business model


  • The following examples provide an overview for various business model types that have been in discussion since the invention of term business model: Bricks and clicks business
    model Business model by which a company integrates both offline (bricks) and online (clicks) presences.

  • In further extensions to the design logic, George and Bock (2012) use case studies and the IBM survey data on business models in large companies, to describe how CEOs and
    entrepreneurs create narratives or stories in a coherent manner to move the business from one opportunity to another.

  • They suggest business model design to refer to the process of crafting a business model when none is in place and business model reconfiguration for the process of changing
    an existing business model, also highlighting that the two processes are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model.

  • • Industrialization of services business model Business model used in strategic management and services marketing that treats service provision as an industrial process, subject
    to industrial optimization procedures • Business Model Canvas Developed by A. Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, the business model canvas[2][59] is one of the most used frameworks for describing
    the elements of business models.

  • It is one of the latest collaborative business models which can help in faster development cycles and is adopted by many Technology companies especially software.

  • Related concepts The process of business model design is part of business strategy.

  • Massa and Tucci (2014)[39] highlighted the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high
    technology entrepreneurship, and changing an existing business model, such as when the tooling company Hilti shifted from selling its tools to a leasing model.

  • The process of business model construction and modification is also called business model innovation and forms a part of business strategy.

  • [1] In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business,
    including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, profit structures, sourcing, trading practices, and operational processes and policies including culture.

  • [46] Design content emphasis[edit] Business model design includes the modeling and description of a company’s: • value propositions • target customer segments • distribution
    channels • customer relationships • value configurations • core capabilities • commercial network • partner network • cost structure • revenue model A business model design template can facilitate the process of designing and describing a
    company’s business model.

  • In a paper published in 2017,[47] Johnson demonstrated how matrix methods may usefully be deployed to characterise the architecture of resources, costs, and revenues that
    a business uses to create and deliver value to customers which defines its business model.

  • In the healthcare space, and in particular in companies that leverage the power of Artificial Intelligence, the design of business models is particularly challenging as there
    are a multitude of value creation mechanisms and a multitude of possible stakeholders.

  • [58] • Business reference model Business reference model is a reference model, concentrating on the architectural aspects of the core business of an enterprise, service organization
    or government agency.

  • A sourcing business model is a type of business model that is applied to business relationships where more than one party needs to work with another party to be successful.

  • Alex Moazed, founder and CEO of Applico, defines a platform as a business model that creates value by facilitating exchanges between two or more interdependent groups, usually
    consumers and producers, of a given value.

  • He suggested that the service industry such as the airline, traffic, transportation, hotel, restaurant, information and communications technology and online gaming industries
    will be able to benefit in adopting business models that take into account the characteristics of Web 2.0.

  • Business model innovation When an organisation creates a new business model, the process is called business model innovation.

  • [66] Although business model innovation promises financial returns,[67] periods of radical business model innovation can reduce the person-organization fit and thus lead to
    a greater fluctuation in the workforce.

  • Business model design and innovation refer to the way a firm (or a network of firms) defines its business logic at the strategic level.

  • Therefore, more recent literature on business models concentrate on describing a business model as a whole, instead of only the most visible aspects.

  • [4] Business models are used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore
    possibilities for future development.

  • As a consequence of the new context, several business model elements are promoted to answer those challenges, pivoting the business model towards new models.

  • For example, entrepreneurs on the internet have also created new models that depend entirely on existing or emergent technology.

  • “[42] Strategic outcome[edit] Mayo and Brown (1999) considered the business model as “the design of key interdependent systems that create and sustain a competitive business.

  • (2010) similarly found that in deciding on business partners, it is important to make sure that both parties’ business models are complementary.

  • [68] Business Model Adaptation As a specific instance of Business Model Dynamics, a research strand derived from the evolving changes in business models, BMA identifies an
    update of the current business model to changes derived from the context.

  • Researchers codified their research into a sourcing business model known as Vested Outsourcing, a hybrid sourcing business model in which buyers and suppliers in an outsourcing
    or business relationship focus on shared values and goals to create an arrangement that is highly collaborative and mutually beneficial to each.

  • [62][63] There is a range of reviews on the topic,[61][64][65] The concept facilitates the analysis and planning of transformations from one business model to another.

  • In addition, the rise of outsourcing and globalization has meant that business models must also account for strategic sourcing, complex supply chains and moves to collaborative,
    relational contracting structures.

