Prime Movers: Define Your Business or Have Someone Define it Against You [Hardcover]

Rafael Ramírez (Author), Johan Wallin (Author), Rafael Ramirez (Author)

Book Description

ISBN-10: 0471899445 | ISBN-13: 978-0471899440 | Publication Date: June 6, 2000 | Edition: 1

This book deals with the frameworks between customers and suppliers. These frameworks link a customer's own value creating activities to the competencies and resources of the supplying firm(s). Both the short term (financial) and long term (knowledge) benefits to using this approach are discussed.

Editorial Reviews

From the Inside Flap

The simplified notion of businesses making 'products' to sell to 'markets' is no longer adequate to define a competitive business strategy. Customers no longer accept being grouped into anonymous 'markets' or segments, and sold 'average' products or services. Instead they expect to receive more, much more, for what they pay - and to be considered as individuals. So in these changing conditions - what is the business of business? And, more specifically, how can companies define a business strategy that not only puts them at the top of their industry, but also enables them to define or redefine these industries? In this ground-breaking book, Ram?rez and Wallin answer these questions with a startling new framework that, by clearly defining the true function of business, lays out a specific path to competitive advantage - a framework that will show how companies can become the Prime Movers, the dominant players, in their industries. According to the authors' 'value creation framework', the role of a business is to identify, access and package its capabilities into offerings that help customers create value for themselves and their counterparts. A firm must identify what the authors call the 'value-creating logics' of its customers. The firm must also identify the capabilities it owns (or it can access through partnerships) in order to co-create value for and with the customers. The value-creation logics of customers and the capabilities that a firm owns or can access, form the ingredients of a 'recipe' for business strategy. The authors call this recipe the business model. Four distinct business models are explored. Prime Movers are those firms that have developed the most successful business models for their industries - a business model that others must follow if they want to remain in the industry. Using in-depth case studies of companies such as VISA, Xerox, ABB, Nokia, Tetra Pak, and Caterpillar, companies who have defined and redefined their industries, the authors show exactly what it takes for any firm to become a Prime Mover.

From the Back Cover

Prime Movers Define Your Business or Have Someone Define it Against You 'Prime Movers provides the missing piece in the business strategist's armoury. The world already knows how to explore the business rent landscape around an existing business idea. But in this dynamic era tomorrow's business will be different from today's. Here finally is a reframing guide that will allow you a helicopter view of tomorrow's business landscape.' Kees Van Der Heijden, GBN, Author of Scenarios: The Art of Strategic Conversation 'Ram?rez and Wallin offer a groundbreaking theoretical and practical analysis of practices that allow "prime movers" to shape their industry and to drive environmental changes. Prime Movers is a highly innovative book, opening up promising avenues for a better understanding and implementation of practices for the creation of sustainable superior organizational performance. A "must-read" for theorists, researchers, and practitioners who want to think about the create a prosperous future for their organization. Congratulations to the authors - a great book.' Aime Heene, Faculty of Economics and Business Administration, Ghent University '.provides an important intellectual framework aimed at the level of firms operating in business systems, and has much to say to those working on strategy implementation and organizational learning as well as those who think in terms of strategy as "value production" rather than "value co-production".' Wim Overmeer, Duxx Graduate School of Business Leadership, Monterrey '.discards the old concept of value chain, and develops a new relational theory of value creation based around the final customers' interactions with the offering and other activities. The resulting concepts are robust and particularly helpful in understanding the new behaviors and goals of recent Internet companies.'Ian Page, Hewlett Packard Research Labs Business Strategy

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Product Details

• Hardcover: 350 pages
• Publisher: Wiley; 1 edition (June 6, 2000)
• Language: English
• ISBN-10: 0471899445
• ISBN-13: 978-0471899440
• Product Dimensions: 9.2 x 6.1 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,504,677 in Books (See Top 100 in Books)

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4 of 4 people found the following review helpful:

4.0 out of 5 stars PRIME MOVERS, May 16, 2001

By 

John Stanley (Kent United Kingdom) - See all my reviews

This review is from: Prime Movers: Define Your Business or Have Someone Define it Against You (Hardcover)

`PRIME MOVERS' Define Your Business or Have Someone Define it Against You

How did Nokia come to lead in mobile phones? How did Tetra Pak revolutionise milk packaging? How did VISA become so central in payments? How did Caterpillar become `the' reference in Earth-moving equipment? How did photocopying come to be called Xeroxing?

This book tells the story of companies that have revolutionised their markets, some more than once, by completely changing the logic of value creation in them. Such companies are called `prime movers'. The book explains this logic and provides detailed frameworks for implementing it.

The New Logic of Value Creation

The main thesis of the book, and the value creation framework it proposes, is that the role of a business is to identify, utilise and package its capabilities into offerings that help customers create value for themselves and their customers and counterparts.

This framework is fundamentally different from one that considers products (instead of capabilities) and markets (instead of customers). It captures not only the value of an offering to customers, but the whole value chain, including customers' customers. The overall network, in which value is created both with customers and their customers, is called a `value constellation'.

An example shows how this was implemented by Xerox Corporation, which converted xerography into a commercial success. Later, competitors entered the market with smaller and cheaper machines. Xerox reconfigured the market a second time with its `document processing' strategy.

An Architecture for Value Creation

The authors provide a framework for understanding the various value logics in the value chain and resulting value constellation. They show how to define a business model which should answer the question: what value do we want to create, and for and with whom? This comprises the capabilities to be deployed, the co-production partners to be involved, the offerings to be co-produced, and the customers to be targeted.

Different routes can be taken to create value:

* A firm aligns its value-creating logics to those of its customers.

* A company harnesses its existing capabilities to create new offerings for existing and new customers.

* A company develops and utilises new capabilities to create new offerings and attract new customers.

The book rests on the premise that value is customer-dependent. For example, a shirt may be bought by several different types of people. One may view it entirely as a piece of clothing, its value being based on its price relative to its quality. Another may be interested in minimising the time taken to acquire the shirt, and therefore buy it from a mail order catalogue or the internet. A third may be looking for something that will become an integral part of her wardrobe. A fourth could be a fashion student, who buys it to learn about design. Or the purchaser could be an environmentalist, concerned about the origin of the material, the environmental impact of the production process, and whether it can be recycled. Each of these customers has a different view of the value of the shirt, which needs to be taken into account when creating the offering presented to them.

Some Comparisons

`Prime Movers' has a common theme with `Leading the Revolution' by Gary Hamel. However, it differs markedly in presentation and content. Both argue that to succeed, a business has to reinvent itself, often more than once. But whereas Hamel's revolution relates mainly to changing the organisation, Ramírez and Wallin's revolution is in rethinking the business.

It also has much in common with `The Profit Zone' (Slywotsky and Morrison, John Wiley, 1998), in that both books focus on what customers value. However, whereas Slywotsky and Morrison look principally at the customer's point of view, Ramírez and Wallin also consider the firm's capabilities and its customers' customers.

This is not an airport bookshop best-seller, with a single idea and which can be read in a few hours. It is thoroughly researched, with notes and references on each chapter. It is very rich in ideas which demand careful attention, and its layout enables it to be read a chapter at a time. For a summary of these ideas, one can do no better than quote one of the concluding paragraphs. "Offerings reverse the ground of attention to which strategists have given priority. Instead of actors, interactions should be considered as the focus. Instead of companies, it is relationships. Instead of positioning within a given context, it is the enlarging and redefining environments which can deliver more effective companies, helping their customers to become more effective creators, ultimately making up better value constellations."