GSZ405 STRATEGIC MANAGEMENT
GROUP ASSIGNMENT 4
TOPIC: PREPARATION OF A COMPANY BRIEF FOR JAYCAR’S BUSINESS MODEL
Introduction
This brief will provide an overview of the Business Model concept and its application to Jaycar. Central observations of the resultant analysis are cited, highlighting Jaycar’s leveraging of internal synergies to generate continued success. The presence of a key vulnerability is also identified.
Part A: Overview of the Business Model Concept
Although the Business Model concept is a dominant feature in the contemporary strategy planning landscape, it lacks a universally agreed definition (Teece, 2010, p. 175). Different formulations of the concept emphasise the use of the model to explain the organisational “logic” of a firm (Casadesus-Masanell & Ricart, 2010), generate a narrative of “how enterprises work” (Magretta, 2002), or provide a rationale for the creation and supply of value (Osterwalder, Pigneur, & Clark, 2010).
This brief posits that the intention of a business model is to understand a firm’s competitive advantage through a construct describing the relationship between business components. In doing so, transformational projects and business management innovation can be identified (Demil & Lecocq, 2010), the alignment between the organisation’s strategic position with its activity validated (Porter, 1996), and the fundamental logic of intra-model component relationships can be examined (Casadesus-Masanell & Ricart, 2010).
Further, business models can capture and present key insights into complex business interactions, facilitating the identification of inconsistencies within the current value chain (Teece, 2010, p. 174). This allows for the leveraging of competitive advantage, inspiration for contingency strategies, and application of innovative change within the model itself (Casadesus-Masanell & Ricart, 2010; Demil & Lecocq, 2010; Johnson, Christensen, & Kagermann, 2008).
Part B: The application of the Business Model Concept to Jaycar
Insight into Jaycar’s business model was driven through the completion of a: (i) Business Model Canvas; (ii) Competency Analysis; and (iii) Business Model representation.
The application of the Business Model Canvas (refer Figure 1) identified Jaycar’s Key Resources potency, notably its “click and mortar” approach that combines a significant retail footprint bolstered by an on-line capability. This element is an enabler for the “tech culture” aspect of Jaycar’s value proposition and assists customer’s transit into a deepening value relationship through Jaycar’s Channels and Customer Relationship components.
Figure 1: Jaycar Business Model Canvas
This aspect is also reflected in the distinctive capabilities identified for Jaycar (refer Table 1), where its competencies in retail scale, cultural engagement, and technical expertise generate reinforcing internal synergies underpinned by a distinctive suite of
internal resources. This combination generates a specific value chain that is difficult to replicate by rivals, supporting Jaycar’s continued incumbency in the electronic enthusiast niche.
Table 1: Jaycar Threshold and Distinctive Capabilities
However, this success is subject to a key vulnerability. The development of a Business Model representation (refer Figure 2) reveals the criticality of the continued vitality of the