  • Systematisation of this technique (Johnson settles on a business genomic code of seven matrix elements of a business model) would support a taxonomical approach to empirical
    studies of business models in the same way that Linnaeus’ taxonomy revolutionised biology.

  • It is part of the business development and business strategy process and involves design methods.

  • (2012) developed a decision support system (DSS) for business model design.

  • [45] Design themes emphasis[edit] Environment-strategy-structure-operations business model development Developing a framework for business model development with an emphasis
    on design themes, Lim (2010) proposed the environment-strategy-structure-operations (ESSO) business model development which takes into consideration the alignment of the organization’s strategy with the organization’s structure, operations,
    and the environmental factors in achieving competitive advantage in varying combination of cost, quality, time, flexibility, innovation and affective.

  • [5] Business models are also referred to in some instances within the context of accounting for purposes of public reporting.

  • [20] found that some business models, as defined by them, indeed performed better than others in a dataset consisting of the largest U.S. firms, in the period 1998 through
    2002, while they did not prove whether the existence of a business model mattered.

  • Economic consideration[edit] Al-Debei and Avison (2010) consider value finance as one of the main dimensions of business modelling which depicts information related to costing,
    pricing methods, and revenue structure.

  • [21] The concept of a business model has been incorporated into certain accounting standards.

  • The standard terminology and examples of business models do not apply to most nonprofit organizations, since their sources of income are generally not the same as the beneficiaries.

  • [48] Examples In the early history of business models it was very typical to define business model types such as bricks-and-mortar or e-broker.

  • Since innovating firms do not have executive control over their surrounding network, business model innovation tends to require soft power tactics with the goal of aligning
    heterogeneous interests.

  • Collective business models Business system, organization or association typically composed of relatively large numbers of businesses, tradespersons or professionals in the
    same or related fields of endeavor, which pools resources, shares information or provides other benefits for their members.

  • Instead of going through traditional distribution channels, which had some type of intermediate (such as a distributor, wholesaler, broker, or agent), companies may now deal
    with every customer directly, for example via the Internet.

  • Today, the type of business models might depend on how technology is used.

  • Arguing that traditional advertising is no longer appealing to people used to “user-generated content and social networking”, she states that companies now turn to strategies
    of customization and personalization in targeted advertising.

  • In their study a decision support system (DSS) is developed to help SaaS in this process, based on a design approach consisting of a design process that is guided by various
    design methods.

  • He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect.

  • Chen (2009) stated that the business model has to take into account the capabilities of Web 2.0, such as collective intelligence, network effects, user-generated content,
    and the possibility of self-improving systems.

  • [38] Design Business model design generally refers to the activity of designing a company’s business model.

  • However, these types usually describe only one aspect of the business (most often the revenue model).

  • Other examples of business models are: • Auction business model • All-in-one business model • Chemical leasing • Low-cost carrier business model • Loyalty business models
    • Monopolistic business model • Multi-level marketing business model • Network effects business model • Online auction business model • Online content business model • Premium business model • Professional open-source model • Pyramid scheme
    business model • Razor and blades model • Servitization of products business model • Subscription business model • Network Orchestrators Companies • Virtual business model Frameworks Technology centric communities have defined “frameworks”
    for business modeling.

  • Sourcing business models are targeted for procurement professionals who seek a modern approach to achieve the best fit between buyers and suppliers.

  • Design themes refer to the system’s dominant value creation drivers and design content examines in greater detail the activities to be performed, the linking and sequencing
    of the activities and who will perform the activities.

  • [3] Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily
    successful growth firms.

  • [8] For example, they found that it was important to identify the value drivers of potential partners by analyzing their business models, and that it is beneficial to find
    partner firms that understand key aspects of one’s own firm’s business model.

  • Stewart and Zhao (2000) defined the business model as “a statement of how a firm will make money and sustain its profit stream over time.

  • Finally, a third common business model is monetization of data and metadata generated from the use of platforms.


