Activity system content refers to the selection of activities, i.e., those that are performed. For example, in addition to the typical activities of a retail bank, Bancolombia adopted activities designed to offer microcredit to the more than 60% of Colombians who did not have access to banking services. To perform these new activities, the bank needed to train its top management, hire and train new staff, develop new capabilities, and link the new activity to its existing system (platforms, applications, and channels)12; Activity system structure describes how the activities are linked (e.g., the sequencing between them), and it also captures their importance for the business model, for example, in terms of their core, supporting or peripheral nature. Consider IBM: triggered by a severe financial crisis in the early 1990s, the firm switched its core and peripheral activities, shifting its focus from being a hardware supplier (old core) to becoming a service provider (new core). Building on a body of know-how built over decades, IBM launched a range of new activities in consulting, IT maintenance, and other services: by 2006, more than half of IBM’s $90bn revenues came from these activities, which had barely existed 15 years earlier.13 Activity system governance refers to who performs the activities. Franchising, for example, represents one possible approach to activity system governance. It can be the key to unlocking value, as was the case when Japanese retailing entrepreneur Toshifumi Suzuki realized in the early 1970s that the franchise system developed in the U.S. was an ideal response to the strict government regulations which limited the size and restricting the opening times of Japanese retail outlets. In franchising Seven-Eleven stores in Japan, Suzuki adopted a novel type of activity system governance and managed to create value through professional management and local adaptation.
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