Offer Models

Offers from competitors are sometimes unexpected.

But it is surprising that competitors publish their recipes on the Internet, even though they represent confidential know-how.

Distributing Models (like the recipe) may turn out to be a new source of revenue, one which may even be highly profitable as the Production of Models is relatively low cost as it only involves duplicating information. The Baker doesn't have to publish his best recipes if he thinks they represent a competitive advantage. 

The Baker decides therefore to offer his recipes online.

  1. What Enterprises distribute Models?

    Products are Goods or Information or Services.
    Information-Products can be of two types:

    • Facts, mainly Operational Information on the Customers, contracts, accounts, Market... in short, any information that is used to Operate in the Enterprise.
    • Models, whether they are for Human-Actors in document form, or IT-Actors in software form.

    To give some examples of Model-Products:

    • Roland Moreno invented the smart card in 1974: for 24 years he benefited from the royalties of his patents that are nothing more than Models
    • Software vendors (Microsoft, Oracle, Sales Forces, SAP) build and distribute software that are only Models
    • A franchiser (like Afflelou or McDonald's) distributes a Model to the franchisees: a brand, an Operating Model, Product and Service Models
    • A pharmaceutical laboratory can Distribute the license to one of the molecules it has discovered to drug manufacturers.
    • A composer can receive royalties on what he/she has created, which is nothing more than a Model "Operated" by musicians or singers.
  2. Why buy a Model from the outside?

    3 reasons have led to the development of the industry of Models:

    • The speed of Transformations leads Enterprises to look for Models outside because they do not have time to build them.
    • The complexity of new Models, which assemble sophisticated Product Offers and which involve external Actors (Customers and partners), make the task of internal Transformers increasingly arduous. The growing share of IT-Actors (Mobiles, PC, smart tools...) requires more and more software: good software is extremely difficult to build.
    • The breakup of activities between different partners promotes the emergence of Enterprises specialized in Models that enable them to cooperate.
  3. What advantages are there to Distributing Models?

    The Operations are simple

    One of the characteristics of Enterprises that build and Distribute Models is that the Transformation activities take up a bigger part than the Operations.
    The Model industry has the advantage that, after investment for Building the Model, the efforts to Produce it are limited to the duplication of the Models, which is only the duplication of Information.
    It is not by chance that Microsoft, Google, Amazon, SAP, Oracle, are so prosperous.
    Imagine an innovative Model, test it out to check its validity, then Distribute this Model: your Customers will manage the Operations, you will receive royalties, or rights of use or licenses without having to do any more than maintain the software...

    Software can be modified

    To benefit from new Goods (e.g., a new car which corresponds to a new Model), we need to change Goods (in this case, the car). On the other hand, to benefit from a new Model, we can content ourselves to replace the old Model with the new one: it is a new version of the same Model. We can perpetuate the customer relationship; customers will prefer to move to the next version of the installed Model rather than replacing the existing Model, so long as its supplier is able to evolve the Model so that it remains competitive.

    In actual fact, upgrades are not always so simple in Software Models: we may have to convert data to adapt it to a new Model, sometimes it is necessary to adapt the interfaces to other established Solutions, we have to train users to the new functionalities...

  4. Is the Model modifiable by the Customer or not?

    So that the Customer who buys a Model can benefit from future versions, he/she must not modify the Model. This is why software vendors do not deliver their Product sources, the other reason being to keep their know-how.

    But there is also another trend developing: freeware, which is not only free of charge, but also provides access to the internal code. We can therefore modify it, assemble it, distribute increments in the same form, in the context of an open community.

Licence Creative Commons
The story of George the Baker is made available under the terms of the
Creative Commons Attribution - NoDerivatives 4.0 International license.
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