Works Cited

[‘1. Geissdoerfer, Martin; Savaget, Paulo; Evans, Steve (2017). “The Cambridge Business Model Innovation Process”. Procedia Manufacturing. 8: 262–269. doi:10.1016/j.promfg.2017.02.033. ISSN 2351-9789.
2. ^ Jump up to:a b Business Model Generation,
Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010
3. ^ Jump up to:a b George, G and Bock AJ. 2011. The business model in practice and its implications for entrepreneurship research. Entrepreneurship
Theory and Practice, 35(1): 83-111
4. ^ Jump up to:a b George, G and Bock AJ. 2012. Models of opportunity: How entrepreneurs design firms to achieve the unexpected. Cambridge University Press, ISBN 978-0-521-17084-0
5. ^ Baden-Fuller, Charles;
Mary S. Morgan (2010). “Business Models as Models” (PDF). Long Range Planning. 43 (2/3): 156–171. doi:10.1016/j.lrp.2010.02.005.
6. ^ Unpacking Sourcing Business Models: 21st Century Solutions for Sourcing Services, The University of Tennessee,
7. ^ Berglund, Henrik; Sandström, C (2013). “Business model innovation from an open systems perspective: structural challenges and managerial solutions”. International Journal of Product Development. 8 (3/4): 274–2845. doi:10.1504/IJPD.2013.055011.
S2CID 293423.
8. ^ Karl M. Popp & Ralf Meyer (2010). Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Norderstedt, Germany: BOD. ISBN 978-3-8391-6983-4.
9. ^ Hummel, E., G. Slowinski, S. Matthews,
and E. Gilmont. 2010. Business models for collaborative research. Research Technology Management 53 (6) 51-54.
10. ^ Vitasek, Kate. Vested Outsourcing: Five Rules that will Transform Outsourcing” (New York: Palgrave Macmillan, 2012) ISBN 978-1-137-29719-8
11. ^
Pedersen, Kristian Bonde; Svarre, Kristoffer Rose; Slepniov, Dmitrij; Lindgren, Peter. “Global Business Model – a step into a liquid business model” (PDF).
12. ^ Henning, Dietmar (2012-02-11). “IBM launches new form of day-wage labour”. World Socialist
Web Site. International Committee of the Fourth International (ICFI). Retrieved 2015-02-24. The “liquid” model now being pursued is not limited to IBM. […] It is no accident that IBM is looking to Germany as the country to pilot this model. Since
the Hartz welfare and labour “reforms” of the former Social Democratic Party-Green government (1998-2005), Germany is at the forefront in developing forms of precarious employment. […] The IBM model globalises the so-called employment contract,
increasingly replacing agency working as the preferred form of low-wage labour. Companies assign key tasks to subcontractors, paying only for each project.
13. ^ Choudary, Sangeet Paul (2013). “Why Business Models fail: Pipes vs. Platforms”. Wired.
14. ^
“What is a Platform” by Alex Moazed on May 1, 2016
15. ^ “What Twitter knows that Blackberry didn’t”, Choudary, Van Alstyne, Parker, MarketWatch
16. ^ Choudary, Sangeet Paul (January 31, 2013). “Three elements of a successful platform”. Harvard
Business Review.
17. ^ Chen, T. F. 2009. Building a platform of Business Model 2.0 to creating real business value with Web 2.0 for web information services industry. International Journal of Electronic Business Management 7 (3) 168-180.
18. ^
Dijck, José van. (2013). The culture of connectivity : a critical history of social media. Oxford: Oxford University Press. ISBN 978-0-19-997079-7. OCLC 839305263.
19. ^ Clemons, Eric K. (2009). “Business Models for Monetizing Internet Applications
and Web Sites: Experience, Theory, and Predictions”. Journal of Management Information Systems. 26 (2): 15–41. doi:10.2753/MIS0742-1222260202. ISSN 0742-1222. S2CID 33373266.
20. ^ “Do Some Business Models Perform Better than Others?”, Malone et
al., May 2006.
21. ^ Garbuio, Massimo; Lin, Nidthida (2018). “Artificial Intelligence as a Growth Engine for Health Care Startups: Emerging Business Models”. California Management Review. 61 (2): 59–83. doi:10.1177/0008125618811931. S2CID 158219917.
22. ^
International Financial Reporting Standard 9: Financial Instruments. International Accounting Standards Board. October 2010. p. A312.
23. ^ “The beginning of the end for IAS 39 – Issue of IFRS 9 regarding Classification and Measurement of Financial
