1 Flashcards
Definition Business Model, Demil&Lecocq, 2010
A BM synthesizes a way of creating value in a business. The concept refers to the description of the articulation between different BM components of „building blocks“ to produce a proposition that can generate value for consumers and thus for the organization.
- synthesized way of creating value in business
- description/articulation between different BM components
- produce a proposition that can generate value for consumers/organization
Definition Business Model, Zott et al., 2010
- BM is new unit of analysis distinct from the product/firm/industry/network
- centered on focal firm, but boundaries are wider
- BMs emphasize a system-level, holistic approach to explaining how firms „do business“
- activities of a focal firm and its partners play important role in the various conceptualizations of BMs
- BMs seek to explain both value creation and value capture
- BMs create value by enhancing the customers willingness to pay or by decreasing suppliers/partners opportunity costs
Definition Business Model, Osterwalder & Pigneur, 2003
We perceive BMs as the conceptual implementation (blueprint) of a business strategy that represents the foundation for the implementation of business processes.
The research field business models has evolved from the resource-based view (RBV) and transaction cost economics (TCE)
- conceptual blueprint of business strategy
- foundation for business processes
- shift: resource-based-view to transaction-cost-Economics
Pyramid: firms activity
1 Strategy: how company operates
2 Business Model (components, patterns, design themes)
3 Tactics (day-to-day actions)
Business Model Components
1-4
1 Value proposition (firm’s offer? firm’s principles?
2 Target customer (target customer segment? secondary customer?
3 Value Creation
- Key activities
- key resources/capabilities
- value network (who involved? who does what?
4 Value Capture (how to earn revenue from offering value proposition
Building Blocks of Business Model Canvas
1-9
1 Key Partners
2 Key Activities
3 Key Resources
4 Cost Structure
5 Value Proposition
6 Customer Relationship
7 Channels
8 Customer Segments
9 Revenue Streams
What are BM Design Themes?
1 general
2 assumptions
1
- configurations of transactional and organizational determinants
- orchestrated and connected by a single theme
- not mutually exclusive, rather span of multi-dimensional vector space
- each BM is a unique composition
2 Assumption
- there is no best configuration (terms of performance)
- performance depends on contingencies and social processes
- high performing configurations are limited and not every configuration works with certain external conditions
Why do design themes create value?
- central idea: the higher the degree of configuration the better the org. performance
- degree of configuration = score on the design theme scale
Advantages of high score on the design theme scale
1-6
1 Synergy (elements complement one another)
2 Direction/coordination (every member share clear vision)
3 Imitation (complex, tailored BM designs are difficult to copy)
4 Competence (focus on resources and efforts to be better than rivals)
5 Commitment (focus on design gives firm credibility and momentum)
6 Bureaucratic controls reduced (no rules between competing design directions required)
General Design Themes: SPICED
1 Sponsor-based
2 Premiumization
3 Complementaries
4 Efficiency
5 Digization
Design Theme 1: Sponsor-based
- connect and exchange goods/information
- free of charge
- value capture through third parties access to platform (ads,..)
- primary actives: attract a big group of people
e.g. Facebook, Twitter
Design Theme 2: Premiumization
- high quality offerings, good brand image, trust, long-term relationships
- value proposition beyond rational buying reasons
e.g. Swatch, Bugatti
Design Theme 3: Complementaries
- bundeling activities/Value propositions within a system
- bundles provide more value than elements alone
e.g. IKEA, Tchibo, Shell
Design Theme 4: Efficiency
- achieve greater efficiency through reducing (transaction) costs
e.g. Aldi, McFit
Design Theme 5: Digitization
- digital technology and benefits are key value drivers
e.g. SpiegelOnline, Amazon Book Store
