Week 2 - Business Models, Purpose & Impact Flashcards
What are two major forces driving the evolution of business models?
Globalization and the rise of the digital economy.
Why do both for-profit and non-profit organizations need effective business models?
To remain competitive (for-profits) and sustainable while adding value (non-profits).
Define a business model.
A system through which an organization produces and captures value, contributing to competitive advantage.
Why must business models continuously adapt?
Because of technological development, globalization, market changes, emerging needs, and new technologies.
How do companies compete in the digital era?
They compete at the business model level, not just through products or services.
Give an example of companies that thrive on platform-based business models.
Facebook, Instagram, Spotify.
What does a business model explain in terms of value creation?
How a company creates value for customers and other stakeholders.
According to Lindgardt et al. (2009), what are the two main parts of a business model?
Value Proposition and Operating Model.
What components make up the Value Proposition in a business model?
Target segments, product/service, and revenue model.
What components make up the Operating Model?
Value chain, cost model, and organization.
How do Osterwalder & Pigneur (2010) define a business model?
As a blueprint of value proposition, value creation, and sustainability.
What are the three interrelated components in Trott’s Model (2017)?
Value Creation, Value Configuration, and Value Capture.
What is the purpose of the Business Model Canvas (BMC)?
To design, develop, or improve business models strategically.
Name any four elements of the Business Model Canvas.
Customer Segments, Value Propositions, Channels, Revenue Streams (others include: Customer Relationships, Key Activities, Key Resources, Key Partners, Cost Structure).
What is business model innovation?
Modifying aspects of a business model to create value, compete, and differentiate in the market.
Why is business model innovation more challenging than product or process innovation?
Because it requires rethinking the structure and logic of how a business creates and captures value.
How did Domino’s Pizza innovate its business model?
By integrating digital ordering and pizza tracking technology, building a strong IT infrastructure.
How can business model innovation benefit companies?
By improving performance, sustainability, and offering competitive advantages.
What is the relationship between business models and strategic management?
Business models must align with corporate, business, and functional strategies to adapt to market needs.
What role does digitalization play in business models?
It enables new business models, disrupts markets, and provides access to new customers and opportunities.
Why is research into digital business models important?
To understand how digitalization affects value creation, capture, and business model components.
How do entrepreneurs use business models?
To design new models that create value, especially in emerging markets or competitive industries.
