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Lecture 04 Modeling Business Decisions
Dr. Jorge Ramírez Medina
Demo; Power BI Microsoft
Dr. Jorge Ramírez Medina
Team Work• Prototype your strategy1. Disrupt your Business• New bikes ideas and designs• Improve Customers relationships or Brand recognition using
technology2. Digitize the core business• Marketing, Manufacturing, Back Office processes
3. Create Value from Data• How leverage data?, what data?. Specify revenues.
4. Create ecosystem• The value chain
Dr. Jorge Ramírez Medina
Disrupt your Business• Technologies that create an entirely new offering can
lead to the formation of new industries. • Instead of competing to capture a share of the value in
an existing industry, a new technology can allow a firm to create and capture value in an entirely new industry.• According to Philip Evans & Patrick Forth, there are
three competitive tech waves namely: Commercial Internet, Economies of mass and Hyperscaling
Dr. Jorge Ramírez Medina
Digitize the core Business• Business Intelligence is a set of methods, processes,
architectures, applications, and technologies that gather and transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making (to drive business performance).• The 5 Stages of Business Intelligence are; Data, ETL,
Data Warehousing:, Analytic Engine, Presentation Layer (related to BI LifeCycle)
Dr. Jorge Ramírez Medina
Create Value from Data• Knowledge is the necessary condition for decisión
making. Data-Information-Knowledge• 2 Types of information processing; Transactional OLTP
and Analytical OLAP• OLAP is a function/operation that is optimized to answer
queries that are multi-dimensional in nature• A Data Warehouse integrates the information generated
in all areas of business activity (sales, production, finance, marketing, etc.) and allows access to and use of the information.
Dr. Jorge Ramírez Medina
Create Ecosystem• 3 levels of BI; Strategic, Tactic and Operational• Power BI is a free BI tool• Gartner Hype Cycles provide a graphic representation
of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.• Gartner Magic Quadrant putsTechnology Players Within
a Specific Market
Dr. Jorge Ramírez Medina
Align straytegy• Dominant strategy always works better than any other
strategy, this is always the first option of a rational player.• Dominated strategy never works better than any other
strategy. For this reason there is not the option of a rational player.• Nash equilibrium is a solution concept of a non-
cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his own strategy• Companies data-driven were, on average, 5% more
productive and 6% more profitable than their competitors.
Dr. Jorge Ramírez Medina
Align straytegy• Intelligence as a process, Intelligence as a product,
Intelligence as an organization.• Intelligence is information that meets the stated or
understood needs of policy makers, and has been collected, processed, and narrowed to meet those needs.• Elements of Intelligence
1. collection,2. analysis,3. dissemination, and4. covert action
Dr. Jorge Ramírez Medina
Readings control
Dr. Jorge Ramírez Medina
Digital Payment SystemsCredit and Debit Cards• Consumer Benefits
• Delayed payment.• Revolving credit.• Rewards.• Consumer protection.
• Merchant Benefits• Fast payment.• Assurance of payment• Increased consumer spending
Dr. Jorge Ramírez Medina
Digital Payment Systems
PayPalGoogle WalletAmazon PaymentsApple Pay
Dr. Jorge Ramírez Medina
History of Money
Dr. Jorge Ramírez Medina
BitcoinBitcoin protocol, “a new electronic cash system that’s fully peer-to-peer, with no trusted third-party.”
No central party was required to verify the validity of transactions. Instead relied on an open, distributed network of computers and cryptographic algorithms to confirm the validity of transactions.
Dr. Jorge Ramírez Medina
Bitcoin a little historyBefore Bitcoin; e-gold, Beenz, Facebook Credits (virtual currencies)Ecosystem;Litecoin, Peercoin, Terracoin (emerging)Now;$140 million invested in Bitcoin start-ups and an increasingNumber of mainstream companies are starting to accept payments in Bitcoin (Expedia, Dish, Dell)
Dr. Jorge Ramírez Medina
Business models at Bitcoin Ecosystem1. Traditional bank accounts for consumers
Circle, Xapo; focused on digital wallets, which allowed consumers to store and pay
2. Traditional credit card payment processors . BitPay ; enabling merchants to accept payments in Bitcoin.
3. Serving both consumers and merchants.Coinbase; provided both merchant services and digital wallets, (two-sided platforms)
Dr. Jorge Ramírez Medina
Class question
Is Bitcoin the future of digital payments?
Dr. Jorge Ramírez Medina
Class question
International remittances
Dr. Jorge Ramírez Medina
Class questionInternational remittancesPros:1. Huge addressable market while still staying focused on
consumers.2. Larger fees from consumers by focusing on international
remittances than by focusing on domestic peer-to-peer payments or consumer-merchant commercial transactions.
3. Alternatives available today for international remittances (MoneyGram, Western Union) are vastly more expensive and inferior (long delays before the money is available to the recipient).
