Our discussion began with, among other bailouts, the acquisition of Napster by Best Buy. Napster has been failing for quite some time due to the mp3 incompatibility with several major mp3 players and the fact that it losts its most attractive asset, IT WAS FREE. Best Buy’s plan is a differentiation strategy where it will use Napster’s resources to offer specialty service for cell phones. Will this work? We can only wait and see.
We moved on to the different functions of Business Models starting with the value propostion
The value proposition is the value which the firm passes on to the consumer. The target customer has needs, the value proposition is matched with the firms capabilities, which enables value to be transferred to the consumer.
For the last 20 minutes of class we broke into groups and were asked to choose a company and identify the following for that company: Articulate value proposition, identify target market, define structure of value chain, and cost & profit structure.