1999): Dell Computer Corporation: A Zero-Time Organization. UTexas Austin.
  • Christensen, C. M., M. Raynor, et al. (2001). "Skate to Where the Money Will Be." Harvard Business Review (November): 73-81.
  • Tom Friedman: "How a Dell computer is built", excerpt from his book The World is Flat (2004). Read my notes on the book here, and a critique here.
  • Check out Dell Corporation’s home page and anything else you can find on Dell and its competitors.
  • Read this article from the Economist about how Amazon.com seeks to evolve its business.

Further reading (for the specially interested, or for those unfamiliar with the chain-shop-network framework):

  • Stabell, C. B. and Ø. D. Fjeldstad (1998). "Configuring Value for Competitive Advantage: On Chains, Shops and Networks." Strategic Management Journal 19: 413-437. Academic article that defined the framework.
  • Fjeldstad, Ø. and E. Andersen (2003). "Casting off the chains: Value shops and value networks." European Business Forum(14): 47-53. Practitioner-oriented article that gives more detail on the managerial implications.
  • Venkatraman, N. (1994). "IT-enabled Business Transformation: From Automation to Business Scope Definition." Sloan Management Review (Winter): 73-86. Integration of the value chain – five stages of change as a result of IT.
  • Andersen, E (2004): Driving Business Integration, Concours Group Re.sults report

Questions:

  • How does the evolution in coordination capability change the value chain? The value shop? The value network?
  • Is Dell a chain, a shop or a network?
  • What does "Skate to where the money will be" mean?
  • Dell’s direct model has been very successful – why hasn’t this model been widely used in other industries? Can you find examples of other industries where some company has followed Dell’s strategy?
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