Paper 3 business model design

Question 1

We hypothesize that the design of an entrepreneurial firm’s business model,
which is centered specifically on the themes of novelty and/or efficiency, is
associated with the firm’s performance.
This association can be broken down into two effects:

Answer 1

 One relies on the total value creation potential of the business model
design,
 and the other considers the impact of business model design on the firm’s
ability to appropriate the value that its business model creates

Question 2

How can business models create value?

Answer 2

Business models can create value either by enhancing the customers’
willingness to pay or by decreasing suppliers’ and partners’ opportunity costs—
for example, through improved transaction efficiency.

Question 3

What is the essence of an efficiency-centered business model?

Answer 3

The essence of an efficiency-centered business model is the reduction of transaction costs.

Question 4

What is the essence of a novelty-centered business model?

Answer 4

The essence of novelty-centered business model design is the conceptualization and adoption of new ways of conducting economic exchanges, which can be achieved, for example, by connecting previously
unconnected parties, by linking transaction participants in new ways, or by designing new transaction mechanisms.

*refers to new ways of conducting
economic exchanges among various participants.

Question 5

Efficiency-Centered Business Model Design and Performance.

Answer 5

imitate rather than innovate. To do things similar to established organizations but in a more
efficient way

Question 6

lock-in

Answer 6

attempt to retain stakeholders