Creating Profit Through Alliances - business models for collaboration E-book | Page 9

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Competitive strategy reviewed
focus more on making a profit, non-profit
organisations are more likely to look at how to serve
their customers or society better or cheaper, and
dedicate extra resources to that.
A study2 among 168 businesses shows what the most
important factors are in order to be successful in a
market. On the one hand, it is having the right
resources, such as highly skilled people, protected
knowledge, brand awareness or long-term contracts.
On the other, it is having a highly distinctive strategy.
These factors depend on each other: your knowledge
and resources will largely determine your strategy.
It turns out that your strategy is the most important
factor for success in the market, followed by your
resources and to a lesser extent the competition
intensity.

How do you achieve growth, and how do you make a
profit? That really is the question that is answered by
your business model: a description of what you as a
business do, who your target is and how you earn
your money. The term became very popular during
the late nineties, as every Internet start-up required a
business model. This does not exactly define what a
business model is, but it does give some indication.
So if you are asked "what is your business model?",
you could for instance say: I've got a printing
company that produces advertising copy with very
short delivery times.

Your financial results are affected to similar extent by
this success in the market and the power of your
suppliers. After all, if they take car e of a major part of
your product or service, they can also claim part of
your results.
This chapter elaborates on the relationship between
strategy and profits. Key element in this is
differentiation from your competitors. The concept of
the value network is introduced to be able to think of
opportunities that are new to the market. Generic
strategies by Porter and Treacy & Wiersema are
reviewed to see how you can differentiate yourself in
a sustainable way.

The important thing is to think about the added value
of your business. Added value can be converted into
profit, growth, security for your staff or extra benefits
for your customers. Whereas businesses will perhaps
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