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3. Design actors of the value chain: In this third stage, for each of the value production activities defined in the previous stage, the most appropriate actor, possessing the required resources and capabilities is selected, based on the “Resource-Based Theory” (Barney et al.,

  • 2001)

    and the framework of Talluri (Talluri et al., 1999).

  • 4.

    Analysis of competition:

In this stage, for each of the layers of the production -architecture designed in the second stage, an analysis of the competitive positioning of the potential players is performed (figure 3), based on Porter’s “Five Forces Framework” (Porter, 1996); from this analysis players with extremely high level of power might be identified, which could possibly necessitate the redesign of the value production architecture by returning to stage 2. We remark that in our methodology the widest value proposition is designed in stage 1, based on the capabilities offered by ICT and then the competition is analysed not only for the final value proposition (service/product) but also for all layers of the value production chain.

New entrants


Rivalry among


power of

competing firms

power of



Potential development of substitute products

Figure 3: Porter’s five forces

5. Design economic model: In this stage, the economic model is designed, taking into account the “Price Corridor Model” (Chan Kim et al, 2000) and the different pricing models. In order to find the right price for the new product/service /application, it is necessary to identify the price corridor of the mass; the price bandwidth that captures the largest groups of customers. Additionally, the definition of the pricing model(s) for the specific service is of great importance; e.g Flat-rate, commission-based, advertising-based, mark-up based, production-based, subscription-based, fee-for- service based models (Lumpkin et al., 2004) or direct selling, leasing, time-share, equity payment (Kim, 2000) etc. 6. Design relations among actors: Finally, the relations among the value chain actors are designed by using the e3 - value methodology and its extensions (Gordjin, 2002). This model provides a more detailed approach for the contractual obligations, the value objects exchanged among actors, the control mechanisms and the possible violations. to


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