Dr. Jorge Ramírez Medina
Class questionInternational remittancesCons:1. Kipochi and BitPesa have the first-mover advantage and
they focus entirely on remittances.2. Remittances require features that differ significantly from
the ones offered by “regular” wallets used for paying online merchants. Thus, it is not clear there are many synergies in doing both.
3. The direct network effects of international remittance services are extremely localized and thus do not provide a significant barrier-to-entry
Dr. Jorge Ramírez Medina
Does it meet the requirements?• Prototype your strategy1. Disrupt your Business2. Digitize the core
business3. Create Value from
Data4. Create ecosystem
Dr. Jorge Ramírez Medina
What about strategy?Prices may be• High $ 120• Average $ 100• low $ 50
1000 clients total Maket • 300 only buy at BitCoin Market• 300 only buy at Silver Dollar Market• 400 buy at cheaper or choose whatever of the two markets, if
price is the sameAdaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
Game scenarioPlayers
–BitCoin, Silver DollarActions
–High prices,–Average prices–Low prices
Rules–Simultaneous decision making
Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
Game scenarioReward (Payment)Case of
Bitcoin average price andSilver Dollar high Price
ThenBitcoin sells 300 loyal customers, plus 400 who go for the lowest price (300 + 400) * 100 = $ 70,000.Silver Dollar Sells 300 loyal customers. (300) * 120 = $ 36.000
Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
Matrix
BitCoin
Dollar
High Average LowHigh 60/60 36/70 36/35
Average 70/36 50/50 30/35Low 35/36 35/30 25/25
Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
Dominant strategy1. A strategy that always works better than any other
strategy.2. Because of that, this is always the of a rational
player’s first option.3. A rational opponent plays to select the dominant
strategy.
Tomado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
Dominated strategy 1. A strategy that never works better than any other
strategy.2. For this reason there is the option of a rational player.3. A rational opponent never plays to select the
dominated strategy.
Tomado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
SolvingIdentify dominant
BitCoin
Dollar
High Average LowHigh 60/60 36/70 36/35
Average 70/36 50/50 30/35Low 35/36 35/30 25/25
Adsaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
SolvingIdentify dominant
BitCoin
Dollar
High Average LowHigh 60/60 36/70 36/35
Average 70/36 50/50 30/35Low 35/36 35/30 25/25
Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
Dr. Jorge Ramírez Medina
SolvingIdentify dominated
BitCoin
Dollar
High Average LowHigh 60/60 36/70 36/35
Average 70/36 50/50 30/35Low 35/36 35/30 25/25
Adpatado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
No Dominat Strategy
Dr. Jorge Ramírez Medina
SolvingIdentify dominated
BitCoin
Dollar
High Average LowHigh 60/60 36/70 36/35
Average 70/36 50/50 30/35Low 35/36 35/30 25/25
Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)
No Dominat Strategy
Dr. Jorge Ramírez Medina
The key
Create Value
from Data
Dr. Jorge Ramírez Medina
Class exercise
Dr. Jorge Ramírez Medina
Modeling Business Decisions
Business Process Model and Notation (BPMN) is the global standard for process modeling.
You have to use a BPMN standardized symbols in order to align the meaning of symbols and their attributes.
Dr. Jorge Ramírez Medina
List process steps1. Decide which business process in your organization
you'd like to diagram.2. Then record each step that occurs in that process.3. Make sure to take into account all factors, decisions,
and possible relationships that contribute to the workflow.
Dr. Jorge Ramírez Medina
Class exercise, Lucidchart1. Start with the first event. For example, you might be
representing a process triggered by a customer's actions.
2. In this case, the customer's initiation of the process is the first event.
3. In Lucidchart, you can simply drag a Start Event shape from the toolbox to the canvas.
Dr. Jorge Ramírez Medina
Class exercise, Lucidchart4. Draw lines and add symbols to build out the rest of the
process. To ensure that you're covering every step, consider questions like,• What happens when the customer initiates this
process?• How do the customer's actions affect other parts of
the organization, like the help desk or the sales department?• When do other factors and people enter the flow?
Which options or new paths do they provide?
Dr. Jorge Ramírez Medina
Class exercise, Lucidchart5. BPMN diagrams can become unnecessarily
complicated when they are disorganized. 6. While BPMN has many symbols and options, it's still
possible to create an attractive, easy-to-read chart.7. Generally, the main process is aligned horizontally,
with associated symbols added vertically.8. Keep your formatting preferences consistent, since
unnecessary fonts, explanations, or colors can be confusing.
9. Try to add new elements only if they add to the overall understanding of the business process.
Dr. Jorge Ramírez Medina
Class exercise, Lucidchart
Dr. Jorge Ramírez Medina
Modeling Business Decisions. KPI
Dr. Jorge Ramírez Medina
End of session
Gracias por
su atención
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