A System Perspective on Business Models

In the digital platform economy, individual freelance workers are matched to their temporary employers thorough online systems. Workers interact with platform firms individually, undermining collective action and hence worker power. This is an issue for policy, as these workers do not have the protections afforded to those in traditional industries. The platform economy has also enabled open source, where the software architect creates a boundary around the software code they accept from a distributed group of contributors. The role of the software architect raises interesting questions about power in what can be seen as a form of networked organisation. Open source can be viewed as a narrative of software code and discussions about it that create a boundary around the project. Open source can also be framed as a business model, where value created by contributors is captured by the software architect for the benefit of both contributors and users. Business models can be viewed as a narrative that can both express and create a desired future for the entrepreneur. The potential of open source to inform narrative forms of business model is the research area. Taking a social constructionist perspective, this study used workshop and participant observation techniques to engage with the founders and other stakeholders in three case study organisations. The empirical contribution is that a narrative form of open source business model can have a power-balanced structure through a discursive process of boundary management. The methodological contribution is that annotated portfolio techniques can reveal an entrepreneur’s business model design from ethnographic data. The theoretical contribution is the importance of conceptual integrity to business models as well as to software engineering. The issue of conceptual integrity can be explored further in future research on factors in business model success.

Business models in process industries: Emerging trends and future research

In this paper, we review the literature on the business model concept. We distinguish between the various business model frameworks according to whether they concern generic descriptions of the business or whether they are more specific in their descriptions. The empirical part of the paper is a case study of financial analysts' perceptions of the term business model and how they describe a specific firm's strategy in relation to the business model frameworks. The analysis indicates that the particularities of strategy and competitive strengths mobilised by the analysts in their understanding of the case company can be seen as elements of a business model. It is concluded which business model typologies are most similar to the analysts' understanding and how these incorporate elements of both a narrow and a broad comprehension of the concept.

The concept of sustainable development is considered one of the most important and urgent challenges facing humanity today. Therefore, solutions that promote sustainable business are of particular importance. The purpose of this article was to explore the concept of a business model as a potentially promising way of shaping the contribution of businesses to sustainable development. A systematic literature review method was used to identify, analyze and critically evaluate the first theoretical proposals for the concept of a sustainable business model. Fundamental differences between the proposed conceptualizations were identified, stemming from different understandings of the business model concept on the one hand, and from its embedding in different, partly contradictory approaches, to corporate contributions to sustainable development, on the other. The article adapts the holistic approach of corporate sustainability and the understanding of the business model as a representation of the essence of business including the proposition, creation, delivery and capture of value. As a result, key elements of the emerging new ontology of the sustainable business model have been identified and defined. The proposed concept of a sustainable business model primarily means adopting a different logic of business, and the basis for defining the various elements of the business model is the reconstruction of the concept of value. The sustainability of a business model is thus referred to the extent to which this model maximizes benefits while reducing economic, social, and environmental damage, and creates value not only for the company and its customers but also for various stakeholder groups. The main part of the article is a systematic identification of the opportunities and challenges associated with the new proposal. These are discussed according to the key elements of the sustainable business model, which are: the value proposition, value creation and value capture.

Purpose This study examines the impact of business model (BM) design on the performance of entrepreneurial firms (EF) in emerging markets, specifically Indonesia. It examines the impact of novelty- and efficiency-oriented and dual BM design on EF performance and explores contingency variables that may moderate the link at micro, organizational and industry levels. Design/methodology/approach Employing a quantitative approach, this study analyzes 158 Indonesian EFs with data collected through structured questionnaires and analyzed using multiple regressions. Performance of EFs is measured by return on assets (ROA) which captures both operational efficiency and the impact of innovation within the chosen BM design. Findings Both novelty- and efficiency-oriented BM designs positively impact EFs' performance; however, a simultaneously high emphasis on both leads to diminishing returns, suggesting a strategic trade-off. Managerial experience is the only significant moderator that positively moderates the effect of dual BM designs but weakens the link between novelty- and efficiency-oriented BM designs and performance. Practical implications In emerging markets, EF managers should choose their BM design carefully. Less experienced managers can benefit more from focusing on either novelty or efficiency, whereas experienced managers are better suited to leveraging a dual-oriented BM design. Originality/value This study provides empirical evidence of the interplay between different BM designs and the moderating role of managerial experience on EF performance in emerging markets, offering new insights into the complex link between BM design and performance.

