The interconnection of the Business Model's features, and why has it worked well
Irizar captures value by taking in resources or inputs generated within the company. These inputs include personnel, leadership, innovation, partnership, etc. The economic inputs or results are the value created out of the way the business model is organized. In the diagram below, the features of the business model are interconnected with one another in a network fashion, able to convert them into results. The results or outcomes also give indication of adjustment to business model and then creates new requirement of inputs.
Figure 4: Interconnectivity of Irizar Business Model Features (adapted from 7-S McKinsey Model)
From the diagram above, it can be seen that the features interact with another to make this business model of Irizar to work. Major interactions are briefly discussed below.
- Organizational Structure and Value Chain.
The flat organizational structure allows significant interaction between employees, teams and partners (customers and suppliers). This will enable equality and respect, thus increasing the motivation among the employees. The employees work across the organisation (with suppliers and customers) to create an on-time, high quality product. Making the team performance transparent in the organisation and base the incentives on organisational performance, will steer employees towards a common goal. Furthermore, Sarataxa’s leadership style allows for an environment of creativity and innovativeness.
- Core Competences/Value Proposition/Market Segment
- The shared vision (participation as a strong value) encourages commitment to the common company jargon, dreams and team involvement. This enables an environment of tacit knowledge transfer between the employees allowing competence building and innovation creation. The customer interaction with the Irizar teams allows the company to tap into unique source market knowledge.
- Employees and Partner Network (Suppliers and Customers)
- Irizar has a strategy to keep excellent working relationship with the suppliers and customers, thereby aligning partner interests to achieve a common goal.
- The business model has been working well because of:
- The recognition and allegiance to the vision and shared value of the Corporation, i.e. project based on participation and mutual trust.
- The leadership style of the Saratxaga which has rippled down to other employees
- Recruitment process; the type, training and commitment level of new employees
- The network itself, which has been the source of knowledge management (KM) and innovation which is close to impossible to imitate, and
- Installation of KM tools to convert and transfer knowledge effectively, i.e. tools like information and communication, education and training, working teams and committees, external relations, etc foster knowledge sharing. Unique measurement systems in Irizar are not only focusing on quantitative measures but strategic objectives as well. Forcadell. F.J et al (2002).