Casting off the chains

PLEASE NOTE
The EBF site is dead. If you click through you will be taken to the Internet Archive site to find an archived copy.

“The world has changed. From 1960 to 1999 manufacturing companies’ share of GNP in the US, as well as its workforce, fell from 30 per cent to 15 per cent. Strategic models of the world, however, have not changed. When managers develop strategies for their companies, they still use the tools and language of the manufacturing organisation – most commonly the concept of the Value Chain.

The question managers now need to ask themselves is where these strategic prescriptions come from – and whether they still are valid. Does the Value Chain accurately portray value creation in the new firms of the S&P500, and should managers of these firms follow the standard Value Chain ideas?

In this article, we offer two additional models of value creation – the Value Shop and the Value Network. We will show how they make description of the value creation process easier and can offer insights into what drives the true new economy, an economy where value is created by knowledge and where networks have been opened to competition.”

Editor’s Note: this is perhaps my favorite article of the past several months…I highly recommend it.

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