From value chain to value constellation: designing interactive strategy

Normann, Richard and Ramírez, Rafael (1993) From value chain to value constellation: designing interactive strategy. Harvard Business Review, 71 (4). pp. 65-77.

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Abstract

In today's fast-changing competitive environment, strategy is no longer a matter of positioning a fixed set of activities along that old industrial model, the value chain. Successful companies increasingly do not just add value, they reinvent it. The key strategic task is to reconfigure roles and relationships among a constellation of actors - suppliers, partners, customers - in order to mobilize the creation of value by new combinations of players. What is so different about this new logic of value? It breaks down the distinction between products and services and combines them into activity-based "offerings" from which customers can create value for themselves. But as potential offerings grow more complex, so do the relationships necessary to create them. As a result, a company's strategic task becomes the ongoing reconfiguration and integration of its competencies and customers. The authors provide three illustrations of these new rules of strategy. IKEA has blossomed into the world's largest retailer of home furnishings by redefining the relationships and organizational practices of the furniture business. Danish pharmacies and their national association have used the opportunity of health care reform to reconfigure their relationships with customers, doctors, hospitals, drug manufacturers, and with Danish and international health organizations to enlarge their role, competencies, and profits. French public-service concessionaires have mastered the art of conducting a creative dialogue between their customers - local governments in France and around the world - and a perpetually expanding set of infrastructure competencies.

Item Type: Article
Keywords: marketing; Strategy Planning; Value; Industrial management
Subject(s): Strategy; Entrepreneurship & Global business
Centre: Faculty of Strategy, Entrepreneurship and International Business
Date Deposited: 27 Feb 2012 20:59
Last Modified: 23 Oct 2015 14:06
URI: http://eureka.sbs.ox.ac.uk/id/eprint/2229

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