Assets”. Deloitte & Touche. November 2009. Archived from the original on 2014-02-23. Retrieved 2011-06-03.
24. ^ “Business Models Matter (for Accounting, That Is)”. Archived from the original on 2012-03-20. Retrieved 2011-06-03.
25. ^
“An optimist sees the opportunity in every difficulty: is IFRS 9 an opportunity or a difficulty?”. Ernst & Young. December 2010. Archived from the original on 2012-04-05. Retrieved 2011-06-03.
26. ^ “FASB Exposure Draft: Recognition and Measurement
of Financial Assets and Financial Liabilities”. Financial Accounting Standards Board. April 12, 2013. p. 174. Archived from the original on 2016-03-04. Retrieved 2013-06-11.
27. ^ International Accounting Standard 12: Income Taxes. International
Accounting Standards Board. December 31, 2010. p. A508.
28. ^ “IASB issues amendments to IAS 12” (PDF). Deloitte & Touche. January 2010. Archived from the original (PDF) on 2011-09-09. Retrieved 2011-06-03.
29. ^ “Amendments to IAS 12:Income Taxes”
(PDF). Ernst & Young. December 2010. Archived from the original (PDF) on 2011-10-20. Retrieved 2011-06-03.
30. ^ “Exposure Draft:Leases” (PDF). International Accounting Standards Board. August 2010. p. 31. Archived from the original (PDF) on 2011-09-05.
Retrieved 2011-06-03.
31. ^ “Exposure Draft: Leases”. Financial Accounting Standards Board. August 17, 2010. p. 29. Archived from the original on 2011-04-08. Retrieved 2011-06-03.
32. ^ “Project Update: Leases—Joint Project of the FASB and the
IASB”. Financial Accounting Standards Board. August 1, 2012. Archived from the original on 2011-01-05. Retrieved 2012-08-02.
33. ^ “Exposure Draft: Leases” (PDF). International Accounting Standards Board. May 2013. p. 30. Archived from the original
(PDF) on 2013-11-26. Retrieved 2013-06-11.
34. ^ “FASB Exposure Draft: Leases”. Financial Accounting Standards Board. May 16, 2013. p. 82. Archived from the original on June 27, 2013. Retrieved 2013-06-11.
35. ^ IFRS 16 Leases: Basis for Conclusions.
International Accounting Standards Board. January 2016. p. 39.
36. ^ “Application of business model to insurance contracts” (PDF). HUB global insurance group. Archived from the original (PDF) on 2011-07-23. Retrieved 2011-06-03.
37. ^ “FASB Education
Session – Insurance Contracts:PricewaterhouseCoopers Summary of the Meeting” (PDF). PricewaterhouseCoopers. February 9, 2010. Retrieved 2011-06-03.
38. ^ “EFRAG calls for candidates for an Advisory Panel on the proactive project on the Role of the
Business Model in Financial Reporting”. European Financial Reporting Advisory Group. December 15, 2010. Archived from the original on June 24, 2011. Retrieved 2011-06-03.
39. ^ Massa, L., & Tucci, C. L. 2014. Business model innovation. In M. Dodgson,
D. M. Gann & N. Phillips (Eds.), The Oxford handbook of innovation management: 420–441. Oxford, UK: Oxford University Press.
40. ^ Lee, G. K. and R. E. Cole. 2003. Internet Marketing, Business Models and Public Policy. Journal of Public Policy and
Marketing 19 (Fall) 287-296.
41. ^ Osterwalder, A., Pigneur, Y. and C. L. Tucci. 2005. Clarifying Business Models: Origins, Present, and Future of the Concept. Communications of the Association for Information Systems 16 1-40.
42. ^ Slywotzky,
A. J. (1996). Value Migration: How to Think Several Moves Ahead of the Competition. Boston, MA: Harvard Business Review Press.
43. ^ Mayo, M. C. and G.S. Brown. 1999. Building a Competitive Business Model. Ivey Business Journal63 (3) 18-23.
44. ^
“How to Design a Winning Business Model”. Harvard Business Review. Retrieved 2016-11-23.
45. ^ Zott, C. and R. Amit. 2009. Business Model Design: An Activity System Perspective. Long Range Planning 43 216-226
46. ^ Lim, M. 2010. Environment-Strategy-Structure-Operations
(ESSO) Business Model. Knowledge Management Module at Bangor University, Wales.
47. ^ Johnson P. (December 2017). “Business Models:
Formal Description and Economic Optimization”. Managerial and Decision Economics. 38–8 (8): 1105–1115. doi:10.1002/mde.2849 – via JSTOR.
48. ^ Daas, D., Hurkmans, T., Overbeek, S. and Bouwman, H. 2012. Developing a decision support system for business