An increasing number of scholars and practitioners are advocating for the exploration of the demand-side consequences of business model (BM) design from the customer’s perceptual perspective. Consistent with this view, this paper discusses how BM design can achieve customer loyalty through the mediating role of customer citizenship behavior. Therefore, this paper puts forward a series of hypotheses regarding relationships among BM design, customer citizenship behavior, and customer loyalty and further tests these hypotheses through hierarchical regression analysis from data collected from Chinese customers. The results show that both efficiency-centered and novelty-centered BM designs are the antecedents of customer citizenship behavior and customer loyalty. The results also show that efficiency-centered and novelty-centered BM designs can directly affect customer loyalty, and indirectly affect customer loyalty through the mediating role of customer citizenship behavior. Our findings contribute to research on the relationship between BM design and customer loyalty, and research on the demand-side consequences of BM design. Our findings also contribute to research on the link between BM design and marketing, and research on BM design for corporate sustainability. Our findings have management implications for practitioners as well.

Traditional national postal operators are trusted in many countries, having enjoyed stable growth, low costs and societal acceptance for the past 100 years. However, the recent decade has created a threat to their traditional letter delivery services due to advancements in information and communication technology. In response, postal operators have slowly begun to diversify into digital services. This article uses the concept of business models, which have been a recent area of interest in management literature, to provide an innovative perspective on the postal operators' businesses in traditional letter delivery and digital services. The business model concept has four components (partnerships, value proposition, finance and network), and is used in this article to map the traditional letter delivery services business and the ongoing digital services business of postal operators. The key findings are that the business model is standardized for the traditional letter business, such as common products and common revenue generations, and has been consistently used by many postal operators for the last 100 years. However, the business model for the digital services business is not standardized, as this business entails different partnerships and different revenue streams, and has not been consistently used by postal operators since the last decade. The implication is that the business model provides a clear understanding of the current progress of postal operators in the digital-services business area. This understanding will help to create a standardized business model that postal operators can use to diversify into digital services.

PurposeThis paper aims to discuss the need to dynamize the existing conceptualization of business model, and proposes a new typology to distinguish different types of business model change.Design/methodology/approachThe paper integrates basic insights of innovation, business process and routine research into the concept of business model. The main focus of the paper is on strategic and terminological issues.FindingsThe paper offers a new, process‐based conceptualization of business model, which recognizes and integrates the role of individual agency. Based on this, it distinguishes and specifies four different types of business model change: business model creation, extension, revision, and termination. Each type of business model change is associated with specific challenges.Practical implicationsThe proposed typology can serve as a basis for developing a management tool to evaluate the impact of specific changes to a firm's business model. Such a tool would be particularly useful in identifying path dependencies and resistance at the process level, and would therefore allow a firm's management to take focused action on this in advance.Originality/valueThe paper makes two main contributions: first, it offers a new, process‐based conceptualization of business models; second, it is the first paper to establish a direct link between business model change and the degree of innovation (such as “incremental” vs “radical”), and which distinguishes and specifies different types of business model change.

Purpose – The aim of this chapter is to investigate how a focal market actor may design or redesign business models for improved value co-creation.Findings – We posit that value is co-created in use as actors integrate resources in practices, which makes practices a fundamental unit of value creation. Greater density of resources, relevant to a specific practice and to the goals or mission of the actor, corresponds to greater value. The role of a provider is to support other actors in their value-creation processes by providing resources that 'fit' into their practices.We identify 12 categories of business model design elements that need to be defined and developed in parallel. We conclude that a focal actor needs to strive for both intra-actor and inter-actor (meso-level) configurational fit of business model elements in order to enable purposeful co-creation in specific practices.Finally, we propose that meso-level configurations develop in a three-phase process of origination, mobilization and stabilization. A focal actor wishing to improve co-creation in a network needs to develop value propositions not only for customers but also for other actor domains. Overall, the performative power of a market actor is dependent on its network position, the relative strength of its business model and the actor's ability to author compelling meanings.Originality – The research contributes to the discussion on value co-creation by identifying three shifts in the unit of analysis: (1) we argue that use-value is co-created as actors integrate resources in practices, rendering practices a fundamental unit of analysis, (2) as practices are outcomes of business models, we identified business model design as a key unit of analysis for the improvement of value co-creation and (3) our view on business models is network-centric and we focus on how to introduce new business model elements in a specific actor network.Practical implications – The realization of the fact that value creation occurs in networks of interdependent actors pinpoints the need for increased transparency both between functional silos and between actors. The business model framework identifies 12 design elements, which can act as a 'checklist' for managers wanting to engage in co-creative business models.

