Classroom Companion: Business

 
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Questions
1. Are the following businesses primarily a value chain, value shop, or a value 
network?
(a) Johns Hopkins Hospital
(b) AXA
(c) Harvard University
(d) BMW
(e) Apple iPhone
(f) Apple App Store
(g) Twitter
2. Which of the user groups, if any, contribute to the revenues of:
(a) The newspaper?
(b) The social network service?
(c) The stockbroker?
(d) Wikipedia?
3. How does vertical cooperation between online video and music streaming pro-
viders and Internet service providers take place?
 
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Answers
1. Value generation model
(a) Value shop
(b) Value network (insurance company)
(c) Value shop
 
Chapter 8 · Value Creation Models and Competitive Strategy

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(d) Value chain
(e) Value chain (producing iPhones)
(f) Value network (mediating between app designers and app users)
(g) Value network
2. Revenues
(a) Usually both the readers and the advertisers. In many cases, the major 
(and sometimes all) revenue comes from advertisers.
(b) Users of the social service do not pay for the usage of the service. The 
revenue comes from other sources, mainly advertisers.
(c) Both buyers and sellers of stocks pay a fee to the stockbroker.
(d) Neither readers nor authors contribute with revenues.
3. The music streaming provider (e.g., Spotify) may have subscription for broad-
band access with several network providers in different parts of the world to 
offer streaming services to millions of simultaneous users. The streaming service 
provider may also rent storage facilities in the network to provide low latency 
services and reduce the traffic load on the network. This may become one of the 
applications of edge computing in mobile 5G network (for more information, 
see Wikipedia article on edge computing).