model design. Electronic Markets – The International Journal on Networked Business, published Online 29. Dec. 2012.
49. ^ Diaz Ruiz, Carlos (2023-10-30). “Disinformation on digital media platforms: A market-shaping approach”. New Media & Society.
doi:10.1177/14614448231207644. ISSN 1461-4448. “Figure 3. The triple-product business model of digital media markets.”
50. ^ Borgh, Michel; Cloodt, Myriam; Romme, A. Georges L. (2012). “Value creation by knowledge-based ecosystems: Evidence from
a field study”. R&D Management. 42 (2): 150–169. doi:10.1111/j.1467-9310.2011.00673.x. S2CID 154771621.
51. ^ Michael A. Belch George E. Belch Advertising and Promotion: An Integrated Marketing Communications Perspective, 7/e., McGraw-Hill/Irwin,
52. ^ Keith, Bonnie; et al. (2016). Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement (1st ed.). New York: Palgrave Macmillan. ISBN 978-1137552181.
53. ^ JLM de la Iglesia,
JEL Gayo, “Doing business by selling free services”. Web 2.0: The Business Model, 2008. Springer
54. ^ Gergen, Chris; Gregg Vanourek (December 3, 2008). “The ‘pay as you can’ cafe”. The Washington Times. Retrieved 2009-03-10.
55. ^ Tyrangiel,
Josh (October 1, 2007). “Radiohead Says: Pay What You Want”. Time. Archived from the original on October 4, 2007. Retrieved 2009-03-10.
56. ^ “Pay What You Can”. Alley Theatre. Retrieved 2009-03-10.
57. ^ Slywotzky, A. J. (1996). Value Migration:
How to Think Several Moves Ahead of the Competition. Boston, MA: Harvard Business School Press.
58. ^ Ferri Fernando, D’Andrea Alessia, Grifoni Patrizia (2012). IBF: An Integrated Business Framework for Virtual Communities in Journal of electronic
commerce in organizations; IGI Global, Hershey (Stati Uniti d’America)
59. ^ ‘The Business Model Ontology – A Proposition In A Design Science Approach Archived 2011-05-11 at the Wayback Machine
60. ^ William Foster, Peter Kim, Barbara Christiansen.
Ten Nonprofit Funding Models, Stanford Social Innovation Review. 2009-03-05.
61. ^ Jump up to:a b Geissdoerfer, Martin; Vladimirova, Doroteya; Evans, Steve (2018). “Sustainable business model innovation: A review”. Journal of Cleaner Production.
198: 401–416. doi:10.1016/j.jclepro.2018.06.240. ISSN 0959-6526.
62. ^ Osterwalder, A., Pigneur, Y., Tucci, C.L. (2005). “Clarifying business models: Origins, present, and future of the concept”. Communications of the Association for Information
Systems. 16: 1–25. doi:10.17705/1CAIS.01601 – via Association for Information Systems.
63. ^ Chesbrough, Henry (2010). “Business Model Innovation: Opportunities and Barriers”. Long Range Planning. 43 (2–3): 354–363. doi:10.1016/j.lrp.2009.07.010.
ISSN 0024-6301.
64. ^ Foss, Nicolai J.; Saebi, Tina (2017). “Fifteen Years of Research on Business Model Innovation” (PDF). Journal of Management. 43 (1): 200–227. doi:10.1177/0149206316675927. ISSN 0149-2063. S2CID 56381168.
65. ^ Jump up to:a
b Schallmo, D. (2013). Geschäftsmodell-Innovation: Grundlagen, bestehende Ansätze, methodisches Vorgehen und B2B-Geschäftsmodelle. Wiesbaden: Springer.
66. ^ Mitchell, Donald W.; Bruckner Coles, Carol (2004). “Business model innovation breakthrough
moves”. Journal of Business Strategy. 25 (1): 16–26. doi:10.1108/02756660410515976. ISSN 0275-6668.
67. ^ Latifi, Mohammad-Ali; Nikou, Shahrokh; Bouwman, Harry (2021-09-01). “Business model innovation and firm performance: Exploring causal mechanisms
in SMEs”. Technovation. 107: 102274. doi:10.1016/j.technovation.2021.102274. ISSN 0166-4972.
68. ^ Menter, Matthias; Göcke, Lutz; Zeeb, Christopher (2022-12-26). “The Organizational Impact of Business Model Innovation: Assessing the Person-Organization
Fit”. Journal of Management Studies: joms.12902. doi:10.1111/joms.12902. ISSN 0022-2380. S2CID 254662139.
69. ^ Penarroya-Farell, Montserrat; Miralles, Francesc (2022). “Business Model Adaptation to the COVID-19 Crisis: Strategic Response of the
Spanish Cultural and Creative Firms”. Journal of Open Innovation: Technology, Market, and Complexity. 1 (1): 39. doi:10.3390/joitmc8010039. hdl:10419/274343.
Photo credit:’]