Public-private partnerships (PPPs) provide an alternative model for producing and delivering public services, both the traditional public services and the electronic ones (i.e., the ones delivered through electronic channels, such as the Internet or other fixed or mobile network infrastructures; Aichholzer, 2004; Andersen, 2003; Broadbend & Laughlin, 2003; Jamali, 2004; Lutz & Moukabary, 2004; McHenry & Borisov, 2005; Nijkamp, Van der Burch, & Vidigni, 2002; Spackman, 2002; Wettenhall, 2003). The basic concept of the PPP model is that the public and the private sectors have different resources and strengths, so in many cases, by combining them, public services can be produced and delivered more economically and at higher quality. In this direction, a PPP is a medium to a long-term relationship between public organizations and private-sector companies, involving the utilization of resources, skills, expertise, and finance from both the public and the private sectors, and also the sharing of risks and rewards in order to produce some services, infrastructure, or other desired useful outcomes for the citizens and/or the businesses. Information and communication technologies, and in particular the Internet and WWW (World Wide Web) technologies, have opened a new window of opportunity for a new generation of PPPs for offering new electronic public services in various domains, for example, for developing and operating public information portals (Andersen, 2003), electronic transactions services (Lutz & Moukabary, 2004), electronic payment services (McHenry & Borisov, 2005), value-added services based on public-sector information assets (Aichholzer, 2004), and so forth. However, before such a new service is developed, it is of critical importance to design systematically and rationally its business model, which, according to Magretta (2002), incorporates the underlying economic logic that explains how value is delivered to customers at an appropriate cost and how revenues are generated. Vickers (2000) argues that most of the failures of e-ventures (also referred to as dot-coms) are due to the lack of a sound business model or due to a flawed business model. However, most of the research that has been conducted in the area of e-business models is dealing mainly with the description and abstraction of new emerging e-business models, the development of e-business-models classification schemes, and the clarification of the definition and the components of the business model concept, as described in more detail in the next section. On the contrary, quite limited is the research on e-business-models design methods despite its apparent usefulness and significance; moreover, this limited research is focused on private-sector e-business models. No research has been conducted on the design of PPP business models for offering electronic services. In the next section of this article, the background concerning PPPs and e-business-models research is briefly reviewed. Then a new framework for the design of e-business models is presented, which has been customized for the design of PPP business models for offering electronic services. Next, the above framework is applied for the design of a PPP business model for the electronic provision of cultural-heritage education for the project E-Learning Resource Management Service for the Interoperability Network in the European Cultural Heritage Domain (ERMIONE) of the eTEN Programme of the European Union (Grant Agreement C517357/2005). Finally, the future trends and the conclusions are outlined.

Public-private partnerships (PPPs) provide an alternative model for producing and delivering public services, both the traditional public services and the electronic ones (i.e., the ones delivered through electronic channels, such as the Internet or other fixed or mobile network infrastructures; Aichholzer, 2004; Andersen, 2003; Broadbend & Laughlin, 2003; Jamali, 2004; Lutz & Moukabary, 2004; McHenry & Borisov, 2005; Nijkamp, Van der Burch, & Vidigni, 2002; Spackman, 2002; Wettenhall, 2003). The basic concept of the PPP model is that the public and the private sectors have different resources and strengths, so in many cases, by combining them, public services can be produced and delivered more economically and at higher quality. In this direction, a PPP is a medium to a long-term relationship between public organizations and private-sector companies, involving the utilization of resources, skills, expertise, and finance from both the public and the private sectors, and also the sharing of risks and rewards in order to produce some services, infrastructure, or other desired useful outcomes for the citizens and/or the businesses. Information and communication technologies, and in particular the Internet and WWW (World Wide Web) technologies, have opened a new window of opportunity for a new generation of PPPs for offering new electronic public services in various domains, for example, for developing and operating public information portals (Andersen, 2003), electronic transactions services (Lutz & Moukabary, 2004), electronic payment services (McHenry & Borisov, 2005), value-added services based on public-sector information assets (Aichholzer, 2004), and so forth. However, before such a new service is developed, it is of critical importance to design systematically and rationally its business model, which, according to Magretta (2002), incorporates the underlying economic logic that explains how value is delivered to customers at an appropriate cost and how revenues are generated. Vickers (2000) argues that most of the failures of e-ventures (also referred to as dot-coms) are due to the lack of a sound business model or due to a flawed business model. However, most of the research that has been conducted in the area of e-business models is dealing mainly with the description and abstraction of new emerging e-business models, the development of e-business-models classification schemes, and the clarification of the definition and the components of the business model concept, as described in more detail in the next section. On the contrary, quite limited is the research on e-business-models design methods despite its apparent usefulness and significance; moreover, this limited research is focused on private-sector e-business models. No research has been conducted on the design of PPP business models for offering electronic services. In the next section of this article, the background concerning PPPs and e-business-models research is briefly reviewed. Then a new framework for the design of e-business models is presented, which has been customized for the design of PPP business models for offering electronic services. Next, the above framework is applied for the design of a PPP business model for the electronic provision of cultural-heritage education for the project E-Learning Resource Management Service for the Interoperability Network in the European Cultural Heritage Domain (ERMIONE) of the eTEN Programme of the European Union (Grant Agreement C517357/2005). Finally, the future trends and the conclusions are outlined.

