Business Model Structure – Download this article in PDF format Architects have in the past focused on the building as a static object. I believe that dynamics are more important: the dynamics of people, their interaction with space and environmental conditions. John C. Portman Jr. (1924–2017) Award-winning architect and real estate developer.
In this article, we consider business models as systems of complex transactional activities organized to create, deliver, and capture value. Unlike some other perspectives, we emphasize both system components and their interdependence. Entrepreneurial activity is carried out by a network of actors who rely on a network of resources, and individual firms seek to adjust these intersecting networks to enhance their competitive position. The business model literature points to the importance of prior activities in providing context—the capabilities the firm decides to pursue, the strategy adopted, and the capabilities needed. Drawing on this literature, we propose an approach to framing the business model context. Based on information systems literature, we define a set of tools that facilitate system architecture design. We suggest how this reveals the underlying complexity of the business model and shows how a multiplicity of views makes sense.
Business Model Structure
Chesbrough (2010) suggests that a great idea launched in conjunction with a poor business model will be less successful than an average idea launched in conjunction with a great business model. Indeed, it has been observed that an innovative approach to doing business can be a source of competitive advantage (e.g., Teece, 2010), resulting in an increased focus on business model innovation (Foss & Saebi, 2017). Thus, the questions of where to start, how to innovate, and what to innovate drive an ongoing research agenda. Sustainable enterprises rely on other forms of income and support and can appear as a complex system of activities with a unique architecture (e.g., Amit & Zott, 2015; Zott & Amit, 2010), whose development requires rationalization. multiple perspectives to be effective. What is a value proposition/deal and why does it make sense? Where and when are mutually beneficial transactions made? How and by whom is value delivered? How does a firm’s business model relate to its strategy and available capabilities (e.g., DaSilva & Trkman, 2014; Teece, 2010)?
Why Use The Business Model Canvas
An enterprise business model does not exist in isolation; it is connected to the wider business ecosystem and new insights emerge from the parallel innovation ecosystem (e.g. Dougherty & Dunne, 2011). Thinking about contextual and conceptual frameworks is an important practice in finding new ways to meet customer needs (e.g. Souto, 2015).
Designing a business model, adapting the current business model, mapping existing and future situations (e.g. Osterwalder et al., 2014) based on the practice established as a template in the literature (e.g. Gassmann et al., 2014). However, as Osterwalder and Pigneur (2013) point out, “the main problem that many organizations face today is the lack of a process that allows them to choose completely new and viable business model alternatives.”
? We integrate observations from three streams of literature on HR system architecture design practice: some with a business model orientation, some with an enterprise architecture orientation, and some with a design thinking orientation. We then develop a toolkit that can be used to support business model architecture design and discuss its usefulness and consistency with observations from the existing literature. We begin by looking at context issues, approaches to rendering complex objects, and the design life cycle.
There are many articles in the business model, enterprise architecture, and system design literature streams. Here, for brevity, we generally limit our references to review articles and current perspectives, as they also include previous studies.
What Is The Business Model Canvas?
While there is general agreement that business models define a firm’s mechanisms for creating, capturing, and delivering value, there are differing definitions. One is that “a business model is the design of organizational structures to realize commercial opportunities” (George and Bock, 2011); Another states that “when any enterprise is established, it uses a particular business model, explicitly or implicitly, that describes the design or architecture of the mechanisms for creating, delivering and capturing value that it uses” (Teece, 2010). Mitchell and Coles (2003) expressed the practitioner’s view that a “business model” includes the combined elements of who, what, when, why, where, how, and how much. . “involved in providing products and services to customers and end users”.
Massa, Tucci, and Afuah (2017) critically appraised previous business model research and identified three perspectives on what constitutes a business model: 1) cognitive/linguistic schemas and understandings that describe what a business does; 2) formal representations/descriptions of the general components of the business model; and 3) as a focus on the unique characteristics of real firms that provide competitive advantage and superior performance. They discuss why there may be multiple perspectives and the relationship between business models and strategy, arguing that traditional theories of value creation and capture are biased towards the supply side. The concept of customer and provider value co-creation is a hot topic that is actively discussed (e.g. Grönroos & Voima, 2013). Spieth and co-authors (2014) made similar observations in the context of business model innovation: first, business clarification in support of strategy development; secondly, to represent existing businesses using models and drive efficiency, and thirdly, to develop businesses by exploring new opportunities and sources of sustainable competitive advantage.
DaSilva and Trkman (2013) argue that business models represent specific combinations of resources (resource-based theory of the firm) that create value for both customers and the firm through transactions (transaction cost economic theory of the firm). They see a business model as an operational configuration of dynamic capabilities needed to implement an enterprise’s strategy. Wirtz and co-authors (2016) evaluated research areas, business model definitions, and components in more than 600 articles to propose a definition of the concept and describe the components of an integrated framework from strategic, customer, and market and value perspectives. creation components. Unlike many business model proponents, they incorporate financing and capital models into revenue and cost factors in creating and capturing financial value.
As Allee (2000) points out, while the traditional view of value creation considers the supply chain and its supporting infrastructure, in the knowledge economy this is replaced by thinking about value networks. Reflecting this perspective, Aversa et al (2015) defined the modular components of a business model in terms of the interaction of value creation, capture and delivery structures. Although traditional supply chains may focus on the flow of physical artifacts, intangible artifacts (such as software) and intellectual capital can be important trade assets. Malone et al. (2006) adopted the business model as the unit of analysis in their review of the relative financial performance of thousands of US businesses, as this provided more consistent results than mapping using business sector filters. They describe specific business models in terms of the combination of assets traded (financial, tangible, intangible or intellectual; our adaptation) and the trading process (transferring ownership of assets created or acquired, providing access to assets as an owner or broker). ) (see Table 1), which represents the strategic choices made by the firm. As noted, some firms have organized different operating units with different business models, and we note that some firms have combined them to offer a unique value proposition (e.g. offering a leasing/maintenance package jet engine manufacturers). In practice, although a firm may choose a particular type of model in Table 1, a set of appropriate decisions will be made about specific market segments that leverage the firm’s dynamic capabilities and make business sense: transactional, resource, and formation of value structures. (e.g. George and Bock, 2011). These structures can be developed in terms of common lower-level building blocks, for example, using Osterwalder and Pigneur’s (2009) business model canvas. We will discuss this level of analysis in more detail later.
How To Fill In A Business Model Canvas — Isaac Jeffries
Foss and Saebi (2017) reviewed 150 articles on business model innovation and proposed four research gaps. The first one is related to the construction: defining the nature of innovation, which is structured as a unit of analysis and intersection of the scope of changes (business model architecture level or module level change) and the level of innovation (new to the firm or new to the company). industry). The second is related to coherence: identifying prior activities such as strategy development and the nature of innovation outcomes. The third is related to contingent and regulatory variables, including organizational capacity and leadership, the role of learning and experimentation, and cognition and flexibility. The fourth is related to boundary conditions: other perspectives (entrepreneurship, sustainability, service) and the connection from the firm to the outside world.
Table 1. What kind of business do we do? Sixteen major business model types (adapted from Malone et al., 2006)
What we get from the above is shown in Figure 1, which first shows that a suitable business model design is influenced by five elements of context. We observe that these elements bridge with the firm’s wider business ecosystems
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