The second methodology is by the author Adam Bock and Gerard George, from the Imperial College School, in a book called The Business Model Book. These two authors write about successful business models and they say that they work because they contain elements that are aligned in order to support the creation of value process. This methodology is very important because they really have a platform, and the authors developed a very interesting platform. Business models are designed to describe, in a very simple context, what the value of the company is. Modern business models hold the topic of value as a pillar, specially the topic of design, so these are two important elements, design and value. Business models are related to how companies work, specifically in organizations in terms of structures and relationships that regulate behaviours and activities and that is how we should look at the business model: structures that regulate behaviours and activities. The authors say, what makes a business model great, successful? Well, then, a great business model meets a couple of things: it satisfies customers’ needs it creates value for the company and obviously for the partners, but it also benefits and has those capacities or resources which are valuable in an efficient way, and which makes the company have a differentiating value against other companies making it sustainable in the long term The three perspectives of a business model are: the first one is that business models are coherent when the narrative, the way you say it, connects the resources resources, transactions and value. When the narrative connects the transactions, the resources, and the value. Let’s talk about resources, resources are everything that companies use to create value. A vision based on resources of an organization is a powerful perspective to understand how and why some companies are strong competitors. The resources of an organization are in fact the raw material of a business model, the resources that you must consider in your business model are the following: they must be businesses that obviously include assets, knowledge, and capacities. There are three steps to understand and assess the structure of resources of a business model, the first one is knowing how to make inventory of the necessary resources available, and which you will need to create your business model. In second place, resources must be assessed to know how they will create value and finally we must consider whether this resource can be taken advantage of, the resource to develop a new business model. It is important to make an inventory of your resources know what you will need, it is strength, it is very important. There are several types of resources in the business model, and which, as I was really saying, and again I’m telling you, these are the assets, but knowledge is also very important. Now, how can we know which resources are needed? How can I know? According to some scholars of the subject, the resources that help you to design excellent business models should be identified as: 1) specialized resources, 2) hard to copy, 3) strange, and 4) precious or appreciated. As specialized resources we understand patents, intellectual property, commercial secrets, or a special human talent for a specific sector those are specialized resources. In terms of what we mean as difficult or hard to copy, we are referring to resources that are hard to imitate such as commercial secrets, for instance the Coca Cola formula which generates a resource value in the long term, and that is hard to imitate no one can imitate this formula as well as Coca Cola does. When we talk about precious resources, such as precious or appreciated minerals, these are resources whose characteristics or specialization are highly valued and hard to substitute. Now, let’s talk about transactions, we have already talked about resources, let’s now talk about transactions as a fundamental element of your business model. The second element in order to design your business model is to clearly identify the transactions What do we understand by transactions? Transactions are the connectors that link or combine, and exchange resources with the creation of value process. Sometimes these transactions are obvious, sometimes they are quite subtle, or are even hidden. According to Bock transactions can be internal, external, and I call them cross connections What does this mean? All those operations or transactions which take place outside, inside, or combined inside the company. When we talk about internal transactions it is everything you need to do inside the company which is essential to make them work. It is important that when you talk about transactions you don’t delay or get lost in thousands of transactions but on the most important ones, those processes which are the most important that determine your business on the inside. External transactions, on the contrary, are maybe the least important and I would define them as such transactions which are part of the company business but which do not affect its operation so much. In his book, Bock gives an easy simple, the Spotify topic. Spotify depends largely on the songs of the authors but they do not really get involved with the authors Spotify, then, is really an element, it is an external transaction as it depends on the songs of the authors but Spotify does not really interfere with the operation, their business model does not depend on talking or not to the author. In cross transactions, as Adam Bock calls them, he defines them as Boundaries Expanding Transactions, which is very complicated, I call them cross transactions easier as these are the essential transactions that connect the organization with the customers, partners, competitors, and any other organization or person from outside the company. The important thing here is to know what the company produces and everything that is generated externally, and how those transactions cross, whether you need strategic allies, whether you need suppliers, what do you need to make those cross transactions? and the important thing is knowing where the value is captured. Finally, to conclude with this second methodology the third key element in the design of a business model is the topic of value. We have talked about resources, transactions and we are now going to talk about value. A business model only works if value is created and captured, that is the truth, creating and capturing value. It is vital to connect the concept of value to the resource and the transactions to ensure the survival and prosperity of the company. In order to talk about value we must not understand it as the value proposition of the organization or company where a product or service is specified and given weight, I believe we must understand value as something deeper in fact it is, it is deeper than that, the value must be aligned to the internal values of the person or individual who identifies with the products or services, that is, not only do you have to express in the value what you think the value for the company is, but that the people who are going to buy it perceive it too, and additionally that the members of the organization understand what value means to you. In order to design the value in a business model, we must take into account three big dimensions which we have seen in past classes of innovation and entrepreneurship, and I will simply state it here. You have to create value, which basically is innovation you have to capture value, which is how you make money and how you communicate value, which is how you transmit that value both to the market and to the company. To understand this more clearly I suggest you to jump freely and develop all the exercises that are in Adam Bock’s platform, on his website www.thebusinessmodelbook.com, I am sure it will be of great use to develop your business model. We have come to the end of this topic and to be honest, I want you to take with you a couple of methodologies, let’s talk about a third methodology, I will do it on the next block or in the next space, as I would like for you to take this message about the importance of using different business models and different methodologies to develop your business model, we have talked about Osterwalder’s, Steve Blank’s and Eric Ries’ methodology, which is the Business Model Canvas, today I introduced you to a new methodology than that of Adam J. Bock and Gerard George about the development of business models which has four important components: resources, transactions, values, and precisely the topic about the development in the net and as a conclusion I would like to introduce you to a third methodology which I will put forth in the next block. Thank you very much.