PurposeBusiness models and the business model concept have become a fixture of scholarly and managerial attention. With a focus on how actors create, capture and disseminate value, business model research holds the promise to inform the tourism sector’s search for ways to innovate and change outdated business practices. Yet, the concept has inspired little research tackling the contingencies of the tourism context. The purpose of this paper is to address this gap in this review and research agenda on business models in tourism.Design/methodology/approachIn this paper, the authors review and synthesize contributions from publications in EBSCO, Emerald Insight, ProQuest and Science Direct databases, that make explicit use of the business model concept in tourism (anytime up to September 2016). We conceptualize the identified articles as a coherent body of knowledge on business models in tourism with the objective of identifying common themes that characterize existing contributions.FindingsFrom the review of 28 qualified articles, the authors identify four emergent themes: sector-specific configurations, the role of different value types, design themes for consistency and regulatory contingencies. These themes inform three domains in which the authors present avenues for tourism-specific studies on business models, as well as their management and innovation that the authors position in relation to the general business model literature.Originality/valueThis review details how researchers across disciplines conceptualize the business model. Together with the identified directions for further research, this literature review thus establishes a common conceptual basis and stock of knowledge for the study of business models in tourism research.

Given its essential role in understanding, explaining and structuring digital innovation, we see the increased prevalence of the business model concept as a unit of analysis in IS research. In contemporary, fast-paced markets, business models are volatile in nature and should be continuously innovated to accommodate new customer needs and technology developments. Business model innovation can be considered as an iterative process to guide business models from ideation towards implementation, in which the proper evaluation of business model prototypes is essential. For this evaluation, we need normative guidance, tools and rules to understand the relative performance of a new business model design. In the early design phases, this implies dealing with high levels of uncertainty. A few techniques and methods have been proposed for this purpose, but these lack the formal basis required for systematical application and development of automated evaluation tools. As a novel approach, we have earlier proposed the application of linguistic summarization to support early-phase, soft-quantitative business model evaluation. In this paper, we focus on a structural formalization of this approach as the basis for the development of well-defined user guidelines and automated evaluation tools. In doing so, we bridge the existing gap between qualitative and quantitative business model evaluation. We demonstrate the formalization by means of a running case inspired by a real-world project in the highly dynamic urban mobility domain.

The business model is receiving considerable attention these days as companies achieve great success, or suffer damaging failure, by changing their way of doing business. Most of the literature on this subject has looked to establish the taxonomy, architecture, or constituent elements of business models, with the aim of isolating their key characteristics. However, only a few have dealt with supportive methodologies for business model design. The present study aims to provide a structured methodology for business model design. At the core of the methodology lies a design template with which a current business model can be analyzed or reinvented in a systematic manner. The template consists of a set of predefined building blocks that describes a business model's strategic patterns and/or constituent elements, which building blocks were collected and verified through an investigation into more than one hundred real-world business model cases. In addition to the design template, a framework for new business model design also is provided. With the help of the representational schemes and procedures therein defined, one can design a business model in a more structured way. The framework is illustrated by means of a case study of an apparel company that set out to commercialize its newly designed product-service system concept.

Collaboration in the freight industry has not been widely adopted mainly due to the perceived barriers in competition resulting in a lack of trust among fleet operators. Collaboration in this sector has significant benefits, including the reduction of empty running, operating costs (OPEX) and greenhouse gas emissions (GHG) resulting in greater utilisation of existing logistics assets. A review of the literature to establish the critical aspects of freight collaboration was undertaken, as well as analyses of published case studies and European Union (EU)-funded projects. The critical aspects and barriers identified include: revenue sharing; compliance with competition law; process synchronization; organisational and systems interoperability; different forms of collaboration from a physical and coordination structure perspective; and strategies for collaboration. To facilitate collaboration a freight collaborative business model (FCBM) framework that highlights problematic areas in freight collaboration is proposed to support standardizing collaborative practices in the freight industry. Three published freight industry collaboration business cases were evaluated against the model. The business model framework is intended as a tool to be used to compare different business models and identify the best innovations to help facilitate collaborative practices. The freight collaboration business model was applied to the Freight Share Lab research project in order to demonstrate the concept and investigate whether efficiency can be unlocked through deployment of a dynamic data and asset sharing platform to enable route and load optimization across multiple fleets of freight vehicles, rail freight wagons and containers.